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on Post Keynesian Economics |
| By: | Zachary Knauss (Department of Economics, New School For Social Research, USA) |
| Abstract: | The profit-investment puzzle, characterized by the disconnect between rising corporate profits and stagnant capital investment, has become a focal point in recent economic research. This paper argues that the traditional pro-competitive policy framework, which attributes this phenomenon primarily to anti-trust failures, is insufficient for a comprehensive understanding. Instead, it posits that the post-Keynesian tradition, particularly the work of Josef Steindl, provides a more robust theoretical foundation for analyzing the relationship between market concentration and investment behavior. Steindl's insights into oligopoly dynamics and their impact on capacity utilization and investment decisions are applied to recent trends in U.S. industries. The paper includes both theoretical exploration and empirical analysis, employing econometric tests on data from 1972 to 2017. The results support Steindl's hypothesis of a pro-cyclical relationship between deviations in normal and actual capacity utilization rates and industry-wide investment rates, suggesting that increased market concentration leads to persistent underutilization of capacity and stagnation. This comprehensive analysis challenges the prevailing view that simply enhancing anti-trust enforcement can resolve the profit-investment gap, emphasizing instead the need for nuanced policies that address both market structures and broader economic dynamics. |
| Keywords: | Secular stagnation, capacity utilization, market concentration, oligopoly |
| JEL: | D43 E22 L13 L40 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:new:wpaper:2409&r= |
| By: | Thomas Palley |
| Abstract: | This paper examines the military-industrial complex (MIC), which is a prototype widely imitated by other business sectors. Collectively, they constitute a variety of capitalism which can be termed the poly-industrial complex (PIC). Understanding the MIC is critical to understanding contemporary US capitalism, US international policy, and the drift toward Cold War II. The MIC exerts a massive societal impact. It twists economic activity toward military spending; twists the character of technical progress; is socially corrosive via its capture of politics and government; twists societal understanding of geopolitics to increase demand for war services; promotes militarism and increases the likelihood of war; and promotes proto-fascist drift because militarism drips back into national politics. Given those features, the MIC is of first-order significance and the consequences of failure to understand it are likely to be grim. Politics is at the center of possibilities for change. That raises questions whether the demand for change can be mustered, and whether the political system will permit it. |
| Keywords: | Military-industrial complex, war, miltarism, Neoliberalism, Neoconservatism, fascism |
| JEL: | D74 F51 H56 P10 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:pke:wpaper:pkwp2409&r= |
| By: | Mc Kenzie, Mc Kenzie, Rex A. (Kingston University London) |
| Abstract: | In this paper, I present a comparative analysis of my recent work and Gary A. Dymski's contributions to the study of inequality and uneven development. By examining the similarities between our approaches, I emphasise our shared commitment to challenging conventional economic wisdom and exploring the complex dynamics of economic systems through interdisciplinary and institutionalist lenses. My paper, "What is balance-sheet driven and real estate backed?" argues for the importance of studying housing within economics and calls for a more inclusive and diverse approach to economic research. Dymski's paper, "The Dual Separation Processes in Capitalist Accumulation: From Imperialism to Internal Colony to Financialization, " explores the historical roots and contemporary manifestations of the separation between ownership and control, and between money-seeking capital and productive capital. Through this comparative analysis, I identify several notable similarities between our works, including an emphasis on the role of institutions in shaping economic outcomes, engagement with interdisciplinary perspectives, and a critique of neoclassical economics. We both draw upon the works of scholars from various fields and apply concepts such as David Harvey's "accumulation by dispossession" to analyse the dynamics of capitalism and inequality. I argue that our combined contributions open up a rich and potentially powerful research agenda, inviting scholars to examine more deeply the complex dynamics of inequality, uneven development, and the role of institutions in shaping economic systems. This agenda encompasses the need to further investigate the dual separation principles, explore the dynamics of housing and inequality, engage with the experiences and perspectives of the Global South, and develop alternative economic frameworks and methodologies. By building on these insights, we can push the boundaries of economic analysis and work towards a more equitable and sustainable future. |
| Keywords: | Inequality; Uneven Development; Institutional Economics; Interdisciplinary; Capitalism |
| JEL: | B50 O18 P16 |
| Date: | 2024–06–18 |
| URL: | https://d.repec.org/n?u=RePEc:ris:kngedp:2024_001&r= |
| By: | Vinicius Curti Cícero; Daniele Tavani |
| Abstract: | This paper addresses the factors driving economic stagnation and inequality in the US over recent decades. We study a demand-driven model with joint adjustment of the functional distribution and capacity utilization in the short run, and explore the dynamics of wealth accumulation and labor productivity growth in the long run. Our analysis formally explains several stylized facts observed in the US economy: the decline in labor share of income, the increase in the top 1% wealth share, the slowdown in labor productivity growth, and the reduction in the income-capital ratio. Institutional changes that weakened workers’ bargaining power or strengthened firms’ market power have reduced the labor share of income. While these changes may have initially stimulated short-term economic activity and growth within a profit-led demand regime, their long-term effects are concerning. In particular, a lower labor share negatively impacts labor productivity growth and, in turn, slows down the growth rate of the economy in the long run. To achieve balanced growth, the income-capital ratio, proxied by the rate of capacity utilization, must eventually decrease. The long-run behavior of our model is captured by a simple 2D dynamical system analyzing the capitalist wealth share and the labor share. Our findings demonstrate that an institutionally driven decline in the labor share exacerbates wealth inequality over time. These results point to the importance of policies counterbalancing the labor-crushing developments of the past decades to escape the process of stagnation and inequality. |
| Keywords: | Secular stagnation; income shares; wealth inequality; aggregate demand |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:pke:wpaper:pkwp2410&r= |
| By: | Raphael Porcherot (IDHES - Institutions et Dynamiques Historiques de l'Économie et de la Société - UP1 - Université Paris 1 Panthéon-Sorbonne - UP8 - Université Paris 8 Vincennes-Saint-Denis - UPN - Université Paris Nanterre - UEVE - Université d'Évry-Val-d'Essonne - CNRS - Centre National de la Recherche Scientifique - ENS Paris Saclay - Ecole Normale Supérieure Paris-Saclay, CEPN - Centre d'Economie de l'Université Paris Nord - LABEX ICCA - UP13 - Université Paris 13 - Université Sorbonne Nouvelle - Paris 3 - CNRS - Centre National de la Recherche Scientifique - UPCité - Université Paris Cité - Université Sorbonne Paris Nord - CNRS - Centre National de la Recherche Scientifique - Université Sorbonne Paris Nord, Université Sorbonne Paris Nord); Mariano Féliz (IdIHCS - Instituto de Investigaciones en Humanidades y Ciencias Sociales [La Plata] - CONICET - Consejo Nacional de Investigaciones Científicas y Técnicas [Buenos Aires] - FaHCE - Facultad de Humanidades y Ciencias de la Educación [La Plata] - UNLP - Universidad Nacional de la Plata [Argentine], CONICET - Consejo Nacional de Investigaciones Científicas y Técnicas [Buenos Aires], UNLP - Universidad Nacional de la Plata [Argentine]) |
| Abstract: | In Marxist dependency theory, the uneven and combined development of productive forces across core and periphery is a key feature of capitalism. The unity of such sys- tematically differing components of the world economy is defined by the combination of borders and nation-wide productivity and labour remuneration standards. Periph- eral value spaces stand in a relationship of dependency with core value spaces, which provides the economic rational for the political domination of the latter over the former. The foundation of this dependency lies in the interaction between unequal exchange dynamic and the heightened exploitation of labour. Indeed, super-exploiting labour allow peripheral capitals to partially compensate for the value there are losing as a consequence of unequal exchange. For that reason, peripheral value spaces exhibit a fundamentally heteronomous and extroverted mode of development. This interaction takes place through the evolution of exchange rates, whose main functions is to verify the monetary character of the various currencies. Through the latter's perpetual comparison, they reproduce the general equivalent whose existence is a structural necessity for any market-based economy, such is capitalism. Doing so, exchange rates formally mediate value spaces that nonetheless retain systematically diverging characteristics. However, on the one hand, Marxist dependency theory does not offer a unified exchange rate theory. On the other, within Marxist economic literature, while several attempts at expounding a model of exchange rate determination are to be found, they yield differing conclusions and more importantly were not integrated with the debates on dependency. This article proposes to revise differing Marxist understanding of the exchange rate, seeing the latter's determination as key mechanisms leading to the reproduction of dependency. It thus discusses insights from Shaikh, Carchedi, Astarita and Ricci with the dependency tradition originating in Marini's work. On this basis, we suggest that as they contributes to the verification of the socially acknowledged monetary character of the various currencies, exchange rates determine the magnitude of unequal exchange. Consequently, the latter is best seen not as a transfer of value but as a loss of value, in contrast with the traditional "phlogistic" understanding of unequal exchange that can be found in the literature on unequal ex- change, especially in Emmanuel's writings. Finally, the point is to explore how the mediating role of exchange rate necessarily implies the super-exploitation of labour-power. |
| Keywords: | Exchange rate, Dependency, Value transfers, Unequal exchange |
| Date: | 2024–06–03 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04599629&r= |
| By: | Lena Lavinas (UFRJ - Universidade Federal do Rio de Janeiro [Brasil] = Federal University of Rio de Janeiro [Brazil] = Université fédérale de Rio de Janeiro [Brésil]); Lucas Bressan (UFRJ - Universidade Federal do Rio de Janeiro [Brasil] = Federal University of Rio de Janeiro [Brazil] = Université fédérale de Rio de Janeiro [Brésil]); Pedro Rubin (UFRJ - Universidade Federal do Rio de Janeiro [Brasil] = Federal University of Rio de Janeiro [Brazil] = Université fédérale de Rio de Janeiro [Brésil]); Ana Carolina Cordilha (CEPN - Centre d'Economie de l'Université Paris Nord - UP13 - Université Paris 13 - USPC - Université Sorbonne Paris Cité - CNRS - Centre National de la Recherche Scientifique, USN IHEAL - Université Sorbonne Nouvelle - Paris 3 - Institut des Hautes Études de l'Amérique latine - Université Sorbonne Nouvelle - Paris 3) |
| Abstract: | The authors argue that the concept of financialization is central to understanding current transformations in social policies. The chapter maps some of the ways in which these transformations are occurring across key sectors of social provision, such as pensions, education, and health care. The authors show how the advance of this new paradigm of social policy in financialized capitalism is connected to a growing dependence of households on financial markets, especially through mounting levels of debts. They point to the corrosion of social ownership and collective identities that sustained the development of a wide variety of welfare systems in central and peripheral economies, which now engenders an accelerated process of recommodification and re-individualization. Rather than promoting socioeconomic security over the course of individuals' life cycle, social policy now regulates access to financial markets while it is simultaneously regulated and reconfigured by them. The result of the financialization of social policy is therefore the production of families' growing dependence on deregulated financial markets. The discussion carried out throughout the chapter aims to critically examine how this paradigm undermines the fundamental goals of social policy by deepening different forms of inequalities and exclusions among individuals, while feeding financial accumulation. |
| Keywords: | social protection, social policy, financialization, protection sociale, politique sociale, financiarisation |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04579780&r= |
| By: | Julien Vastenaekels (CRIEG - Centre de Recherche Interdisciplinaire Economie Gestion - MSH-URCA - Maison des Sciences Humaines de Champagne-Ardenne - URCA - Université de Reims Champagne-Ardenne, REGARDS - Recherches en Economie Gestion Agroressources Durabilité et Santé - CRIEG - Centre de Recherche Interdisciplinaire Economie Gestion - MSH-URCA - Maison des Sciences Humaines de Champagne-Ardenne - URCA - Université de Reims Champagne-Ardenne, ULB - Université libre de Bruxelles) |
| Abstract: | This article explores the relationship between degrowth and the theory of Capital as Power (CasP), aiming to understand how socio-ecological transformations can unfold against capitalist power dynamics. While degrowth scholars have largely overlooked this perspective on capital, CasP argues that capitalism is primarily a mode of power, with capitalisation quantifying power – the confidence in – the ability to shape society against opposition. Key CasP concepts are brought into dialogue with degrowth research to identify potential implications and offer a step towards a theory of change for degrowth. The article first outlines the CasP perspective, including its notion of power, the process of capitalisation and the conflictual nature of capital accumulation, and highlights links with degrowth research. It then looks at the elements underlying the valuation of capital as power and how they provide entry points for degrowth transformations. The role of dominant capital groups and the concept of "sabotage" in exercising power over society are then addressed. As such, degrowth transformations must challenge the confidence of dominant capital groups in their ability to rule, as these groups inhibit possibilities for socio-ecological change. This dynamic, summarised in a conceptual diagram, provides a first step towards a theory of change for degrowth in the face of capital accumulation. Finally, the conclusion offers potential directions for further research. |
| Keywords: | capitalism, capital as power, accumulation, degrowth, transformations, sabotage |
| Date: | 2024–02–29 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04584989&r= |