La grande divergenza
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Interessante ma criticabile, cfr. Robert Brenner, Christopher Isett (2002), "England's Divergence from China's Yangzi Delta: Property Relations, Microeconomics, and Patterns of Development", The Journal of Asian Studies, 61(2), pp. 609–662.
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The Resurgence of East Asia
Introduction and final chapter by Arrighi, Selden and others lead in readability and analytical depth. Chapters by Pomeranz, Sugihara and Hamashita are enjoyable and interesting. The rest consists either in empty post-colonial, rhetoric-ridden "anti-eurocentrism" or in second-hand institutionalist p
Introduction and final chapter by Arrighi, Selden and others lead in readability and analytical depth. Chapters by Pomeranz, Sugihara and Hamashita are enjoyable and interesting. The rest consists either in empty post-colonial, rhetoric-ridden "anti-eurocentrism" or in second-hand institutionalist political science.
The message is: East Asia's current ascent has to be conceived as a multi-layered story, merging together different path dependences. The region developed a highly commercialized, small-property based, labour-friendly, benign market system, whose peculiarities still persists. This pattern is vividly contrasted with an alleged monopolistic-prone and intrinsically militaristic western capitalism. The "neo-smithian" perspective is clearly stated in every contribute. I disagree with -say- the two thirds of the book, but to me it still represents a valuable point of view, containing good insights about social structures, choice of techniques in pre-modern china and so on.
The Economics of Global Turbulence
Robert Brenner, What is Good for Goldman Sachs is Good for America: The Origins of the Present Crisis, Center for Social Theory and Comparative History, UCLA, Los Angeles, April 2009.
The Crisis of Neoliberalism
Gérard Duménil, Dominique Lévy, The Crisis of the Early 21st Century: A Critical Review of Alternative Interpretations, 2011, Paris-Journdan Sciences Économiques : Paris.
Gérard Duménil, Dominique Lévy, The Crisis of the
Gérard Duménil, Dominique Lévy, The Crisis of the Early 21st Century: General Interpretation, Recent Developments, and Perspectives, 2011, EconomiX, PSE : Paris.
In this book marxist french economists Gérard Duménil and Dominique Lévy offer their own interpretation of the current economic crisis. The book can be easily seen as a sequel of their 2004 book Capital Resurgent, which contained a general reconstruction of the trajectory of american capitalism in the XX century analysed through their capital efficiency-based methodology².
The authors recognize that the crisis theory based on the increasing cost of capital determining a fall in the rate of profit, which they used to explain the great depression of the XIX century and the crisis of the seventies, is not suitable for the present crisis. The authors' alternative explanation is based on the idea that both the '29 and the current ones are "crises of financial hegemony", as the diagram illustrates;
The idea of a crisis of "financial hegemony" is not in any way new, especially in the marxist tradition, but in this book both terms have a peculiar meaning. "Hegemony" is really intended as dominance of finance capital over industrial capital, and therefore used to explain inter-capitalist class relations. That's a very different use from that of authors like Giovanni Arrighi, in which hegemony is about international relations and the costs and benefits of world governance. Furthermore, finance is considered essentially a class phenomenon, with the result that its rise is interpreted as an intentional, utterly political move implemented by minority which had enough of the keynesian compromise of the postwar period. Competing literature opposes this view arguing that so called financialisation has to be understood either as an unintended consequence or as a functional requirement³. The authors seem unconscious of those methodological problems, and I think that's a great weakness of their position. The outcome is that their "crisis of financial hegemony" bears no clear economic logic, nor the political/hegemonic side is well conceptualized. The reference to the concept of "fictitious capital" is important but occasional, with the result that it remains almost untheorised⁴. Their reconstruction of the rise of finance in western economies underlines the unproductive nature of finance, in open polemic with the conventional wisdom that developed credit markets, liberalized capital flows and financial innovation boost real investment. In the author's view -instead- the endurance of such an effect in an open economy paves the way for a decrease of industrial competitiveness, which eventually dries up profitable outlets for domestic producers, who lose shares to more competitive industrial countries. This happened in the U.S. with reference to asian producers, and the phenomenon -which reached its apex in the 2000s- explained also the decreasing effectiveness of monetary policy -rejecting en passant the "blame it on the FED" mantra vociferously played by the free-market cheerleaders.
On the other side, much attention is given to wage inequality and an appropriate "tripolar" framework is introduced to restore a bit of realism in the analysis of wage earning classes. The key to understand the system-wide, class-driven redistribution of wealth occurred in the last three decades in the US, which an income share-based analysis would conceal, is that the new financial bourgeoisie and the upper echelon of the managerial class reconstituted their earnings not through capital incomes but with strikingly high wages and bonuses, so that the redistribution has taken place inside the wage share, by means of a new managerial strategy aimed at distributing surplus-value via labour compensation instead of dividends⁵. Duménil and Lévy label this particular use of the wage source of income as "surplus labour compensation".
The result of this strategy is a misalignement of income classes and social classes which gave to the neoliberal order the rosy face of a classless, "skill-based" meritocratic arena which gurus and human capital theorists popularized so enthusiastically in the Nineties. However, this phenomenon emerged in the Eighties, at a time when high interest rates were already boosting capital incomes after decades of financial repression. The restoration of capitalist power has been therefore carried out in a complementary fashion both through capital incomes and upper management compensations and bonuses. The latter, Duménil and Lévi argue, have been nonetheless particularly important in ensuring the complicity of the top branch of the managerial class, whose cooptation within the neoliberal project represented the social precondition of its political viability.
However, whether the significance of this strategy for the macroeconomy has been that of a cosmetic change unable to fix aggregate demand problems due to a decade-long real wage stagnation for the large majority of production workers or -as the authors maintain- that of a prolonged pattern of credit-led consumption, ultimately overconsumption, exacerbated by an unproductive class of financial capitalists, all this is open to debate. Duménil and Lévy explicitly reject the first option as they already did in previous publications with respect to the crisis of 1929. In the authors opinion, insufficent aggregate demand may well be a consequence of the crisis' ensuing depression, but it cannot cause the crisis in the first place⁶. The distributionist, Kaleckian/Keynesian view embraced among others by the Regulation and SSA marxist schools is therefore criticized once again. However, the admirable coherence of the authors' framework doesn't allow so rapid a liquidation of the issue. "Consumption" is a broad label which embraces different sources of aggregate demand. Distributionist theories focus on the differential contribution to growth of those sources of demand to explain disequilibria which may lead to overinvestment -in this case of a financial character- and crisis⁷. In this view, the "excessive" nature of consumption relative to productive investment generated by the credit expansion is itself a consequence of a deep inbalance between profit and wages, the prevention of which would have made current consumption sustainable because of its realization via real incomes and not through unearned income -a path which would have in turn resulted in stronger expectations and real investment growth. A more in-depth empirical analysis is needed to understand if an alternative path of income distribution would have resulted in a more sustainable growth path.
The book contains a clear step-by-step analysis of the financial unravelling from the first crackles of the housing bubble to the collapse of Lehman Brothers and the subsequent bail out. This part and the one investigating the slowdown of accumulation are scholarly pieces of applied economics which deserve careful reading.
The authors conclude with some brief remarks on the future of capitalism. Neoliberalism may well be at a standstill, but no significant change should be expected to materialize as a manna from heaven just because of the crisis. In fact, as Duménil and Lévy write, the neoliberals -the underlying ideological canons if not the actual people- are still well in charge, leading the "recovery". Nonetheless, the authors do allow that structural social change has to take place sooner or later to adjust institutions and power structures to economic necessities -the adjustment of relations of production to the requirements of the productive forces as Marx would have it. In the authors' view, the necessity of change will eventually result in a revival of managerialism, whose biased tendency towards the capitalist "cousins" who hooked them away from a more galbraithesque stance in the 80s will have to be confronted by organized political action if the popular classes want to fight back and restore a minimum of dignity and voice in the making of their lives in the contemporary world.
¹ A rather sympathetic review is given by Thomas Michl (2011), "Finance as a Class?", New Left Review, II/70, July-Aug, pp. 117-125.
² The most complete presentation of Duménil and Lévy's growth model, which is based upon an empirical observation of profit rate fluctuations and firm behaviour in relation to inventories and capital accumulation in the U.S. economy, can be found in Gérard Duménil, Dominique Lévy (1993), The Economics of the Profit Rate: Competition, Crises and Historical Tendencies in Capitalism, Cheltenham-Northampton, Edward Elgar.
³ For a recent interpretation of financialisation as unintended consequence see Greta R. Krippner (2011), Capitalizing on Crisis: the Political Origins of the Rise of Finance, Cambridge-London, Harvard University Press.
⁴ However, further theorizing about the question of fictitious capital, which almost inevitably leads to issues of productive labour and value theory, is given in Gérard Duménil, Dominique Lévy (2011), "Unproductive labor as profit rate maximizing labor", Rethinking Marxism, Vol. 23(2), pp. 216-225.
⁵ This part draws on Gérard Duménil, Dominique Lévy (2004), "Neoliberal Income Trends", New Left Review, II/30, pp. 105-133.
⁶ The authors nonetheless concede that problems of aggregate demand are first order issues in Europe (p. 164).
⁷ This view emerges naturally from sintheses of Marx and Keynes/Kalecki such as the Bhaduri-Marglin model or cyclical profit squeeze theorists. For research on the US economy see for example Özlem Onaran, Englebert Stockhammer, and Lucas Grafl (2011), "Financialization, income distribution and aggregate demand in the usa", Cambridge Journal of Economics, 35, pp. 637-661; David M. Kotz (2008), "Contradictions of Economic Growth in the Neoliberal Era: Accumulation and Crisis in the Contemporary U.S. Economy", Review of Radical Political Economics, 40(2), pp. 174-188; Özgür Orhangazi, Financialization and Capital Accumulation in the Non-Financial Corporate Sector. A Theoretical and Empirical Investigation of the U.S. Economy: 1973-2003, PERI Working Papers, N° 149, October 2007. Formal models are developed in Deepankar Basu, Financialization, Household Credit and Economic Slowdown in the U.S., SOAS Department of Economics, Research on Money and Finance Discussion Papers, N° 30, June 2011; Shinya Fujita and Hiroaki Sasaki, Financialization and its Long-run Macroeconomic Effects in a Kalecki-Minsky Model, Kyoto University Graduate School of Economics, Research Project Center Discussion Paper Series, N° E-11-001, April 2011.
Il primo capitolo del libro in inglese: http://tinyurl.com/66u3hec
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