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Reconsidering Systemic Fear and the Stock Market: A Reply to Baines and Hager
Full text linkThis article responds to Baines and Hager’s recent critique of the capital-as-power model of the stock market. Proposed by Bichler and Nitzan, this model seeks to explain how financial crises are tied to the concept of ‘systemic fear’. Bichler and Nitzan tested their initial model on US data, finding a strong correlation between capitalist power (as they measure it) and systemic fear. However, when Baines and Hager extended the model to four other countries, they found conflicting results. I respond to Baines and Hager, and argue that they were perhaps too quick to dismiss systemic fear as a useful concept. I re-examine systemic fear in twelve countries, and find that (with a few exceptions), it correlates with capitalist power. These results suggest that the notion of ‘systemic fear’ is useful for studying both capitalist crisis and national diversity in capitalist development
A Requiem for Carbon Capitalism?
Full text linkThe fossil fuels business has fallen on hard times. For years the sector has been mired in a slump due to stubbornly low oil and gas prices, concerns over climate change, as well as technological breakthroughs in renewable energy technologies. With the Covid-19 pandemic dealing a further blow to their fortunes, some media pundits claim that fossil fuels companies are entering a phase of terminal decline.
News of the immanent demise of companies responsible for a significant portion of global greenhouse gas emissions might sound like a boon for efforts to avert climate breakdown. But just how bad is the outlook for fossil fuels? In this research note, I offer a preview of findings from a new research project on the financial performance of the fossil fuels sector on a global scale.
My research shows that the share of oil, gas and coal companies in global profit and capitalization has steadily decreased over the past half century, while that of alternative energy companies has jumped since 2018. But despite falling distributive shares, what we also find is that the overall magnitude of oil, gas and coal profit and capitalization currently dwarfs that of the alternative energy companies. All signs indicate that capitalists are still, as Tim Di Muzio observed a decade ago, capitalizing a future unsustainable
No Way Out
No full textFor much of the 20th and early 21st centuries, U.S. unemployment and incarceration went hand in hand. This is how the rulers disciplined their subjects while bolstering the upward distribution of income
How Dominant are Big US Corporations?
No full textI recently had a lively Twitter debate with Jonathan Nitzan, Shimshon Bichler and Cory Doctorow about the future of big corporations in the United States. The debate was prompted by Doctorow’s piece ‘End of the line for Reaganomics’, which I reposted on capitalaspower.com. Doctorow argues that we may be witnessing a sea change in the way governments treat big corporations. Since the Reagan era, the US government has taken most of the teeth out of antitrust enforcement [...] Jonathan Nitzan and Shimshon Bichler then entered the Twitter debate backed by their own research on corporate power. For their part, Nitzan and Bichler are less optimistic that the US government will seriously challenge the power of big corporations [...] Here’s where I enter the debate. I am more optimistic than Bichler and Nitzan that the US government will challenge corporate power. The reason is that the COVID crisis has forced a drastic change in government policy. Let’s have a look
Corporate Power and the Future of U.S. Capitalism
No full textCorporate power in the United States has risen to unprecedented levels, but the rate at which this power has grown is decelerating. Both facts have important implications for the future of U.S. capitalism
Unbridgeable: Why Political Economists Cannot Accept Capital as Power
No full textThe theory of capital as power (CasP) is radically different from conventional political economy.
In the conventional view, mainstream as well as heterodox, capital is seen a ‘real’ economic entity engaged in the production of goods and services, and capitalism is thought of as a mode of production and consumption. Finance in this approach is either a mere reflection/lubricant of the real economy (the mainstream view), or a parasitic fiction (the heterodox perspective).
CasP rejects this framework. Capital, it argues, is not a productive economic entity, but a symbolic representation of organized societal power writ large, and capitalism should be analysed not as a mode of production and consumption, but as a mode of power. In this approach, finance is neither a reflection nor a fiction, but the symbolic language that organizes and creorders – or creates the order of – capitalized power.
These are foundational claims. They go to the very heart of political economy, and they have far-reaching implications. So far-reaching, in fact, that if we accept them, we must rewrite, often from scratch, much of the theory, history and possible futures of the capitalist order.
Many have complained about CasP being aloof. Our approach, they have argued, insists on being ‘right’ – to the exclusion of all others. It shows no interest in ‘building bridges’. It dismisses neoclassical liberalism altogether, and although sometimes sympathetic to Marx, it aims not to revise Marxism, but to discard it altogether.
In this research note – excerpted and revised from our 2020 invited-then-rejected interview with Revue de la regulation – we explain the basis for these complaints and why CasP and conventional political economy cannot be easily bridged. Stated briefly, the problem is not unwillingness but built-in barriers. As it stands, political economy cannot accept capital as power. Its very foundations prevent it from doing so
'Protein' Industry Convergence and its Implications for Resilient and Equitable Food Systems
Full text linkRecent years have seen the convergence of industries that focus on higher protein foods, such as meat processing firms expanding into plant-based substitutes and/or cellular meat production, and fisheries firms expanding into aquaculture. A driving force behind these changes is dominant firms seeking to increase their power relative to close competitors, including by extending beyond boundaries that pose constraints to growth. The broad banner of “protein” offers a promising space to achieve this goal, despite its nutritionally reductionist focus on a single macronutrient. Protein firm strategies to increase their dominance are likely to further diminish equity in food systems by exacerbating power asymmetries. In addition, the resilience of food systems has the potential to be weakened as these strategies tend to reduce organizational diversity, as well as the genetic diversity of livestock and crops. To better understand these changes, we visually characterize firms that are most dominant in higher protein food industries globally and their recent strategic moves. We discuss the likelihood for these trends to further jeopardize food system resilience and equity, and we make recommendations for avoiding these impacts
Dominant Capital and the Government
No full textThis note contextualizes the ongoing U.S. policy shift toward greater ‘regulation’ of large corporations. Cory Doctorow and Blair Fix are optimistic about this shift. We doubt it
Cinema
No full textUnlike books, cinema directs and controls our attention and leaves less to the imagination. But that’s why we love it: it grabs us. And even if it isn’t always as deep as books, it can still teach us plenty. Here is a list of movies and series we liked, along with their directors/creators and the year/s in which they first screened
Relative Oil Prices and Differential Oil Profits
No full textIf you thought that oil profits are about producing oil, think again. The enclosed chart, updated from our 2015 Real-World Economics Review paper, ‘Still About Oil?’, shows that the main determinant of oil profit — and specifically of differential oil profit — is not output, but prices