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The "Dilution Effect" and Emerging Markets
No full textContrary to the conventional wisdom, rapid growth in real investment is not necessary positive for equities. In emerging markets, the need to finance large-scale capital formation creates a wave of initial public offerings and privatization, which turn “dilute” the relative share of existing equities. Over time, changes in pace of IPOs and privatization tend to alter the effect of liquidity and earnings on equity prices
Military Spending and Differential Accumulation: A New Approach to the Political Economy of Armament – The Case of Israel
No full textThis paper offers a new approach to the political economy of armament, focusing on the relationship between military spending and differential accumulation in mature capitalist economies. Applied to the “model” case of Israel, our analysis suggests that the militarization of Israel’s economy since the late 1960s occurred within a growing dichotomy between large and small firms. The econometric model shows that the “military-bias” of Israeli industry raised the profits of the large corporate conglomerates but constrained and even lowered those of smaller companies
Can Brazil Continue to Outperform India?
Get PDFThe long term prospects for Brazilian and Indian equitie
US-Based Transnational Corporations and Emerging Markets
Get PDFTransnational corporations are accounting for a growing share of global economic activity and their dependence on emerging markets is rapidly rising. For US-based TNCs, the attraction of emerging markets stems from superior economic growth, higher rates of return and, most importantly, from the prospects of expanding market share
The New World Order and its Old-New Instruments: Prospects for Israeli Society
Get PDFThe political economy of "peace dividends" in the Middle East fits well into the global transformation of capital accumulation
The EMA "Phoenix": Soaring on Market Hype
No full textAn asset allocation model based on cycles of investors’ hype
Bringing Capital Accumulation Back In: The Weapondollar-Petrodollar Coalition – Military Contractors, Oil Companies and Middle-East "Energy Conflicts"
No full textThis paper offers an alternative approach to the repeated occurrence of Middle East “energy conflicts.” Our analysis centres around the process of differential capital accumulation, emphasizing the quest to exceed the “normal rate of return” and to expands one's share in the overall flow of profit. With the evolution of modern capitalism, the dictates of differential accumulation become an ever stronger unifying force, drawing both state managers and corporate executives into increasingly inextricable power driven alliances.
The Middle East drama of oil and arms since the 1970s has been greatly affected by this process. On the one hand, rising nationalism and intensified industry competition during the 1950s and 1960s forced the major oil companies toward a greater cooperation with the OPEC countries. The success of this alliance was contingent on the new atmosphere of “scarcity” and oil crisis, which was in turn dependent on the progressive militarization of the Middle East. On the other side of the oil arms equation stood the large U.S. and European based military contractors which, faced with heightened global competition in civilian markets and limited defense contracts at home, increased their reliance on arms exports to oil rich countries.
Over the past quarter century, the progressive politicization of the oil business, together with the growing commercialization of arms transfers helped shape an uneasy Weapondollar Petrodollar Coalition between the principal military contractors and petroleum companies. As their environment became intertwined with the broader political realignment of OPEC and the industrial countries, the differential profits of these companies grew evermore dependent on the precarious interaction between rising oil prices and expanding arms exports emanating from successive Middle East “energy conflicts.” At the same time, these companies were not passive bystanders. This is suggested firstly by the very close correlation existing between their arms deliveries to the Middle East and the region's oil revenues and, secondly, by the fact that every single “energy conflict” since the 1967 Arab Israeli War could have been predicted solely by adverse setbacks to the differential profit performance of the large oil companies
The Great U-Turn. Restructuring in Israel and South Africa
Get PDFIsrael and South Africa often are considered similar. Both are immigrants societies whose states were founded by European minorities through planned colonization. Great Britain considered both as imperial assets for. Both gained their independence after World War II and adopted a pro-American policy. The elites in each society cultivated the self-image of a leading advanced Western state, surrounded by hostile primitive environs. Both Israel and South Africa developed state-subsidized arms industries and engaged in strategic and technological cooperation. Both developed secret nuclear weapons programmes, again in frequent cooperation with one another. Both adopted discriminatory policies against the colonized population and developed a segregated labour market.
Since the late 1980s, the economic structures and foreign relations of both states have been fundamentally transformed. This change was impelled by a significant decline in the profitability of the military-industrial sector in both countries. Both countries declared their intentions to achieve regional detente and to open a new page in their relations with their neighbours. Both began to dismantle their local monopolistic economic structures and to open their economies to the world. The process of liberalization hurt the middle strata of wage-earners; in both countries, these are the very groups that until recently made the hard core of the racist consensus. In both countries, formerly demonized enemies, such as Mandela and Arafat, became desired guests, along with transnational corporations and foreign investors
Breaking Out of Stagflation: Some Regional Comparisons
Get PDFStagflation has been a fact of life in regional economies, although this is now changing as a result of structural reform and deregulation. During the transition, faster growth does not necessarily imply higher inflation, or vice versa
The Long Shot for Brazil
No full textPolitical support for current reforms is contingent on sustained growth, but the prospects for such growth are limited by Brazil’s highly unequal distribution of incom