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Consolidation and Crisis in the US Banking Sector 1980-2022
Full text linkMuch of the economic analysis of banking crises focuses on the interplay between concentration and stability. A common theory is that concentration is associated with greater stability, whereas competition is associated with instability. In this view, there is a trade-off between, on the one hand, the higher prices and higher profits associated with a banking cartel, and on the other, frequent banking crises and lower prices caused by a fragmented sector. However, this theory is not entirely convincing. Principally, it tends to treat competition and concentration as independent variables, whereas in reality, causality works both ways: banks actively work to transform the structure of the system and transcend apparent constraints – whether through coordinating interest rates, influencing policy, or by transforming the business landscape through corporate amalgamation. In addition, the last two major banking crises in the US occurred in dramatically different conditions of concentration from one other, complicating any obvious empirical connection between concentration and stability.
In this paper, I try to move beyond this hypothesis by investigating the relationship between corporate concentration and banking stability through the lens of organized power. Using a combination of quantitative and qualitative analyses, I make two claims. First, since the 1980s, the differential profitability of large banks has been driven by corporate amalgamation. Second, crises tend to be followed by an increase in the pace of amalgamation. As a result, since the 1980s, banking crises have preceded a dramatic redistribution of resources and control to a handful of large banks. While it is not clear that concentration makes a banking crisis less likely, the evidence suggests that crisis makes concentration more likely. Though the research presented here is only tentative and exploratory, it indicates that since the 1980s, large banks have remade the business and regulatory landscape in ways that defy the logic of a simple binary relationship between concentration and stability, and that this needs to be taken into account when analysing the dynamics of banking crises
The Notions of the Valuable: How Symbolic and Economic Value Discuss the Fragile Nature of Ecology in Frank Herbert’s Dune
Full text linkWhat determines value? Value-theory is a complex field of study, but in Frank Herbert’s sci-fi novel ‘Dune,’ there are especially two categories of value that come to light: economic and symbolic value. In the novel, economic and symbolic value are demonstrated by the natural resources of the spice mélange – a strange substance which allows interstellar travel within the fictional Empire but only found the desert planet Arrakis – and water, the building block of life which is almost non-existent on the planet. In this dissertation, these ideas are explored by using real-world theories of value and the different social groups within the novel to determine the value of water and the spice in ‘Dune.
The Political Economic Roots of Hollywood Strikes, 1950-2023
Full text linkThis paper investigates the timing of labour strikes in Hollywood. The occurrence of strikes, such as the WGA and SAG-AFTRA strikes in 2023, can make sense when we have the hindsight to piece together the historical details of what created rifts between labour and management. But was 2023 a particularly fragile year for contract negotiations to break down with two of Hollywood’s creative labour unions? If labour demands were reasonable, why did studios refuse to agree with them? And if Hollywood studios are profitable, what makes management see the demands of labour as something “unreasonable”?
This paper uses multiple sources of empirical data to analyse the historical trends of strikes in Hollywood between 1950 and 2023. Strikes in Hollywood — particularly by the WGA and SAG-AFTRA — have common political economic roots. They tend to occur when the profits of major Hollywood studios are in a type of danger zone: when the differential profits of Hollywood are stagnating or declining. Differential profit is a relative measure of performance. Differential profit can be found in any situation where a firm or set of firms holds a better stream of income than what others hold. For example, differential gains still occur when a firm loses profit at a slower rate than others. In the case of the Hollywood studios, differential profit is measured against the largest firms in other business sectors.
The paper argues that relationships between management and labour in Hollywood are strained by the appearance of these danger zones of differential profit. When the differential profit of Hollywood’s major studios falls, the studios are pressured to increase their profits through aggressive methods such as cost-cutting. Data from 2006 to 2022 demonstrate that acts of cost-cutting hurt creative labour significantly more than studio management. As employment in arts, design, and entertainment occupations stagnated, management occupations increased in size around the 2008 WGA strike, as well as during the years before the 2023 WGA and SAG-AFTRA strikes. Management occupations also had higher wage and salary increases than arts, design, and entertainment occupations.
The paper also argues that alternatives to the aggressive approaches of increasing profits are unlikely to appear in the current business conditions of Hollywood film distribution, even with the growth of streaming media. With few exceptions, Hollywood studios since the 1980s have built a delicate system of risk reduction, which is disrupted by injections of green-field spending and investment. In other words, the major studios currently prefer stagflation over growth, a preference that creates managerial aversions to new employment, significant increases in compensation and other financial benefits in the next collective agreement
A Tour of the Jevons Paradox: How Energy Efficiency Backfires
Full text linkWhen it comes to our sustainability problems, striving for greater resource efficiency seems like an obvious solution. For example, if you buy a new car that’s twice as efficient as your old one, it should cut your gasoline use in half. And if your new computer is four times more efficient than your last one, it should cut your computer’s electric bill fourfold.
In short, boosting efficiency seems like a straightforward way to reduce your use of natural resources. And for you personally, efficiency gains may do exactly that. But collectively, efficiency seems to have the opposite effect As technology gets more efficient, we tend to consume more resources. This backfire effect is known as the ‘Jevons paradox’, and it occurs for a simple reason. At a social level, efficiency is not a tool for conservation; it’s a catalyst for technological sprawl.1
Here’s how it works. As technology gets more efficient, it cheapens the service that it provides. And when services get cheaper, we tend to use more of them. Hence, efficiency ends up catalyzing greater consumption.
Take the evolution of computers as an example. The first computers were room-sized machines that gulped power while doing snail-paced calculations. In contrast, modern computers deliver about a trillion times more computation for the same energy input. Now, in principle, we could have taken this trillion-fold efficiency improvement and reduced our computational energy budget by the same amount. But we didn’t.
Instead, we took these efficiency gains and invested them in technological sprawl. We took more efficient computer chips and put them in everything — phones, TVs, cars, fridges, light bulbs, toasters … not to mention data centers. So rather than spur conservation, more efficient computers catalyzed the consumption of more energy.
In this regard, computers are not alone. As you’ll see, efficiency backfire seems to be the rule rather than the exception. Far from delivering a cure for our sustainability woes, efficiency gains appear to be a root driver of the over-consumption disease
Правда об инфляции (The Truth About Inflation)
Full text linkОт редакции: среди всего набора макроэкономических тем, текущие показатели инфляции — одна из самых популярных и часто обсуждаемых. Аргументы сторонников режима жёсткого инфляционного таргетирования хорошо известны, равно как и возражения противников подобного подхода. Не касаясь их содержания, этой статьёй мы хотим привлечь внимание российской аудитории к самому подходу измерения инфляции. Как следует из представленного текста, определение уровня инфляции на практике сталкивается с теми же проблемами, что несут и прочие “средние”, “общие”, “агрегированные” показатели. Это делает актуальным вопрос о внедрении секторального, адресного подхода в управлении ценовой динамикой — что касается как фискальных мер, так и ДКП.
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Милтона Фридмана нет в живых уже более десяти лет, но его призрак всё ещё преследует нас. В 1960-х годах Фридман заявил, что инфляция "всегда и везде является денежным явлением" — проблемой печатания слишком большого количества денег. С тех пор всякий раз, когда инфляция дает о себе знать, вы можете рассчитывать на то, что кто-нибудь оживит призрак Фридмана и обвинит правительство в том, что оно слишком много тратит.
Если бы только инфляция была такой простой.
Как и многое в экономической теории, мысли Фридмана на первый взгляд кажутся правдоподобными. Инфляция — это общий рост цен. А поскольку цены — это ничто иное, как результат обмена (благ) на деньги, то больше денег в обращении означает, что цены должны расти. Следовательно, инфляция "всегда и везде является денежным явлением".
К сожалению, при дальнейшем рассмотрении эта мысль рассыпается. Проблема в том, что она рассматривает инфляцию как равномерный рост цен. Теоретически это удобно, но эмпирически неверно. В реальном мире темпы инфляции сильно разнятся. В то время, когда цена на яблоки повышается на 5%, цены на автомобили могут вырасти на 50%, а цены на одежду — упасть на 20%.
Чтобы понять реально существующую инфляцию, нужно обратиться не к учебникам по экономике, а к реальным данным. Именно этим занимался политэкономист Джонатан Ницан во время своего докторского исследования в начале 1990-х годов. Его работа вылилась в диссертацию под названием "Инфляция как реструктуризация". В реальном мире, заметил Ницан, изменение цен всегда "дифференцированно", что означает наличие победителей и проигравших. Как следствие, инфляция не является чисто "денежным явлением", вопреки заявлениям Фридмана. Инфляция перестраивает социальный порядок.
Именно эта особенность инфляции в реальном мире является наиболее важной, поскольку она означает, что инфляция сигнализирует об изменении структуры власти в обществе. Предсказуемо, что именно эту особенность реального мира игнорируют мейнстримные экономисты — в основном потому, что она противоречит их стройной теории инфляции как "денежного явления". К счастью, доказательства очевидны. Инфляция является (и всегда была) в подавляющем большинстве случаев дифференциальной. Инфляция — это перестройка [экономики].
Сегодня, когда инфляционные страхи возвращаются и призрак Фридмана воскресает, стоит напомнить себе о реальных фактах
Do High Interest Rates Reduce Inflation? A Test of Monetary Faith
Full text linkWhenever inflation rears its head, the call soon comes to raise interest rates. The rationale is simple. Higher interest rates put a damper on the supply of money. And this monetary clamp slows inflation. It’s so intuitive that it must be true.
Or is it?
As the Reverend Brooke observes, it takes a person of true conviction to ignore apparent contradictions. As such, this post is designed to test your monetary faith. According to monetary orthodoxy, higher interest rates reduce inflation. Yet the evidence demonstrates that the opposite is true: higher interest rates are associated with higher inflation. With this evidence in mind, I invite you to read on. Put your monetary faith to the fire and see if it can survive
How to Make the Oil Industry Go Bust
Full text linkCan the oil industry afford to clean up its mess? If by ‘mess’ we mean fossil-fuel-induced climate change, the answer is almost certainly ‘no’. But what if we look at a more limited cleanup scenario, restricted to the remediation of conventional oil and gas wells? Even then, it seems that the oil industry may already be bankrupt.
As a case study, this paper estimates the solvency of the (conventional) oilpatch in the Canadian province of Alberta. By law, Albertan oil companies are required to pay for well remediation. To date, however, the oil industry has saved little for this expense. Instead, it has assumed that future oil production will pay for existing cleanup liabilities. But will it?
Using cleanup estimates from the Alberta Liabilities Disclosure Project, I estimate the past, present and future solvency of the (conventional) Alberta oil industry. I find that at present, the oilpatch sits on the precipice of insolvency
A Modern Anarchism (Part 1): Anarchist Analysis
Full text linkWe stand now at a turning point, wherein many roads sprawl out in front of us. With unprecedented access to information, the atlas seems to lie within our hands. But, at this crossroads, the popularizers of these many paths shout over one another to persuade new travelers, only to find that most travelers now choose tourism rather than migration; exploration rather than arrival. It is hard to blame them. Having seen many return from a path leading to a dead-end, or worse, having lost those they know to a terrible bramble from which they will never escape, these weary travelers are paralyzed by choice. Confused and discouraged, many simply return home where a tormentor awaits, but wherein there is no longer the stress of uncertainty.
I would like to tell you of a new path: its extent not yet fully explored, but peering through the forestation beyond, a great light emanates forth. Before we proceed, I would like to pose a question: why has this society accumulated so much power, yet somehow fails to meet the most basic needs of humanity? Why has this hierarchical structure changed hands between so many rulers, yet the peace they have promised never lasts? Their hands bloody, their adherents marching behind, a new society of domination always follows in time. Why? Those intent on creating their own societies of domination will offer all manner of empty excuses. But the true answers lie within an ideology which has been suppressed by the power hoarders: anarchism.
This work is not meant to be a brief introduction to the topic. There are plenty of those already in existence. Instead, I want to offer a modern synthesis of anarchist ideas. So, whereas many other books and essays endeavor to give a broad, non-committal overview, here I want to ground you in a particular location within the body of anarchist thought. In doing this, we will not wander down every trail, but we will stop to look at the scenery from time to time. And, for this reason, one might see this work as motivated by the impulse described by Voline in his work On Synthesis :
“The anarchist conception must be synthetic: it must seek to become the great living syn-thesis of the different elements of life, established by scientific analysis and rendered fruitful by the synthesis of our ideas, our aspirations and the bits of truth that we have succeeded in discovering; it must do it if it wishes to be that precursor of truth, that true and undistorted factor, not bankrupting of human liberation and progress, which the dozens of sullen, narrow and fossilized ‘isms’ obviously cannot become.”
Such a process is, of course, a lofty goal for any one person to carry out. To do this, I will go beyond the standard list of European thinkers that one is typically introduced to when they begin an inspection of this subject. These names will certainly feature in our narrative, as they were very important figures in the development of anarchism as a revolutionary movement. But the ideas of the anarchists are not only important to some specific geographic region. Now, more than ever before, anarchism has achieved a state of critical insight, especially as it has been informed by the work of Black, queer, indigenous, feminist, decolonial, and other anarchist thinkers.
All those people who strive to be free of oppression will find their common struggle within its basis. After all, many of these realizations root to the earliest stages of humanity and will likely be at play in any possible human society. Many other anarchist works have failed to take into account these new developments of anarchist theory, to understand where the original struggles have fallen short, and then cooperate alongside this new coalition of thinkers in bringing anarchist principles to their highest culmination.
So let us begin..
Blood and Oil in the Orient: A 2023 Update
Full text linkThe 2023 war between Hamas and Israel elicits many different explanations. As with previous regional hostilities, here too, the pundits and commentators have numerous overlapping processes to draw on – from the struggle between the Zionist and Palestinian national movements, to the deep hostility between the Rabbinate and Islamic churches, to the many conflicts between Israel and Arab/Muslim states, the contentions between the declining superpowers (United States and Russia) and their rising contenders (like China, Iran, Turkey), the rift between western and eastern cultures, and so on.
The experts also highlight the growing importance of local militias – from Jewish settler organizations, to ISIS, Hamas, Islamic Jihad, Hezbollah, the Houthi movement, the Wagner Group and Kadyrovites Chechens – groups that operate under different political, religious and criminal guises, with varying financing and support from local, governmental and international sources to proxy and/or challenge different states.
Our article does not deal with these specificities. Instead of focusing on the particular and unique, we concentrate on the general and universal. Concretely, we argue that the current war between Hamas and Israel shares an important common denominator with prior clashes in the region – namely, that it constitutes an energy conflict and that it correlates with the differential nature of capital accumulation. We coined these two terms in the late 1980s and have studied their underpinnings and implications for the Middle East and beyond ever since. Our purpose in this paper is to highlight our theoretical arguments, update some of our key empirical evidence and show how both the theory and findings apply to the current Hamas-Israel war
הקפיטליזציה של סרטי הקולנוע (The Capitalization of Movies)
Full text link"תוך פחות מארבעים שנה הצליחו בעלי הסרטים לא רק להכפיל את הריכוזיות לנקודה שבה כ-90% מהכנסות הסרטים מתקבלות מ-10% בלבד מכלל הסרטים, אלא גם לצמצם פי ארבעה את הסיכון הדיפרנציאלי של רווחיהם" • מתוך ספרם של יהונתן ניצן ושמשון ביכלר, ההון ושברו