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Wars Have Become Too Cheap to Boost Growth
No full textFROM THE NOTE: This week, with the Federal Reserve Banks of New York and Atlanta anticipating sharply lower GDP growth for 2019:Q1, President Trump presented a ‘Budget for A Better America’, calling for a smaller government and a bigger military. Forty years ago, the very same call was hailed as the best recipe for renewed growth. The U.S. ruling class was getting ready to install Ronald Reagan as President, abandon the Cold War and embark on neoliberalism, and it argued that, for that shift to succeed, the country needed a leaner government in order to unleash its entrepreneurial spirit and crowd-in private investment, and that it required a strong military in order to boost its global muscle and open world markets for its products and capital. Ideology aside, one key reason for the growth optimism of the time was rising military spending. . .
Literature and Political Economy: An Invitation
Get PDFMost people think of science and literature as distinct human endeavours. According to received convention, science is mostly about ‘mind’, whereas literature is largely about ‘heart’. Science, goes the argument, is by and large rational, literature primarily emotional. Science is about thinking, literature about feeling.
The practical implication of this duality is that many who consider themselves scientists – particularly in the so-called ‘social sciences’ and especially in ‘economics’ – pay little or no attention to belles-lettres. As far as they are concerned, fiction, poetry and drama are diversions from serious academic work. Occasionally, when going on vacation or to an academic conference, they’ll throw a few cheap thrills into their handbag for ‘relaxation’. They’ll use them instead of sleeping pills after they are done surfing their phones and zapping their telescreen’s channels.
Now, it is true the that line between creative belles-lettres and capitalized cheap thrills has blurred in recent decades – so much so that it’s sometimes difficult to tell them apart. And it is also true that as the number of new novels exploded, their average quality plummeted.
But these shifting patterns are secondary. There is no need to read Leon Trotsky’s path-breaking book on Literature and Revolution (1925) or C.P. Snow’s warning on The Two Cultures and the Scientific Revolution (1959) to realize that literature in general and novels in particular remain crucial for understanding – and occasionally affecting – the socio-scientific history of humanity
Energy, Hierarchy and the Origin of Inequality
Get PDFWhere should we look to understand the origin of inequality? I propose an unusual window of evidence—modern societies. I hypothesize that evidence for the origin of inequality is encoded in the institutional structure of industrial societies. To test this idea, I use a model to project modern trends into the past. This model takes the modern relation between energy, hierarchy, and inequality and creates a hindcast of the origin of inequality. The results are broadly consistent with the available evidence. The model predicts an explosion of inequality with the transition from hunter-gathering to agriculture, followed by a plateau. This finding potentially opens a new window of evidence into the origin of inequality
Jurisdictional Tax Rates. How the Corporate Tax System Fuels Concentration and Inequality
Get PDFCorporate concentration in the United States has been on the rise in recent years, sparking a heated debate about its causes, consequences, and potential remedies. In this study, we examine a facet of public policy that has been largely neglected in current debates about concentration: corporate tax policy. As part of our analysis we develop the first empirical mapping of the effective tax rates (ETRs) of nonfinancial corporations disaggregated by size and broken down by jurisdiction. Our findings reveal a striking and persistent tax advantage for big business in recent decades. Since the mid-1980s, large corporations have faced lower worldwide ETRs relative to their smaller counterparts. The regressive worldwide ETR is driven by persistent regressivity in the domestic ETR and a marked drop in the progressivity of the foreign ETR over the past decade. We go on to show how persistent regressivity in the worldwide tax structure is bound up with the increasing relative power of large corporations within the corporate universe, as well as a shift in firm-level power relations. As large corporations become less disposed to investments that may indirectly benefit ordinary workers, they become more disposed to shareholder value enhancement that directly benefits the asset-rich. What this means is that the corporate tax structure is connected not only to rising corporate concentration, but also to widening household inequality
A New Cosmology for Analyzing Capitalism and the Global Order. Review of Capital as Power: A Study of Order and Creorder
Get PDFFROM THE REVIEW: Capital as Power is a fascinating book because it dares to challenge conventional wisdom while offering a coherent and persuasive theory as a replacement. This is especially what I liked about this book. It's easy enough to criticize the world and say that things are terrible. That seems to be a favorite pastime for just about everybody nowadays. But it's far more difficult to offer a comprehensive alternative that plausibly explains, through engaging theoretical and empirical analysis, how much of the world works. That's what Nitzan and Bichler have done with this masterpiece.
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This is one of the greatest works in political economy to have come out in this century. I especially like that they analyze economics as a social construct rather than as an objective scientific discipline, which it most certainly is not. Having said that, I don't agree with Nitzan and Bichler on everything. For one, they have a basic causality problem: if all human history simply boils down to a power process, then what explains the power process itself? Where does that come from, what are its causal antecedents? You cannot really answer this question without stepping, one way or another, into the material realm of energy flows and conversions. In other words, you can't explain the causation of a social process by repeatedly invoking some other social process, because that leads to an infinite regress. Eventually there has to be something outside of human society that has a powerful impact on the evolution of society itself. There must be a series of bridges between the ecological realm and human civilization, but Nitzan and Bichler don't really bother with any of that. Their central theory, however persuasive, will always remain provisional and incomplete until a more comprehensive theory comes along that integrates changes in the natural world with changes in human societies
Capitalism's Deniers
No full textA new, capitalism-denying book is on the shelves, and it makes a stunning discovery: ‘Capitalism without competition is not capitalism’! Capitalist crisis, like climate change, tends to breed ‘capitalism deniers’. The problem, argue the deniers, lies not in capitalism but in its ‘distortions’. In its pure form, they maintain, capitalism is the best of all possible worlds. But to the deniers’ chagrin, contemporary capitalism is no longer pristine. Unlike its original, once-upon-a-time version, its current one is subject to distorting ‘imperfections’, ‘shocks’ and ‘exogenous’ events. And it is these aberrations – rather than capitalism itself – that should be blamed for the system’s misfortunes
Ecological Limits and Hierarchical Power
No full textNowadays, it is commonplace to claim that the economy overuses our limited material and energy resources and that this overuse threatens both human society and the biosphere. Other than anti-science cranks, the only ones who seem to deny this claim are mainstream economists. In our view, though, this conventional condemnation of the economy is somewhat misleading. As we see it, the root of our ecological problems lies not in the ‘economy’, but in the hierarchical power structure of capitalism
How the Rich are Different: Hierarchical Power as the Basis of Income and Class
Get PDFWhat makes the rich different? Are they more productive, as mainstream economists claim? I offer another explanation. What makes the rich different, I propose, is hierarchical power. The rich command hierarchies. The poor do not. It is this greater control over subordinates, I hypothesize, that explains the income and class of the very rich. I test this idea using evidence from US CEOs. I find that the relative income of CEOs increases with their hierarchical power, as does the capitalist portion of their income. This suggests that among CEOs, both income size and income class relate to hierarchical power. I then use a numerical model to test if the CEO evidence extends to the US general public. The model suggest that this is plausible. Using this model, I infer the relation between income size, income class, and hierarchical power among the US public. The results suggest that behind the income and class of the very rich lies immense hierarchical power
On Literature and Research: An Arabesque (על ספרות ומחקר: ערבסקה)
Get PDFהדברים הבאים נכתבו ב-2007 כטיוטה שטרם נסתיימה. במקורם, הם היו אמורים להיות ראשיתו של מאמר שיתאר את סופרי "המלחמה הגדולה", מלחמת-העולם הראשונה, אלה שכתבו עליה כחיילים, כנפגעים, כפליטים או כמשקיפים. אלא שהמאמר הלך והסתלסל ויצא לדרכים חדשות עד שקיבל חיים משלו. מכל מקום, הוא לא נכתב כסקירה אקדמית בעלת יומרות תיאורטיות, אלא כמעגלי זרימה מתחברים, ערבסקות של מחשבות וצלליות חומקות המשתלבות למבנה רופף שמתגלה ונעלם. העבודה על המאמר, שהיה אמור להיות רחב בהיקפו, לא הסתיימה, וכנראה לא נשוב אליו עוד. ואף על פי כן מצאנו עניין בפרסומו כפי שהוא בתוספת כמה הבהרות והערו
Propertization: The Process by which Financial Corporate Power has Risen and Collapsed
Get PDFElsewhere I argue that the legal concept of property was created in the image of money in the late Roman Republic. Since then, the division of property and contract has been an underlying structure of Western law. The paper argues that a main way of structuring financial corporate power, especially money market funds (MMFs), is a propertization of contractual claims. Propertization here means to grant property rights to shareholders who are almost reduced to functionless debenture holders and thus supposed to have only contractual claims. The paper argues that this propertization has led to the rise of financial corporate power, especially MMFs and their money‐creation mechanism. The paper also explores how the propertization of MMF shares contributed to generating the financial crisis of 2008, and it ends by briefly discussing a possible MMF reform policy