dunnettreader + profit   62

Political Rents and Profits in Regulated Industries - ProMarket July 2016
A new working paper by James Bessen from Boston University finds that much of the rise in corporate profits since 2000 was caused by political rent seeking.
profit  business-and-politics  utilities  consumer_protection  competition  regulation  anti-trust  rents  market_failure  political_economy  paper  from instapaper
july 2016 by dunnettreader
Egmont Kakarot-Handtke - Essentials of Constructive Heterodoxy: Financial Markets :: SSRN - June 2015
University of Stuttgart - Institute of Economics and Law -- What stands before all eyes as failed Orthodoxy is ultimately caused by the wrong answer to Mill's Starting Problem. It is now pretty obvious that one cannot put utility maximization, equilibrium, well-behaved production functions, ergodicity or any other physical or psychological or sociological or behavioral assumption into the premises. No way leads from such premises to the explanation of how the actual market economy works. The logical consequence is to discard them. Having first secured a superior formal starting point, the present paper addresses the question of how the various types of financial markets emerge from the elementary monetary circuit. -- Pages in PDF File: 33 -- Keywords: new framework of concepts, structure-centric, Law of Supply and Demand, Profit Law, IOU, complementarity of retained profit and saving, securities, bonds, common stock, mortgages, consumer financing, helicopter money -- didn't download
paper  SSRN  economic_theory  financial_system  capital_markets  money  profit  credit  asset_prices  investment  mortgages  leverage  consumer_finance  savings  equity-corporate  equity_markets  bond_markets 
september 2015 by dunnettreader
Primary and Secondary Markets by Egmont Kakarot-Handtke :: SSRN - Aug 2011, update March 2015
Also Dec 2012 Levy Economics Institute of Bard College Working Paper No. 741 -- University of Stuttgart - Institute of Economics and Law -- This paper swaps the standard behavioral axioms for structural axioms and applies the latter to the analysis of the emergence of secondary markets from the flow part of the economy. Real and nominal residuals at first give rise to the accumulation of the stock of money and the stock of commodities. These stocks constitute the demand and supply side of secondary markets. The pricing in these markets is different from the pricing in the primary markets. Realized appreciation in the secondary markets is different from income or profit. To treat primary and secondary markets alike is therefore a category mistake.-- Pages in PDF File: 26 -- Keywords: new framework of concepts, structure-centric, axiom set, residuals, real and monetary stocks, money, credit, financial saving, nonfinancial saving, net worth, financial profit, nonfinancial profit, retained profit, appreciation, wealth -- downloaded pdf to Note
paper  SSRN  economic_theory  macroeconomics  financial_system  markets  markets-structure  primary_markets  secondary_markets  asset_prices  profit  investment  interest_rates  savings  capital_gains  money  wealth  credit  liquidity  downloaded 
september 2015 by dunnettreader
Egmont Kakarot-Handtke - Schumpeter and the Essence of Profit :: SSRN - May 2011, update May 2015
University of Stuttgart - Institute of Economics and Law -- Schumpeter had a clear vision of the developing economy, but he did not formalize it. The quest for a germane formal basis is in the following guided by the general question: what is the minimum set of foundational propositions for a consistent reconstruction of the evolving money economy? We start with three structural axioms. The claim of generality entails that it should be possible to free Schumpeter’s approach from its irksome Walrasian legacy and to give a consistent formal account of the elementary circular flow that served him as a backdrop for the analysis of the entrepreneur-driven market system. -- Pages in PDF File: 28 -- Keywords: new framework of concepts, structure-centric, axiom set, profit, money, credit, structural stress, catching-up process, monopoly -- downloaded pdf to Note
paper  SSRN  economic_theory  economic_history  intellectual_history  19thC  20thC  Schumpeter  economic_growth  economic_sociology  entrepreneurs  profit  investment  Innovation  creative_destruction  money  markets-structure  monopoly  prices  firms-theory  neoclassical_economics  equilibrium  downloaded 
september 2015 by dunnettreader
Egmont Kakarot-Handtke - Economics for Economists :: SSRN - update April 2015
University of Stuttgart - Institute of Economics and Law -- The characteristic capability of science – to turn whatever it might touch into knowledge – seems to have eluded economics. Currently, economists do not understand how the economy works. To get out of the cul-de-sac requires a paradigm shift. It consists in replacing behavioral axioms by structural axioms. The subject matter of theoretical economics is not human behavior but systemic behavior. From the structural analysis follows a new Law of Supply and Demand and a new Profit Law for the economy as a whole. The conventional supply-demand-equilibrium approach is refuted. This implies that the reliance on the spontaneous order metaphor is unfounded. -' Number of Pages in PDF File: 29 -- downloaded pdf to Note
paper  economic_theory  macroeconomics  profit  equilibrium  behavioralism  agency-structure  agent-based_models  downloaded 
september 2015 by dunnettreader
Georges Gloukoviezoff - Les banques face à leurs clients: Salariés de banque et inclusion bancaire | La Vie des idées - 28 janvier 2013
English translation March 2014 -- http://www.booksandideas.net/When-French-Banks-Encounter-their.html -- Most banks have now abandoned their previous function of providing advice. Instead, they view their services as products designed to maximize profits. They have started invoking the client’s autonomy as a way of passing on the risk of financial exclusion to their customers. In what ways have bank employees reacted to these new circumstances? -- Georges Gloukoviezoff est docteur en économie et spécialiste des questions d’inclusion financière des particuliers. Il est membre de l’Observatoire national de la pauvreté et de l’exclusion sociale. Il a publié en octobre 2010 aux Presses Universitaires de France "L’Exclusion bancaire. Le Lien social à l’épreuve de la rentabilité". Il tient également un blog sur la page d’Alternatives Economiques. -- downloaded French version as pdf to Note
article  France  financial_system  banking  access_to_finance  access_to_services  labor  labor-service_sector  consumer_protection  risk_management  risk_shifting  knowledge_economy  knowledge_workers  financial_innovation  advisory_services  business_practices  business-norms  profit  profit_maximization  financial_regulation  customer_relations  exclusion  exclusion-economic  economic_sociology  poverty  workforce  know-how  services  services-worker_autonomy  managerialism  productivity  incentives-distortions  consumer-know-how  downloaded 
june 2015 by dunnettreader
Alan Manning - Shifting the Balance of Power: Workers, Wages and Employers over the Next Parliament | Resolution Foundation - April 2015
Professor of Economics in the Department of Economics and Director of the Community Programme at the Centre for Economic Performance at the LSE -- 40 years ago an improving labour market and prices rising faster than wages would have led trade unions to march into the boardroom demanding higher wages and threatening strike action if those demands were not met. Pretty soon, union leaders would have been invited round to Number 10 for beer and sandwiches to be cajoled into wage moderation to prevent an inflationary spiral taking hold. A lot has changed in the past 40 years.These days the Prosecco remains in the fridge and David Cameron used a speech to the British Chambers of Commerce in February to urge pay rises for workers, a somewhat surprising sight. But, there is a simple explanation. Since the crisis began, the average British worker has suffered a fall in living standards deeper and longer than anything experienced for more than a generation. The recent drop in oil prices and the resulting lower inflation will offer some respite but not much. -- Comparing the situation now and 40 years ago, it is hard to escape the conclusion that there has been a fundamental shift in the balance of power from workers to employers and that perhaps this shift has gone too far and it is time to redress the balance somewhat. -- copied to Pocket
article  political_economy  UK_economy  labor_history  Labor_markets  unemployment  wages  profit  productivity  productivity-labor_share  inequality  unions  British_politics  standard_of_living  employers  working_class  competition  Pocket 
april 2015 by dunnettreader
Russell J. Lundholm, George Serafeim, Gwen Yu - FIN Around the World: The Contribution of Financing Activity to Profitability - July 1, 2012 :: SSRN
Russell J. Lundholm, University of British Columbia - Sauder School of Business -- George Serafeim ,Harvard University - Harvard Business School -- Gwen Yu, Harvard Business School -- Harvard Business School Accounting & Management Unit Working Paper No. 2113557 -- We study how the availability of domestic credit influences the contribution that financing activities make to a firm’s return on equity (ROE). Using a sample of 51,866 firms from 69 countries, we find that financing activities contribute more to a firm’s ROE in countries with higher domestic credit. The higher contribution of financing activities is not driven by firms taking greater leverage in these countries, but by firms realizing a higher spread (i.e., a greater difference in operating performance and borrowing cost) when more domestic credit is available. Also, we find that firms partially substitute trade credit for financial credit, with large firms exhibiting the greatest rate of substitution. For small firms, the rate of substitution improves with the country’s available domestic credit, while large firms are insensitive to this friction. The findings suggest that both country and firm-level factors have a significant impact on how financing activities contribute to corporate performance. -- Pages in PDF File: 51 -- Keywords: Domestic Credit, Financial Statement Analysis, Return on Equity, Corporate Performance -- didn't download
paper  SSRN  corporate_finance  profit  interest_rates  financial_sector_development  credit  SMEs  financial_access  trade_finance  leverage  shareholder_value 
april 2015 by dunnettreader
Robert G. Eccles, Ioannis Ioannou, George Serafeim - The Impact of Corporate Sustainability on Organizational Processes and Performance - November 23, 2011 :: SSRN - Management Science, Forthcoming
Robert G. Eccles, Harvard Business School -- Ioannis Ioannou, London Business School -- George Serafeim, Harvard University - Harvard Business School *--* We investigate the effect of a corporate culture of sustainability on multiple facets of corporate behavior and performance outcomes. Using a matched sample of 180 companies, we find that corporations that voluntarily adopted environmental and social policies many years ago – termed as High Sustainability companies – exhibit fundamentally different characteristics from a matched sample of firms that adopted almost none of these policies – termed as Low Sustainability companies. In particular, we find that the boards of directors of these companies are more likely to be responsible for sustainability and top executive incentives are more likely to be a function of sustainability metrics. Moreover, they are more likely to have organized procedures for stakeholder engagement, to be more long-term oriented, and to exhibit more measurement and disclosure of nonfinancial information. Finally, we provide evidence that High Sustainability companies significantly outperform their counterparts over the long-term, both in terms of stock market and accounting performance. The outperformance is stronger in sectors where the customers are individual consumers instead of companies, companies compete on the basis of brands and reputations, and products significantly depend upon extracting large amounts of natural resources. -- Keywords: sustainability, corporate social responsibility, culture, governance, disclosure, performance -- didn't download
paper  SSRN  corporate_governance  corporate_citizenship  corporate_finance  CSR  brands  reputation  incentives  sustainability  long-term_orientation  natural_resources  firms-theory  firms-structure  firms-organization  executive_compensation  business-norms  profit  disclosure 
april 2015 by dunnettreader
Richard Cantillon, An Essay on Economic Theory, Chantal Saucier, trans., Mark Thornton, ed. (2010) Books | Mises Institute
Mark Thornton and Chantal Saucier have accomplished the arduous task of bringing forth a new and improved translation of Cantillon’s famous work. Heretofore the only English translation of the Essai available has been the 1931 edition produced by Henry Higgs for the Royal Economic Society. Though competent, it has become less serviceable over time, as more and more of its shortcomings devolved (not the least of which is the antiquated use of “undertaker” in place of “entrepreneur”). Saucier provides a more accurate and lucid account, better suited to the 21st century. Thornton’s hand shows not only in competent guidance of the translator but in the inclusion of numerous explanatory footnotes that add historical context. Robert F. Hébert writes the foreword. -- downloaded pdf to Note
books  etexts  intellectual_history  18thC  France  Cantillon  political_economy  economic_theory  value-theories  systems_theory  business_cycles  financial_system  interest_rates  FX  capital_flows  banking  profit  risk  entrepreneurs  agriculture  demography  natural_resources  labor  capital  money  money_supply  money_market  mercantilism  trade-policy  trade-theory  downloaded 
february 2015 by dunnettreader
Jeff Horn - Economic Development in Early Modern France: The Privilege of Liberty, 1650–1820 (release date for hardback mid-Feb 2015) | European history after 1450 | Cambridge University Press
Privilege has long been understood as the constitutional basis of Ancien Régime France, legalising the provision of a variety of rights, powers and exemptions to some, whilst denying them to others. In this fascinating new study however, Jeff Horn reveals that Bourbon officials utilized privilege as an instrument of economic development, freeing some sectors of the economy from pre-existing privileges and regulations, while protecting others. He explores both government policies and the innovations of entrepreneurs, workers, inventors and customers to uncover the lived experience of economic development from the Fronde to the Restoration. He shows how, influenced by Enlightenment thought, the regime increasingly resorted to concepts of liberty to defend privilege as a policy tool. The book offers important new insights into debates about the impact of privilege on early industrialisation, comparative economic development and the outbreak of the French Revolution. **--** 1. Introduction: profits and economic development during the Old Régime *--* 2. Privileged enclaves and the guilds: liberty and regulation *--* 3. The privilege of liberty put to the test: industrial development in Normandy *--* 4. Companies, colonies, and contraband: commercial privileges under the Old Régime *--* 5. Privilege, liberty, and managing the market: trading with the Levant *--* 6. Outside the body politic, essential to the body economic: the privileges of Jews, Protestants and foreign residents *--* 7. Privilege, innovation, and the state: entrepreneurialism and the lessons of the Old Régime *--* 8. The reign of liberty? Privilege after 1789 -- look for pdf of Intro once released
books  find  political_economy  economic_history  political_history  17thC  18thC  19thC  France  privileges-corporate  economic_culture  economic_policy  development  monarchy  profit  entrepreneurs  guilds  trading_companies  trade-policy  regulation  industrialization  industrial_policy  Colbert  Colbertism  urban_development  urban_elites  commerce  commercial_interest  French_government  Huguenots  Jews  colonialism  French_Empire  colonies  corporate_finance  monopolies  Levant  MENA  Ottomans  liberties  liberty  Ancien_régime  Louis_XIV  Louis_XV  Louis_XVI  French_Revolution  French_Revolutionary_Wars  Napoleonic_Wars  Restoration-France  bourgeoisie  haute_bourgeoisie  markets  markets-structure  foreign_trade  foreign_policy  foreigners-resident 
february 2015 by dunnettreader
Chris Dillow - For worker control | Stumbling & Mumbling - Dec 2014
Neal Lawson is absolutely right. Social democracy is "hopelessly prepared for the 21st century." This is because it is yet another example of an idea that has outlived its usefulness. Social democrats used to think that they did not need to challenge the fundamental power structures of capitalism because, with a few good top-down economic and social policies, capitalism could be made to deliver increased benefits for workers and the poor in terms both of rising real wages and better public services. (..) Secular stagnation means real incomes mightn't grow much. Globalized (pdf) labour markets and mass unemployment might exacerbate the effect of this in depressing real wages. Job polarization and the degradation of once-good jobs means workers face deteriorating job quality. And (self-imposed) austerity means that what economic growth we do get won't translate into better public services. Times have changed. So the left must change. Neal says: "Instead of pulling policy levers, the job is to create the platforms so that people can collectively change things for themselves." There's one context in which this is especially necessary - the workplace.
21stC  political_economy  stagnation  labor  wages  social_democracy  left-wing  corporate_governance  worker_co-ops  unions  managrrialism  corporate_citizenship  common_good  profit  links  ideology  power-asymnetric 
january 2015 by dunnettreader
Paul Krugmam blog - Recent History in One Chart (Branko Milanovic global inequality trends) | NYTimes.com Jan 2015
A number of people have been putting up candidates for chart of the year. For me, the big chart of 2014 wasn’t actually from 2014 — it was from earlier work (pdf) by Branko Milanovic, which I somehow didn’t see until a few months ago. It shows income growth since 1988 by percentiles of the world income distribution (as opposed to national distributions): {chart} What you see is the surge by the global elite (the top 0.1, 0.01, etc. would be doing even better than his top 1), plus the dramatic rise of many but not all people in emerging markets. In between is what Branko suggests corresponds to the US lower-middle class, but what I’d say corresponds to advanced-country working classes in general, at least if you add post-2008 data with the effects of austerity. I’d call it the valley of despond, and I think it’s going to be a crucial factor in developments over the next few years.
economic_history  post-Cold_War  globalization  20thC  21stC  economic_growth  inequality  labor  wages  middle_class  OECD_economies  emerging_markets  LDCs  capital  profit  plutocracy  China  India  political_economy  poverty  stagnation  downloaded 
january 2015 by dunnettreader
Mike Konczal, review essay - Selling Fast: Public Goods, Profits, and State Legitimacy | Boston Review - November 10, 2014
Nicholas R. Parrillo, Against the Profit Motive: The Salary Revolution in American Government, 1780–1940, Yale University Press, $55 (paper) -- Dana Goldstein, The Teacher Wars: A History of America’s Most Embattled Profession, Doubleday, $26.95 (cloth) -- Radley Balko, Rise of the Warrior Cop: The Militarization of America’s Police Forces, PublicAffairs, $17.99 (paper) -- Adam Smith was not the first, but he was certainly one of the most eloquent defenders of justice delivered according to the profit motive (..)since courts could charge fees for conducting a trial, each court would endeavor, “by superior dispatch and impartiality, to draw to itself as many causes as it could.” Competition meant a judge would try “to give, in his own court, the speediest and most effectual remedy which the law would admit, for every sort of injustice.” Left unsaid is what this system does to those who can’t afford to pay up. Our government is being remade in this mold—the mold of a business. The past thirty years have seen massive, outright privatization of government services. Meanwhile the logic of business, competition, and the profit motive has been introduced into what remains. But for those with a long enough historical memory, this is nothing new. Through the first half of our country’s history, public officials were paid according to the profit motive, and it was only through the failures of that system that a fragile accountability was put into place during the Progressive Era. One of the key sources of this accountability was the establishment of salaries for public officials who previously had been paid on commission.
books  reviews  kindle-available  US_government  US_society  governance  legitimacy  accountability  inequality  justice  privatization  US_history  18thC  19thC  20thC  21stC  competition  profit  Gilded_Age  Progressive_Era  civil_society  civil_liberties  US_constitution  Evernote  EF-add 
november 2014 by dunnettreader
Addressing the Tax Challenges of the Digital Economy (Sept 2014) - OECD/G20 Base Erosion and Profit Shifting Project Tax | OECD
The spread of the digital economy poses challenges for international taxation. This report sets out an analysis of these tax challenges. It notes that because the digital economy is increasingly becoming the economy itself, it would not be feasible to ring-fence the digital economy from the rest of the economy for tax purposes. The report notes, however, that certain business models and key features of the digital economy may exacerbate BEPS risks. These BEPS risks will be addressed by the work on the other Actions in the BEPS Action Plan, which will take the relevant features of the digital economy into account. The report also analyses a number of broader tax challenges raised by the digital economy, and discusses potential options to address them, noting the need for further work during 2015 to evaluate these broader challenges and potential option. - Report can be read online or $ for download
report  OECD  G20  BEPS  21stC  international_political_economy  global_governance  MNCs  taxes  tax_havens  tax_collection  OECD_economies  transfer_pricing  transaction_costs  digital_economy  accounting  firms-structure  IP  profit  arms-length_transactions  treaties  corporate_citizenship  corporate_law  corporate_tax  reform-legal  fiscal_policy 
november 2014 by dunnettreader
Oct 2014 - Release of discussion draft on Action 7 of the BEPS Action Plan (Artificial Avoidance of Permanent Establishment Status) | Tax treaties - OECD
The OECD Action Plan on Base Erosion and Profit Shifting, July 2013, identifies 15 actions to address BEPS in a comprehensive manner and sets deadlines to implement these actions. Action 7 – Prevent the Artificial Avoidance of PE (permanent establishment) Status -- including through the use of commissionnaire arrangements and the specific activity exemptions. Work on these issues will also address related profit attribution issues. -- Public comments are invited on a discussion draft which ... includes proposals for changes to the definition of PE in the OECD Model Tax Convention. -- The Action Plan also notes that MNCs may artificially fragment their operations among multiple group entities to qualify for the exceptions to PE status for preparatory and auxiliary activities. -- Further, the Report Addressing the Tax Challenges of the Digital Economy has identified issues in the digital economy that need to be taken into account in the course of the work on Action 7, namely ensuring that core activities cannot inappropriately benefit from the exception from PE status and that artificial arrangements relating to sales of goods and services cannot be used to avoid PE status.
OECD  OECD_economies  international_political_economy  global_governance  MNCs  taxes  tax_havens  tax_collection  transfer_pricing  treaties  BEPS  accounting  corporate_tax  corporate_citizenship  corporate_law  reform-legal  digital_economy  G20  profit  arms-length_transactions  transaction_costs  firms-structure 
november 2014 by dunnettreader
Kash Mansouri - What Is This ‘BEPS’ Thing, and Should I Care? | Transfer Pricing Economics - Oct 2014
From OECD - "The debate over base erosion and profit shifting (‘BEPS’) has reached the highest political level and has become an issue on the agenda of several OECD and non-OECD countries… The G20 leaders’ meeting in Los Cabos on 18-19 June 2012 explicitly referred to “the need to prevent base erosion and profit shifting” in their final declaration. G20 finance ministers, triggered by a joint statement of UK Chancellor Osborne and German Finance Minister Shaüble, have asked the OECD to report on this issue by their meeting in February 2013. Such a concern was also voiced by US President Obama in his Framework for Business Tax Reform, where it is stated that “the empirical evidence suggests that income-shifting behaviour by multinational corporations is a significant concern that should be addressed through tax reform”." -- The BEPS project is essentially a bunch of working groups, composed of officials from the world’s largest economies, that are tasked with the job of trying to figure out how the international tax landscape for corporations should be changed. They are focusing on a few specific areas, including but not limited to: ** Tax avoidance by digital companies: Do different rules need to be created to specifically address the digital economy? ** Financial loopholes: What changes need to be made to prevent companies from using financial instruments like intercompany loans to avoid paying tax on some of their income? ** Intangibles: Should international transfer pricing norms be revised to make it harder for companies to reduce their taxes simply by moving their intangibles to low-tax jurisdictions? ** Documentation: What sort of international reporting standards could be imposed to make it harder for global companies to shift their income into low-tax jurisdictions?
21stC  international_political_economy  global_governance  MNCs  taxes  tax_havens  tax_collection  OECD_economies  OECD  G20  BEPS  fiscal_policy  reform-legal  reform-economic  profit  transfer_pricing  transnational_elites  IP 
november 2014 by dunnettreader
Nitzan, Jonathan - From Olson to Veblen: The Stagflationary Rise of Distributional Coalitions (1992) | bnarchives
Paper read at the annual meeting of the History of Economics Society. Fairfax, Virginia. 1-2 June (1992). pp. 1-75. -- This essay deals with the relationship between stagflation and the process of restructuring. The literature dealing with the interaction of stagnation and inflation is invariably based on some explicit or implicit assumptions about economic structure, but there are very few writings which concentrate specifically on the link between the macroeconomic phenomenon of stagflation and the process of structural change. Of the few who dealt with this issue, we have chosen to focus mainly on two important contributors – Mancur Olson and Thorstein Veblen. The first based his theory on neoclassical principles, attempting to demonstrate their universality across time and place. The second was influenced by the historical school and concentrated specifically on the institutional features of modern capitalism. Despite the fundamental differences in their respective frameworks, both writers arrive at a similar conclusion, namely, that the phenomenon of stagflation is inherent in the dynamic evolution of collective economic action, particularly in the rise and consolidation of 'distributional coalitions.' -- Keywords: absentee ownership, intangible assets, big business, bonds, capital, accumulation, capitalism, collective action, collusion, corporation, credit, degree of monopoly, distributional coalitions, excess capacity, finance, immaterial wealth, income distribution, industry, inflation, institutions, interest, labour, liabilities, machine process, material wealth, neoclassical economics, normal rate of return, power, price, profit, productivity, property, sabotage, scarcity, stagnation, stagflation, stocks, tangible assets, technology, United States, value
paper  US_economy  economic_history  economic_theory  institutional_economics  Veblen  political_economy  Olson_Mancur  public_choice  collective_action  capital  capitalism  power  power-asymmetric  business-and-politics  interest_groups  interest_rates  interest_rate-natural  profit  corporate_ownership  managerialism  industry  production  productivity  productivity-labor_share  sabotage-by_business  distribution-income  distribution-wealth  wealth  asset_prices  financial_system  credit  competition  monopolies  oligopoly  prices  inflation  stagnation  property  technology  capital_markets  antitrust  neoclassical_economics  change-economic  change-social  levels_of_analyis  mesolevel  microfoundations  downloaded  EF-add 
october 2014 by dunnettreader
Jonathan Nitzan - Global Capital: Political Economy of Capitalist Power (YorkU, Graduate Seminar, Fall Term, 2014-15) | bnarchives
The seminar has two related goals: substantive and pedagogical. The substantive purpose is to tackle the question of capital head on. The course explores a spectrum of liberal and Marxist theories, ideologies and dogmas – as well as a radical alternative to these views. The argument is developed theoretically, historically and empirically. The first part of the seminar provides a critical overview of political economy, examining its historical emergence, triumph and eventual demise. The second part deals with the two ‘materialistic’ schools of capital – the liberal theory of utility and the Marxist theory of labour time – dissecting their structure, strengths and limitations. The third part brings power back in: it analyses the relation between accumulation and sabotage, studies the institutions of the corporation and the state and introduces a new framework – the capitalist mode of power. The final part offers an alternative approach – the theory of capital as power – and illustrates how this approach can shed light on conflict-ridden processes such as corporate merger, stagflation, imperialism and Middle East wars. Pedagogically, the seminar seeks to prepare students toward conducting their own independent re-search. Students are introduced to various electronic data sources, instructed in different methods of analysis and tutored in developing their empirical research skills. As the seminar progresses, these skills are used both to assess various theories and to develop the students’ own theoretical/empirical research projects. -- Keywords: arms accumulation capital capitalism conflict corporation crisis distribution elite energy finance globalization growth imperialism GPE liberalism Marxism military Mumford national interest neoclassical neoliberalism oil ownership peace power profit ruling class security stagflation state stock market technology TNC Veblen violence war -- syllabus and session handouts downloaded pdf to Note
bibliography  syllabus  capital_as_power  international_political_economy  political_economy  economic_theory  liberalism  neoliberalism  neoclassical_economics  Keynesian  Marxist  capital  capitalism  social_theory  power-asymmetric  globalization  financial_system  financial_regulation  risk-systemic  international_finance  finance_capital  financialization  production  distribution-income  distribution-wealth  inequality  MNCs  corporations  corporate_finance  corporate_ownership  corporate_control_markets  economic_growth  economic_models  imperialism  military  military-industrial_complex  IR_theory  ruling_class  class_conflict  energy  energy-markets  MENA  accumulation  accumulation-differential  capital_markets  public_finance  profit  investment  technology  elite_culture  elites-self-destructive  capitalism-systemic_crisis  Veblen  Mumford  downloaded  EF-add 
october 2014 by dunnettreader
Nitzan, Jonathan - LSE Public Event: Can Capitalists Afford Recovery? -- Video and Paper (May 2014) | bnarchives
Presentation at the LSE Department of International Relations. 27 May 2014. -- Theorists and policymakers from all directions and of all persuasions remain obsessed with the prospect of recovery. For mainstream economists, the key question is how to bring about such a recovery. For heterodox political economists, the main issue is whether sustained growth is possible to start with. But there is a prior question that nobody seems to ask: can capitalists afford recovery in the first place? If we think of capital not as means of production but as a mode of power, we find that accumulation thrives not on growth and investment, but on unemployment and stagnation. And if accumulation depends on crisis, why should capitalists want to see a recovery? -- Video duration: 2:24 hours -- Keywords: crisis, differential accumulation, economic policy, economic theory, expectations, growth, income distribution, Keynesianism, Marxism, monetarism, neoclassical economics, profit, underconsumption -- Subjects: BN State & Government, BN Power, BN Region - North America, BN Business Enterprise, BN Value & Price, BN Crisis, BN Production, BN Macro, BN Conflict & Violence, BN Money & Finance, BN Ideology, BN Distribution, BN Methodology, BN Capital & Accumulation, BN Policy, BN Class, BN Labour, BN Growth -- links to LSE on YouTube -- downloaded pdf to Note
paper  video  Great_Recession  financial_crisis  economic_growth  capital_as_power  capitalism-systemic_crisis  economic_theory  economic_models  macroeconomics  neoclassical_economics  Keynesian  Marxist  monetarism  monetary_policy  fiscal_policy  austerity  sovereign_debt  public_finance  public_policy  productivity  production  consumer_demand  underconsumption  investment  profit  productivity-labor_share  distribution-income  distribution-wealth  finance_capital  financialization  capitalization  accumulation  accumulation-differential  elites-self-destructive  elite_culture  ruling_class  class_conflict  Labor_markets  inequality  unemployment 
october 2014 by dunnettreader
Bichler, Shimshon and Nitzan, Jonathan - Nonlinearities of the Sabotage-Redistribution Process - Working Paper May 2014 | bnarchives
The relationship between sabotage and redistribution is inherently nonlinear. This research note illustrates aspects of this nolinearity in the case of the United States. 5 pages - Web page has links to small Excel sheet and 5 jpegs of the graphs. -- Keywords: sabotage redistribution United States-- Subjects: BN Conflict & Violence, BN Data & Statistics, BN Methodology, BN Resistance, BN Power, BN Region - North America, BN Capital & Accumulation, BN Business Enterprise -- downloaded pdf to Note
paper  data  capital_as_power  US_economy  political_economy  political_culture  economic_culture  business-and-politics  corporations  profit  distribution-income  labor_share  oligopoly  MNCs  military-industrial_complex  financial_system  finance_capital  financialization  accumulation  capitalism  capitalism-systemic_crisis  elites-self-destructive  inequality  neoliberalism  public_goods  sabotage-by_business  privatization  power-asymmetric  downloaded  EF-add 
october 2014 by dunnettreader
Bichler, Shimshon and Nitzan, Jonathan - The Asymptotes of Power - Real-World Economics Review. No. 60. June 2012. pp. 18-53 | bnarchives
Article workup of earlier conference paper -- This is the latest in a series of articles we have been writing on the current crisis. The purpose of our previous papers was to characterize the crisis. We claimed that it was a 'systemic crisis', and that capitalists were gripped by 'systemic fear'. In this article, we seek to explain why. The problem that capitalists face today, we argue, is not that their power has withered, but, on the contrary, that their power has increased. Indeed, not only has their power increased, it has increased by so much that it might be approaching its asymptote. And since capitalists look not backward to the past but forward to the future, they have good reason to fear that, from now on, the most likely trajectory of this power will be not up, but down. The paper begins by setting up our general framework and key concepts. It continues with a step-by-step deconstruction of key power processes in the United States, attempting to assess how close these processes are to their asymptotes. And it concludes with brief observations about what may lie ahead. -- Keywords: capitalization distribution power, systemic crisis -- Subjects: BN Money & Finance, BN Conflict & Violence, BN Distribution, BN Resistance, BN Power, BN Region - North America, BN Business Enterprise, BN Capital & Accumulation, BN Value & Price, BN Class, BN Crisis -- downloaded pdf to Note, also Excel data sheet
article  international_political_economy  capital_as_power  financial_system  international_finance  global_economy  global_system  ruling_class  transnational_elites  elite_culture  elites-self-destructive  globalization  power-asymmetric  Great_Recession  financial_crisis  finance_capital  financialization  distribution-income  distribution-wealth  profit  labor_share  risk-systemic  inequality  plutocracy  1-percent  conflict  violence  class_conflict  neoliberalism  corporate_citizenship  systems-complex_adaptive  systems_theory  grassroots  opposition  democracy  democracy_deficit  accumulation  capitalization  US_politics  US_economy  political_economy  political_culture  economic_culture  elites  rebellion  failed_states  property_rights  business-and-politics  business-norms  economic_growth  fear  data  capitalism-systemic_crisis  downloaded  EF-add 
october 2014 by dunnettreader
Coen Teulings, Richard Baldwin - Secular stagnation: Facts, causes, and cures – a new Vox eBook | vox 10 September 2014
The CEPR Press eBook on secular stagnation has been viewed over 80,000 times since it was published on 15 August 2014. -- Six years after the Crisis and the recovery is still anaemic despite years of zero interest rates. Is ‘secular stagnation’ to blame? Introduction - Coen Teulings and Richard Baldwin **--** I. Opening the debate -- 1. Reflections on the ‘New Secular Stagnation Hypothesis’, Laurence H Summers. **--** II. Three issues: Potential growth, effective demand, and sclerosis -- 2. Secular stagnation: A review of the issues, Barry Eichengreen -- 3. The turtle’s progress: Secular stagnation meets the headwinds, Robert J Gordon -- 4 Four observations on secular stagnation, Paul Krugman. -- 5. Secular joblessness, Edward L Glaeser. **--** III. Further on potential growth. -- 6. Secular stagnation? Not in your life - Joel Mokyr. -- 7 Secular stagnation: US hypochondria, European disease?, Nicholas Crafts. **--** IV. Further on effective demand. -- 8. A prolonged period of low real interest rates?, Olivier Blanchard, Davide Furceri and Andrea Pescatori. -- 9. On the role of safe asset shortages in secular stagnation, Ricardo J Caballero and Emmanuel Farhi. -- 10. A model of secular stagnation, Gauti B. Eggertsson and Neil Mehrotra. -- 11. Balance sheet recession is the reason for secular stagnation, Richard C Koo. -- 12. Monetary policy cannot solve secular stagnation alone
Guntram B Wolff. **--** V. Further on sclerosis -- 13. Secular stagnation: A view from the Eurozone, Juan F. Jimeno, Frank Smets and Jonathan Yiangou -- downloaded pdf to Note
books  etexts  kindle-available  economic_history  18thC  19thC  20thC  21stC  economic_theory  economic_growth  Great_Recession  stagnation  international_political_economy  capitalism  financialization  productivity  investment  technology  Labor_markets  unemployment  demand-side  supply-side  infrastructure  welfare_state  sovereign_debt  fiscal_policy  monetary_policy  central_banks  leverage  risk  uncertainty  macroeconomics  macroprudential_policies  international_monetary_system  global_economy  global_imbalance  interest_rates  profit  wages  Eurozone  US_economy  downloaded  EF-add 
september 2014 by dunnettreader
Raphaele Chappe - Policy Debates In A Post-Piketty World | Schwartz Center for Economic Policy Research - New School
As the ratio of capital to income (which Piketty terms "beta") increases, Piketty argues there is no natural mechanism that would lead r (the rate of return on capital) to adjust downwards so as to perfectly compensate the impact on the distribution, placing emphasis on policies that might reduce r. Taxation is one way to reduce r and Piketty's proposal is a progressive world-wide tax on wealth although many agree that this may prove politically unfeasible, especially in the absence of international legal cooperation. Other tax possibilities for fighting inequality include increasing tax rates on capital gains and dividends (which have been getting favorable treatment in the tax code as compared with labor income), or simply combating tax evasion for the wealthy (see The Price of Offshore Revisited). [Downloaded] In my own research, I plan to run simulations to test the effectiveness of such tax proposals, and their impact on the wealth distribution. -- According to a study written for the Tax Justice Network by a former chief economist at the consultancy firm McKinsey, a global super-rich elite has accumulated an astronomical amount of financial investments hidden in tax havens, at least $21 trillion and as much as $32 trillion of private offshore wealth (as of the end of 2010).
economic_theory  economic_growth  Piketty  inequality  wealth  taxes  tax_havens  1-percent  labor  wages  profit 
september 2014 by dunnettreader
JW Mason - The Slack Wire: Piketty and the Money View - September 2014
All the empirical material in the book relates to stocks and flows of money. But when he turns to explain the patterns he finds in this data, he does it in terms of physical inputs to physical production. The money wealth present in a country is assumed to correspond to the physical capital goods, somehow converted to a scalar quantity. And the incomes received by wealth owners is assumed to correspond to a physical product somehow attributable to these capital goods. But the production processes that are supposed to explain these shifts are described without any data at all, purely deductively. You would think that if Piketty believed that the share of property income in total income depends on physical production technologies, returns to scale, depreciation, etc., then at least half the book would be taken up with technological history. In fact, of course, these topics are not discussed at all. Terms like “production” and “depreciation” are black boxes, pure mathematical formalism. -- Unfortunately, discussion of the book has been almost entirely about the irrelevant formalism. I think that is why the conversation has been so noisy yet advanced so little. -- the disconnect between the two different Pikettys shows, in a negative way, why what I've been calling the money view is so important. The historical data assembled in Capital in the 21st Century is a magnificent accomplishment and will be drawn on by economic historians for years to come. Many of the concrete observations he makes about this material are original and insightful. But all of this is lost when translated into Piketty's preferred theoretical framework. To make sense of the historical evolution of money payments and claims, we need an approach that takes those payments and claims as objects of study in themselves.
books  Piketty  wealth  capitalism  capital  macroeconomics  economic_theory  economic_models  economic_growth  money  investment  investors  profit  technology  production  productivity  political_economy  financial_economics  financial_system  EF-add 
september 2014 by dunnettreader
Squarely Rooted - I Wrote Way Too Much About “Capital in the Twenty-First Century” — Medium - July 2014
Very thought provoking re changes in the composition and returns to capital -- Depreciation is the great systemic regulator — absent productivity/technology growth, depreciation is an absolute limit on our ability to accumulate capital ad infinitum. Or is it? Depreciation is a law of the physical world, and therefore a limit on the accumulation of physical capital, which many people intensely associate with “capital” in their minds. But it is extremely important not to do so in this context, as Piketty uses capital synonymously with all wealth. And the nature of capital itself is changing What does this mean? It means that the focus on capital as stuff is fundamentally off-base — capital, at least as defined by Piketty, is at least to some degree detached from stuff. This makes more sense when you look at the Q-ratio of many of today’s most valuable firms [Apple et al]. These are all vastly above not just the current national average but the highest the national average has ever been, and by an astonishing amount. But investors believe that these tech companies, which have rapidly become a vast part of the economy, are worth way, way more than the sum of their parts. -- ... all these claims [against assets] are, on a fundamental level, determined by legal and political systems that are mutable by humans. They are not laws of nature. This is most clear in Piketty’s discussion of “Rhenish capitalism,” specifically in the curious phenomenon of the relatively-low levels of German capital relative to income - which vanishes when you compare book value instead of market value of capital - overwhelmingly a Tobin’s Q issue. -- Land, in fact, may be the key to explaining why the returns to capital decline much more slowly than models with traditional assumptions would predict. If you confuse “capital” as Piketty defines it with “machines,” even subconsciously, this would make much less sense. -- Oh, and one last thing — land doesn’t depreciate.
books  reviews  Piketty  economic_history  economic_theory  economic_models  economic_growth  investment  profit  capitalism  inequality  rentiers  landowners  capital  wealth  sovereign_wealth_funds  plutocracy  1-percent  capital_markets  investors  manufacturing  technology  EF-add 
september 2014 by dunnettreader
The Reshoring Initiative: Total Cost of Ownership Estimator Tool
The Total Cost of Ownership Estimator is a complimentary tool that enables aggregation of all cost and risk factors into one cost for simpler, more objective decision making. Most companies make sourcing decisions based on price alone, resulting in a 20 to 30 percent miscalculation of actual offshoring costs. With the Total Cost of Ownership Estimator, users account for all relevant factors when determining their total cost of ownership including overhead, balance sheet, corporate strategy and other external and internal business costs. Once your unique data is input into the calculator, you will receive your total cost of ownership analysis complete with: ** Calculations of each source’s cost ** An accumulation of all costs into cost categories. ** A grand total cost. ** Line charts showing each source’s current price, total cost of ownership and 5-year forecast. ** Line charts showing your cumulative cost by category
globalization  global_economy  business  off-shoring  prices  labor  management  profit 
august 2014 by dunnettreader
Steve Denning - From CEO 'Takers' To CEO 'Makers': The Great Transformation - Forbes - August 2014
CEOs, through the pervasive use of share buybacks, have become takers, not makers. Instead of creating value for their organizations and society, they are extracting value. Pervasive share buybacks are an economic, social and moral disaster: they contribute to loss of shareholder value, crippled capacity to innovate, runaway executive compensation, destruction of jobs, rapidly increasing inequality and sustained economic stagnation. Yet share buybacks have become “an unhealthy corporate obsession,” even “an addiction.” The situation is one of fundamental institutional failure. CEOs are extracting value from their firms. Business schools are teaching them how to do it. Institutional shareholders are complicit in what the CEOs are doing. Regulators pursue individuals but remain indifferent to systemic failure. Rating agencies reward malfeasance. Analysts applaud short-term gains and ignore obvious long-term rot. Politicians stand by and watch. In a great betrayal, the very leaders who should be fixing the system are complicit in its continuance. Unless our society reverses course, it is heading for a cataclysm. The solution to fundamental institutional failure goes beyond passing a few regulations or changing the behavior of a few CEOs. It involves changes in behavior in a whole set of institutions and actors: -- Change won’t happen merely by pointing out that shareholder primacy is a bad idea. Bad ideas don’t die just because they are bad. They hang around until a consensus forms around another idea that is better. Fortunately, a consensus is emerging around a better idea. The idea isn’t new. It’s Peter Drucker’s foundational insight of 1973: the only valid purpose of a firm is to create a customer. It’s through providing value to customers that firms justify their existence. Profits and share price increases are the result, not the goal of a firm’s activities
business  busisness-ethics  norms-business  corporate_governance  corporate_finance  investment  investors  management  financialization  finance_capital  capital_markets  inequality  1-percent  Drucker_Peter  Friedman_Milton  shareholder_value  profit 
august 2014 by dunnettreader
Joshua Clover, review essay - Autumn of the Empire [post the Great Recession] | The Los Angeles Review of Books July 2011
Books discussed - Richard Duncan, The Dollar Crisis: Causes, Consequences, Cures *--* Robert Brenner, The Economics of Global Turbulence *--* Giovanni Arrighi, The Long Twentieth Century: Money, Power and the Origins of Our Times *--* Giovanni Arrighi, Adam Smith in Beijing *--*--*--* All three authors are heterodox from view of what passes for informed discourse about economic theory or political economy - by the conclusion of the essay, Giovanni Arrighi's longue-durée of transitions of a succession of capitalist empires becomes the vantage point for discussions of how we got to the Great Recession as well as where we have to start thinking about another way of understanding the geopolitical dynamics of global capitalism (or the global capitalist dynamics of geopolitics) Other TAGGED AUTHORS - Jill Ciment, Paul Krugman, Fernand Braudel, Joseph Schumpeter, John Maynard Keynes, Karl Marx, T.S. Eliot *--* Other TAGGED BOOKS - Reinhardt and Rogoff, This Time It's Different, *--* Michael Lewis, The Big Short: Inside the Doomsday Machine
books  reviews  global_economy  globalization  international_political_economy  financialization  financial_crisis  economic_history  geopolitics  empires  empire-and_business  world_history  world_systems  cycles  15thC  16thC  17thC  18thC  19thC  20thC  Genoa  city_states  Dutch_Revolt  Dutch  British_Empire  US-China  US-empire  imperialism  imperial_overreach  trade  trading_companies  production  productivity  capitalism  competition  profit  investment  international_monetary_system  translatio_imperii  Annales  bubbles  labor  off-shoring  investors  American_exceptionalism  EF-add 
august 2014 by dunnettreader
John P. Diggins - Dos Passos and Veblen's Villains | JSTOR: The Antioch Review, Vol. 23, No. 4 (Winter, 1963-1964), pp. 485-500
Explains apparent shift from radical Left to Goldwater Right as consistent champion of productivist classes - craftsmen, engineers, and labor generally - first against Veblen's villains, the captains of finance capital, the PR men, and the managerialist ethos driven by profit at the expense of productive values of quality, know-how etc -- post WWII, Dos Passos added big government and labor bosses to his villains
article  jstor  19thC  20thC  US_history  US_society  entre_deux_guerres  post-WWII  intellectual_history  political_culture  political_economy  social_order  finance_capital  production  labor  industry  profit  craftsmanship  capitalism  Veblen 
august 2014 by dunnettreader
"The Relevance of Kalecki" by Hyman P. Minsky Ph.D.
Paper prepared for a Conference at the University of Perugia, Perugia, Italy, April 22-24, 1986. -- Recommended Citation -- Minsky, Hyman P. Ph.D., "The Relevance of Kalecki" (1986). Hyman P. Minsky Archive. Paper 306. -- http://digitalcommons.bard.edu/hm_archive/306 -- downloaded pdf to Note
macroeconomics  economic_theory  Keynesian  Post-Keynesian  demand  profit  investment  savings  financial_system  financial_crisis  government_finance  Minsky  downloaded 
july 2014 by dunnettreader
Brad DeLong - The Four Big Valid Issues People Have with Thomas Piketty's Grand Argument: Friday Focus for June 27, 2014 (Brad DeLong's Grasping Reality...)
I think there are four big valid issues with Thomas Piketty's grand argument: [they're all pretty feeble or wishful thinking unfortunately - DeLong puts too heavy a weight on several of them, producing a guesstimate of 50:50 we will have Piketty world if things left on autopilot] -- see comments, especially Dan Kervick who once again challenges Piketty critics for not reading the last chapters (which don't readily translate into mainstream macro models, so their criticism is generally nonresponsive to Piketty’s historical data and explanations)
Piketty  economic_history  economic_theory  economic_models  capital  wealth  profit  savings  charity  1-percent  economic_culture  status  elite_culture  inequality  political_culture  political_economy  moral_economy  capitalism 
june 2014 by dunnettreader
JW Mason - The Slack Wire: Mehrling on Black on Capital - June 2014
From Mehrking - downloaded pdf to Note -- Black’s emphasis is on the market value of wealth calculated as the expected present value of future income flows, rather than on the quantity of wealth calculated as the historical accumulation of savings minus depreciation. This allows Black to treat knowledge and technology as forms of capital, since their expected effects are included when we measure capital at market value. For Black, the standard aggregative neoclassical production function is inadequate because it obscures sectoral and temporal detail by attributing current output to current inputs of capital and labor, -- It’s familiar math, but the meaning it expresses remains very far from familiar to the trained economist. For one, the labor input has been replaced by human capital so there is no fixed factor. For another, both physical and human capital are measured at market values, and so are supposed to include technological change. This means that the A coefficient is not the usual technology shift factor (the familiar “Solow residual”) but only a multiplier, indeed a kind of inverse price earnings ratio, that converts the stock of effective composite capital into a flow of composite output. -- In retrospect, the most fundamental source of misunderstanding came (and comes still) from the difference between an economics and a finance vision of the nature of the economy. The classical economists habitually thought of the present as determined by the past. The financial point of view, by contrast, sees the present as determined by the future, or rather by our ideas about the future...and the quantity of capital can therefore change without prior saving.
economic_theory  economic_models  economic_growth  macroeconomics  Piketty  neoclassical_economics  financial_economics  capital  wealth  investment  savings  interest_rates  profit  productivity  human_capital  technology  labor  downloaded  EF-add 
june 2014 by dunnettreader
BofA Merrill Lynch Backs Piketty - Business Insider June 2014
Ajay Kapur and his team said this in a lengthy report titled, "Piketty and Plutonomy: The revenge of inequality," outlining the impacts of plutonomists, or the super rich, on investors. The skew toward the super-rich makes looking at averages an incomplete exercise: "When wealth and income are as concentrated as they are, and expected (a la Piketty) to get even more so, examining the 'average' consumer or 'average' investor makes little sense. Examining the fat tail – the behavior of the plutonomists, rather than that of the multitudinous many – is more advantageous to investors. Plutonomists determine and dominate spending and investment decisions and their magnitudes. Any analysis that does not tease out the skewed global income and wealth distribution, but focuses on the average is flawed from the start and is incomplete, as we step into its deeper extremes." "Economic and earnings surprises are linked to their behavior," they write. -- charts show the biggest wealth gains in US have been made mostly among the super rich. -- see Kapur papers from 2005 & 2006 on Plutonomy -- downloaded pdfs to Note
Piketty  US_economy  economic_history  economic_growth  economic_sociology  economic_culture  plutocracy  inequality  investment  investors  profit  finance_capital  wealth  downloaded  EF-add 
june 2014 by dunnettreader
Branko Milanovic - globalinequality: Where I disagree and agree with Debraj Ray’s critique of Piketty’s Capital in the 21s Century - June 2014
Debraj’s error consists...in not realizing that normal capitalist relations of production (where capitalists tend to be rich) are forgotten when we look at economic laws in an abstract manner. Not doing that is precisely a great virtue of Piketty’s book. Surely, (a) if capital/labor proportions were the same across income distribution; (b) if, more extremely, capitalists were poor and workers rich; (c) if capital were state-owned, all of these contradictions would disappear. But none of (a)-(c) conditions holds in contemporary capitalism. So Piketty’s economic laws and contradictions of capitalism do exist. Where do I agree wit Debraj? That Kuznets curve cannot be easily dismissed. I am currently working on the idea that we are now witnessing the upswing of the 2nd Kuznets curve since the Industrial revolution. Moreover I believe this is not only the 2nd but perhaps 5th, 6th or 10th curve over the past 1000 years in the West. Does this agreement on Kuznets then, by itself, imply that my defense of Piketty’s mechanism cannot be right or consistent? Not at all. Piketty isolated the key features of capitalist inequality trends when they are left to themselves: the forces of divergence (inequality) will win. But there are also other forces: capital destruction, wars, confiscatory taxation, hyperinflation, pressure of trade unions, high taxation of capital, rising importance of labor and higher wages, that at different times go the other way, and, in a Kuznets-like fashion, drive inequality down. So, I believe, Piketty has beautifully uncovered the forces of divergence, mentioned some of the forces of convergence, but did not lay to rest the ghost of Kuznets inverted U shaped curve
books  reviews  economic_history  economic_theory  political_economy  Piketty  capitalism  wealth  labor  wages  Marx  macroeconomics  economic_growth  inequality  cliometrics  Kuznets_curve  savings  investment  profit  rentiers  consumers  Medieval  Renaissance  Europe-Early_Modern  Great_Divergence  EF-add 
june 2014 by dunnettreader
Per Krusell, Tony Smith - Piketty’s ‘Second Law of Capitalism’ vs. standard macro theory | vox , 1 June 2014
Thomas Piketty’s new book has been widely praised for its empirical contribution, but his prediction of rising inequality rests on economic theory. This column argues that Piketty’s pessimistic forecast is based on an extreme – and unrealistic – assumption about households’ saving behaviour. According to standard theory, the wealth–income ratio would increase only modestly as growth falls, so declining growth would not be a powerful force for generating high inequality. -- my 1st Q does standard theory adequately separate the savings patterns of those with extreme wealth before the advent of slower growth? 2nd Q are they assuming wealth = capital?
Piketty  economic_growth  economic_theory  economic_models  macroeconomics  wealth  savings  profit  inequality  wages 
june 2014 by dunnettreader
Thomas Palley » The accidental controversialist: deeper reflections on Thomas Piketty’s “Capital” - April 2014
Using a conventional marginal productivity framework, Piketty provides an explanation of rising inequality based on increases in the gap between the marginal product of capital, which determines the rate of profit (r), and the rate of growth (g). Because capital ownership is so concentrated, a higher profit rate or slower growth rate increases inequality as the incomes of the wealthy grow faster than the overall economy. The conventional character of Piketty’s theoretical thinking rears its head in his policy prescriptions. -- Mainstream economists will assert the conventional story about the profit rate being technologically determined. However, as Piketty occasionally hints, in reality the profit rate is politically and socially determined by factors influencing the distribution of economic and political power. Growth is also influenced by policy and institutional choices. That is the place to push the argument....My prediction is “r minus g” arithmetic will make its way into the curriculum, with the profit rate explained as the marginal product of capital; Chicago School economists will counter the economy has mechanisms limiting prolonged wide divergence of r and g; and Harvard and MIT graduate students will have opportunities to do market failure research arguing the opposite. The net result is economics will be left essentially unchanged and even more difficult to change.
books  reviews  Piketty  economic_theory  economic_models  macroeconomics  neoclassical_economics  productivity  capital  labor  technology  inequality  wealth  political_economy  profit  capitalism  institutional_economics  laisser-faire  information-asymmetric  competition  education-higher  economic_culture  sociology_of_knowledge  heterodox_economics  EF-add 
june 2014 by dunnettreader
Seth Ackerman - Piketty’s Fair-Weather Friends | Jacobin May 2014
Re Piketty not fitting in MIT-liberal economics -- Piketty “misreads the literature by conflating gross and net returns to capital,” Summers wrote. “I know of no study suggesting that measuring output in net terms, the elasticity of substitution is greater than 1, and I know of quite a few suggesting the contrary.” A reader at this point could be forgiven for feeling confused. Didn’t Piketty gather his own data? He did, of course. --As Piketty makes clear, those data — which he’s made freely available on the internet for anyone to check — are indeed “explained” by a net elasticity of 1.3-1.6, which would indicate an extremely weak force of diminishing returns to capital. Yet it’s also true that this figure is far higher than any found in the existing literature — probably more than twice as high as the highest typical estimates. -- Piketty’s estimate of the elasticity of substitution can’t really be compared with those in the literature. His is based on economy-wide data covering decades and centuries while estimates in the literature typically cover only a few years, and often just a few industries. Moreover, his pertain to all private wealth, while the literature focuses narrowly on production capital. -- But most importantly, given the flawed marginalist theory behind it, and its even more flawed basis of measurement... the elasticity of substitution simply cannot be regarded as a meaningful measure of an economy’s technology (or anything else), or as providing any clue to its future. What’s essential, rather, is Piketty’s empirical demonstration that the rate of return on wealth has been remarkably stable over centuries — and, contra Summers, with no visible tendency to vary in any consistent way against the “supply of capital.”
books  reviews  Piketty  economic_history  economic_theory  economic_models  macroeconomics  heterodox_economics  productivity  capital  labor  profit  wages  technology  economic_growth  savings  inheritance  1-percent  inequality  meritocracy  wealth  supermanagers  corporate_governance  corporate_finance  political_economy  economic_culture  economic_sociology  EF-add 
june 2014 by dunnettreader
Suresh Naidu - Capital Eats the World | Jacobin May 2014
A first step could be a multisector model with both a productive sector and an extractive, rent-seeking outlet for investment, so that the rate of return on capital has the potential to be unanchored from the growth of the economy. This model could potentially do a better job of explaining r > g in a world where capital has highly profitable opportunities in rent-seeking ....More fundamentally, a model that started with the financial and firm-level institutions underneath the supply and demand curves for capital, rather than blackboxing them in production and utility functions, could illuminate complementarities among the host of other political demands that would claw back the share taken by capital and lower the amount paid out as profits before the fiscal system gets its take. This is putting meat on what Brad Delong calls the “wedge” between the actual and warranted rate of profit. -- We need even more and even better economics to figure out which of these may get undone via market responses and which won’t, and to think about them jointly with the politics that make each feasible or not. While Piketty’s book diagnoses the problem of capital’s voracious appetite, it would require a different kind of model to take our focus off the nominal quantities registered by state fiscal systems, and instead onto the broader distribution of political power in the world economy.
books  reviews  kindle-available  Piketty  political_economy  economic_theory  heterodox_economics  neoclassical_economics  economic_models  economic_growth  wealth  capital  finance_capital  capitalism  labor  Labor_markets  unemployment  markets_in_everything  tax_havens  investment  investors  savings  inheritance  profit  corporate_governance  corporate_citizenship  inequality  technology  1-percent  rent-seeking  rentiers  class_conflict  oligarchy  taxes  productivity  corporate_finance  property  property_rights  neoliberalism 
june 2014 by dunnettreader
JW Mason - The Slack Wire: Liquidity Preference and Solidity Preference in the 19th Century - March 2014
Re switch from inverted yield curve over 19thC to current expectations re yield curve -- Once capital is embodied in a particular production process and the organization that carries it out, it tends to evolve into the means of carrying out that organization's intrinsic purposes, instead of the capital's own self-expansion. But for this purpose, the difference doesn't matter; either way, the problem only arises once you have, as Leijonhufvud puts it, "a system 'tempted' by the profitability of long processes to carry an asset stock which turns over more slowly than [wealth owners] would otherwise want." The temptation of long-lived production processes is inescapable in modern economies, and explains the constant search for liquidity. But in the pre-industrial US? I don't think so. Long-lived means of production were much less important, and to the extent they did exist, they weren't an outlet for money-capital. Capital's role in production was to finance stocks of raw materials, goods in process and inventories. ..And even land - the long-lived asset in most settings - was not really an option, since it was abundant. The early US is something like Samuelson's consumption-loan world, where there is no good way to convert command over current goods into future production. So there is excess demand rather than excess supply for long-lasting sources of income. The switch over to positive term premiums comes early in the 20th century. ..consistent with the Leijonhufvud story. Liquidity preference becomes dominant in financial markets only once there has been a decisive shift toward industrial production by long-lived firm using capital-intensive techniques, and once claims on those firms has become a viable outlet for money-capital.
economic_history  US_economy  19thC  20thC  capital_markets  interest_rates  investment  industrialization  liquidity  money_market  profit  trade_finance  investors  EF-add 
may 2014 by dunnettreader
JW Mason - The Slack Wire: Wealth Distribution and the Puzzle of Germany - April 2014
In other words, one reason household wealth is low in Germany is because German households exercise their claims on the business sector not via financial assets, but as workers. -- It’s not a coincidence that Europe’s dominant economy has the least market wealth. The truth is, success in the world market has depended for a long time now on limiting dependence on asset markets, just as the most successful competitors within national economies are the giant corporations that suppress the market mechanism internally. Germany, as with late industrializers like Japan, Korea, and now China, has succeeded largely by ensuring that investment is not guided by market signals, but through active planning by banks and/or the state. There’s nothing new in the fact that greater real wealth in the sense of productive capacity goes hand hand with less wealth in the sense of claims on the social product capitalized into assets. Only in the poorest and most backward countries does a significant fraction of the claims of working people on the product take the form of asset ownership. The world of small farmers and self-employed artisans isn’t one we can, or should, return to. Perhaps the world of homeowners managing their own retirement savings isn’t one we can, or should, preserve.
economic_history  economic_growth  political_economy  20thC  21stC  development  wealth  inequality  investment  capital_markets  labor  wages  profit  SMEs  Germany  EU  corporate_governance  corporate_finance  working_class  EF-add 
may 2014 by dunnettreader
Irving Fisher's 1918 Presidential Address to the American Economic Association (Brad DeLong's Grasping Reality...) - May 2014
Irving Fisher: Economists in Public Service: Annual Address of the President: Source: The American Economic Review, Vol. 9, No. 1, Supplement, Papers and Proceedings of the Thirty-First Annual Meeting of the American Economic Association (Mar., 1919), pp. 5-21 Published by: American Economic Association. Stable URL: http://www.jstor.org/stable/1813978 -- full text at Brad -- didn't download
article  jstor  intellectual_history  20thC  WWI  entre_deux_guerres  capitalism  democracy  democratic_peace_theory  Germany  nationalism  protectionism  free_trade  labor  wages  inequality  inheritance  profit  entrepreneurs  health_care  social_order  social_insurance  economic_theory  economic_culture  economic_reform  finance_capital  firms-theory  management  managerialism  EF-add 
may 2014 by dunnettreader
Guy Chet - The Ocean Is a Wilderness: Atlantic Piracy and the Limits of State Authority, 1688-1856 | University of Massachusetts Press
Historians have long maintained that the rise of the British empire brought an end to the great age of piracy, turning the once violent Atlantic frontier into a locus of orderly commerce by 1730. Guy Chet documents the persistence of piracy, smuggling, and other forms of illegal trade throughout the 18thC despite ongoing governmental campaigns to stamp it out. The failure of the Royal Navy to police oceanic trade reflected the state’s limited authority and legitimacy at port, in the courts, and in the hearts and minds of Anglo-American constituents. Chet shows how the traditional focus on the growth of the modern state overlooks the extent to which old attitudes and cultural practices continued to hold sway. Even as the British government extended its naval, legal, and bureaucratic reach, in many parts of the Atlantic world illegal trade was not only tolerated but encouraged. In part this was because Britain’s constabulary command of the region remained more tenuous than some have suggested, and in part because maritime insurance and wartime tax policies ensured that piracy and smuggling remained profitable. When Atlantic piracy eventually waned in the early 19thC, it had more to do with a reduction in its profitability at port than with forceful confrontation at sea. -- Jack Greene gives it high marks
books  17thC  18thC  19thC  British_history  British_Empire  British_Navy  UK_Government  UK_government-colonies  Atlantic  piracy  risk  taxes  insurance  financial_system  smuggling  profit  ports  judiciary  American_colonies  West_Indies 
may 2014 by dunnettreader
Deborah Boucoyannis - The Equalizing Hand: Why Adam Smith Thought the Market Should Produce Wealth Without Steep Inequality | Cambridge Journals Online - Perspectives on Politics - Dec 2013
For long overview of the article, see her post from the LSE blog -- Perspectives on Politics, 11, pp 1051-1070. doi:10.1017/S153759271300282X. - That the market economy inevitably leads to inequality is widely accepted today, with disagreement confined to the desirability of redistributive action, its extent, and the role of government in the process. The canonical text of liberal political economy, Adam Smith's Wealth of Nations, is assumed even in the most progressive interpretations to accept inequality, rationalized as the inevitable trade-off for increasing prosperity compared to less developed but more equal economies. I argue instead that Smith's system, if fully implemented, would not allow steep inequalities to arise. In Smith, profits should be low and labor wages high, legislation in favor of the worker is “always just and equitable,” land should be distributed widely and evenly, inheritance laws liberalized, taxation can be high if it is equitable, and the science of the legislator is necessary to put the system in motion and keep it aligned. Market economies are made in Smith's system. Political theorists and economists have highlighted some of these points, but the counterfactual “what would the distribution of wealth be if all the building blocks were ever in place?” has not been posed. Doing so encourages us to question why steep inequality is accepted as a fact, instead of a pathology that the market economy was not supposed to generate in the first place. --Deborah Boucoyannis is Assistant Professor at the University of Virginia (dab5fw@virginia.edu). Her interests lie in the historical preconditions for the emergence of the liberal order and of constitutionalism.
paper  paywall  political_economy  intellectual_history  economic_theory  Smith  18thC  British_history  Scottish_Enlightenment  inequality  wages  taxes  landowners  monopolies  rent-seeking  luxury  consumer_demand  competition  profit  regulation  power  investment  capital  neoliberalism  Labor_markets  EF-add 
april 2014 by dunnettreader
Deborah Boucoyannis - For Adam Smith, inequality was contrary to the Wealth of Nations | British Politics and Policy at LSE – Feb 2014
Overview of her article in Perspectives on Politics - see Cambridge Journals bookmark - The assumption that Adam Smith accepted inequality as the necessary trade-off for a more prosperous economy is wrong, writes Deborah Boucoyannis. In reality, Smith’s system precluded steep inequalities not out of a normative concern with equality but by virtue of the design that aimed to maximise the wealth of nations. Much like many progressive critics of current inequality, Smith targets rentier practices by the rich and powerful as distorting economic outcomes.
paper  political_economy  intellectual_history  economic_theory  Smith  18thC  British_history  Scottish_Enlightenment  inequality  wages  taxes  landowners  monopolies  rent-seeking  luxury  consumer_demand  competition  profit  regulation  power  investment  capital  neoliberalism  Labor_markets  EF-add 
april 2014 by dunnettreader
EconoSpeak: Inequality and Sabotage: Piketty, Veblen and Kalecki (for anne at Economist's View)
Nearly a century ago, Thorstein Veblen offered insights into this mechanism in his The Engineers and the Price System. To Veblen r>g (although he didn't use that term) was a strategy pursued by business, not simply a statistical finding. As Veblen points out, "this is matter of course, and notorious. But it is not a topic on which one prefers to dwell." -- Kalecki outlined three categories of business objection to a full employment by government spending: "(i) dislike of government interference in the problem of employment as such; (ii) dislike of the direction of government spending... (iii) dislike of the social and political changes resulting from the maintenance of full employment." It is the first and third of these objections that have the most direct bearing on the issue of r>g -- There are different modes of efficiency and those differences result in different effects on the rate of return to capital. In other words, there are r>g efficiencies and there are r<g efficiencies. An example of an r>g efficiency would be a new machine that uses less fuel and less labour to produce a given amount of output. An example of an r<g efficiency would be a reduction in the length of the standard working day that improves worker productivity by reducing fatigue and increasing overall well being. Both are examples of efficiencies but they differ as to whom the benefit of the efficiency gain primarily accrues.
US_economy  US_history  19thC  20thC  Great_Depression  economic_history  economic_growth  political_economy  capital  capitalism  labor  Labor_markets  wages  unemployment  consumer_demand  profit  investment  unions  Veblen  Kalecki  productivity  inequality  EF-add 
march 2014 by dunnettreader
Pagina Web del Prof. Fabio Petri [papers, draft textbook, class materials] - heterodox microeconomics, Sraffa capital debates, intellectual history, political economy
Links to pdfs and docs -- Lecture On Economic Policy *--* (downloaded to Note) Comment on Gintis (with E. Bilancini) with Appendix *--*- Una prospettiva disincantata sulla crisi e sulla teoria contemporanea *--* (downloaded to Note) On the current debate on capital theory *--*- On the relevance of reswitching. *--* (downloaded to Note) *--* (downloaded to Note)-Investment depends on output. *--* (downloaded to Note and reformatted for spacing, converted to pdf)- Capital Theory: a synthetic introduction to its historical development. *--* - Investment depends on output - a new critique of Say's Law ('Neglected Implications...') *--* (downloaded to Note)- Blaug Versus Garegnani on the Formalist Revolution and the Evolution of Neoclassical Capital Theory ***---*** Advanced Microeconomics Textbook "Microeconomics for the critical mind" - Some Provisional Chapters ***---*** Advanced Microeconomics Petri Ch0, Contents and Preface *--*
Advanced Microeconomics Petri Ch1, The Classical or Surplus Approach *--*
Advanced Microeconomics Petri Ch2, The Classical Approach: Formal Treatment. *--*
Advanced Microeconomics Petri Ch3, The Marginal or Neoclassical Approach: A Simple Description. *--*
Advanced Microeconomics Petri Ch4 , Neoclassical Consumer Theory, and Exchange General Equilibrium. *--*
Advanced Microeconomics Petri Ch5, Neoclassical Theory of the Firm, and GE of Production and Exchange. *--*
Advanced Microeconomics Petri Ch6, Uniqueness and Stability of Atemporal Acapitalistic GE. *--* .
Advanced Microeconomics Petri Ch7, Long-Period General Equilibrium, and Reswitching. *--*
Advanced Microeconomics Petri Ch8, Intertemporal and Temporary General Equilibrium (new version) *--*
Advanced Microeconomics Petri Ch9PartFirst Uncertainty and Insurance. *--*
Advanced Microeconomics Petri References - Very Incomplete
books  courses  paper  website  economic_theory  intellectual_history  18thC  19thC  20thC  Physiocrats  Smith  Ricardo  Marx  Sraffa  classical_economics  marginalists  capital  profit  investment  Labor_markets  wages  heterodox_economics  downloaded  EF-add 
february 2014 by dunnettreader
Elisabet Garriga and Domènec Melé - Corporate Social Responsibility Theories: Mapping the Territory | JSTOR: Journal of Business Ethics, Vol. 53, No. 1/2 (Aug., 2004), pp. 51-71
The Corporate Social Responsibility (CSR) field presents not only a landscape of theories but also a proliferation of approaches, which are controversial, complex and unclear. This article tries to clarify the situation, "mapping the territory" by classifying the main CSR theories and related approaches in four groups: (1) instrumental theories, in which the corporation is seen as only an instrument for wealth creation, and its social activities are only a means to achieve economic results; (2) political theories, which concern themselves with the power of corporations in society and a responsible use of this power in the political arena; (3) integrative theories, in which the corporation is focused on the satisfaction of social demands; and (4) ethical theories, based on ethical responsibilities of corporations to society. In practice, each CSR theory presents four dimensions related to profits, political performance, social demands and ethical values. The findings suggest the necessity to develop a new theory on the business and society relationship, which should integrate these four dimensions. -- see bibliography on jstor information page -- didn't download -- cited by more than 40 on jstor
article  jstor  social_theory  business  business-and-politics  CSR  corporate_governance  capitalism  ethics  busisness-ethics  externalities  profit  civil_society  lit_survey  bibliography  EF-add 
february 2014 by dunnettreader
Valuing Private Equity - Morten Sorensen, Neng Wang, Jinqiang Yang | NBER Nov 2013
NBER Working Paper No. 19612
Issued in November 2013 -- downloaded pdf to Note

We investigate whether the performance of Private Equity (PE) investments is sufficient to compensate investors (LPs) for risk, long-term illiquidity, management and incentive fees charged by the general partner (GP). We analyze the LP's portfolio-choice problem and find that management fees, carried interest and illiquidity are costly, and GPs must generate substantial alpha to compensate LPs for bearing these costs. Debt is cheap and reduces these costs, potentially explaining the high leverage of buyout transactions. Conventional interpretations of PE performance measures appear optimistic. On average, LPs may just break even, net of management fees, carry, risk, and costs of illiquidity.
financial_system  financial_innovation  finance_capital  investment  risk  profit  equity  Innovation  corporate_finance  leverage  downloaded  EF-add 
november 2013 by dunnettreader
Marco Nappolini - Secular stagnation and post-scarcity | Pieria Nov 2013
The charts above illustrate that the overall picture is clearly one of falling long-term interest rates. As the authors say:

“[The] importance of monetary policy for long real rates appears to have diminished since the late 1990s… This is consistent with evidence that monetary policy has become more synchronised across countries, leaving less room for national real interest rates to diverge.”

This is what you would expect to see in a post-scarcity economy, though it is not to say that there are no projects that can deliver a real return on investment. Rather under post-scarcity conditions firms cannot have confidence in the existence of a market that can absorb all of their goods or services – so the risk adjustment of expected returns has to be larger. As such in order to get firms to part with their capital you would need to either set strongly negative nominal rates to force corporates into action or expand fiscal policy sufficiently to make it bear the investment risk that the private sector is refusing to take on. If Summers is right, however, it remains unclear whether even these measures would be sufficient to break developed economies out of secular stagnation.
global_economy  stagnation  consumer_demand  investment  profit  risk  interest_rates  monetary_policy  EF-add 
november 2013 by dunnettreader
Daniel Little Why the corporation? « Understanding Society Sept 2012
Recently I posted about C. Wright Mills and his analysis of power elites in America (post). A major theme in Mills’s book is the new power associated with the American corporation following World War II. Charles Perrow’s Organizing America: Wealth, Power, and the Origins of Corporate Capitalism (2002) offers an historical account of how this system of power came into being. Perrow is a historical sociologist, and he focuses his analysis on the structural features of the organizations he considers; the historical and social factors that favored the emergence of these kinds of organizations; and the role that they now play within the complex social and political system of modern America.
books  kindle-available  reviews  economic_history  social_history  US_economy  US_politics  US_history  19thC  20thC  business  corporate_governance  corporate_finance  capitalism  capital  firms-theory  organizations  profit  infrastructure  historical_sociology  political_economy  EF-add 
november 2013 by dunnettreader
G. William Domhoff - Power at the Local Level: Growth Coalition Theory | Who Rules America
Theory of local "growth coalitions" and history of urban policy and public administration institutions growing out of Good Government battles against Democratic Party machines and Socialists. Rockefeller Foundation and University of Chicago building nationwide urban policy network of thinktanks through Progressive and New Deal era. Electoral and managerial "reforms" (off yr & nonpartisan elections, citywide councils w/ no or minimal pay), city managers) that defanged threats from immigrant, Negro & Socialist politicians, foreclosed working class participation in governing bodies etc.

The idea that the heart of a local power structure is provided by those businesses concerned with local real estate values explains what had been considered a perplexing issue in what was once called the "community power literature:" the relative absence of industrial executives as top leaders within the city..... manufacturers usually are not concerned with land values unless they are also big landowners as well. Their focus is on making profits through the sale of products in regional, national, and international markets. For an industrialist, any given locality is merely a site for production that can be abandoned with a fair amount of ease if it becomes too costly, .... Their power is not in their involvement in local government but in their ability to move, which ... creates an underlying tension between the two sets of interests.

Since a great many specific government decisions can affect land values and growth potentialities, leaders of the growth coalition are prime participants in local government. Their involvement is even greater than that of corporate capitalists at the national level, where the power elite can rely to some extent on such "signals" as stock prices, interest rates, and the level of new investments to tell government officials what they think of current policies.

Due to the separation of local, state, and national government in the United States, the wily members of the local growth coalition are able to have it both ways. At the state and national levels they support those politicians who oppose, in the name of fiscal and monetary responsibility, the kinds of government policies that might create more jobs, whereas at the local level they talk in terms of their attempts to create more jobs. Their goal is never profits, but only jobs.
19thC  20thC  US_history  urban  urbanization  political_history  political_press  politics-and-money  urban_politics  US_economy  US_politics  political_economy  political_culture  local_government  business  elites  networks  investment  profit  property  Labor_markets  conservatism  lobbying  landowners  economic_growth  off-shoring  urban_development  suburbs  parties  elections  Great_Depression  US_politics-race  EF-add 
november 2013 by dunnettreader
BPEA Fall 2013: Offshoring Linked to Declining U.S. Labor Share, Likely to Continue
A Fall 2013 BPEA paper by Michael Elsby, Bart Hobijn, and Aysegul Sahin --
Manufacturing and trade sectors causing most recent drops; ACA could drive further declines -- The authors note that if globalization continues apace, the labor share will most likely continue to decline, especially in sectors that face the largest increases in foreign competition. -- They also point to the public policy implications of the labor share, writing that in addition to the fact that developments in certain industries affect the aggregate labor share, particular types of legislation -- such as the Affordable Care Act -- are also likely to drive movements in the near future. “Since health insurance benefits are part of payroll compensation, a change in the prevalence of these benefits that is not offset by changes in wages and salaries will affect the labor share.”
paper  20thC  21stC  US_economy  globalization  international_political_economy  Labor_markets  wages  EF-add  off-shoring  health_care  profit  capital 
september 2013 by dunnettreader
John Berdell: Interdependence and independence in Cantillon's Essai (2009) | T & F Online
The European Journal of the History of Economic Thought, Volume 16, Issue 2, 2009, pages 221- 249, Available online: 18 Jun 2009, DOI: 10.1080/09672560902890988 -- paywall -- Cantillon's contribution to economic thought is widely understood to lie in his systematic examination of economic interconnectedness. The model developed here brings profits fully into price determination, casts additional light on Cantillon's treatment of distribution, and provides the first extended analysis of the policy recommendations found in part one of his Essai. These anti-urban policies are examined in relation to French urbanization and William Petty's analysis of Irish economic development.Entrepreneurial risk-bearing is central to the Essai and this model, yet for Cantillon landlord tastes determine the economy's equilibrium position. This view is mirrored in his treatment of class mobility: only by becoming landed proprietors can entrepreneurs escape dependence and become independent or autonomous determiners of society. Indeed, social mobility actually accounts for the ‘independence’ of the landed proprietors as a group. Rent's special role stems not so much from the nature of land or agriculture – as Physiocracy would emphasize – as from the nature of the social forces determining its ownership.Keywords: : Cantillon , classical economics , income distribution , Petty , demography
article  paywall  economic_history  economic_theory  intellectual_history  18thC  France  Britain  Ireland  Cantillon  Petty_William  landowners  mobility  status  social_order  elites  urbanization  demography  entrepreneurs  landed_interest  profit  distribution-income  EF-add 
september 2013 by dunnettreader
Guillaume Daudin: Profitability of Slave and Long-Distance Trading in Context: The Case of Eighteenth-Century France (2004)
JSTOR: The Journal of Economic History, Vol. 64, No. 1 (Mar., 2004), pp. 144-171 -- This article studies slave and other long-distance trades in eighteenth-century France. The data cover 238 ventures from seven French harbors between 1710 and 1780. Using the undiscounted benefit-cost ratio as a proxy for the internal rate of return, the article shows that these investments were more liquid, shorter, and more profitable than private notarized credit, without higher risk. They were safer and had a shorter duration than government bonds, without being less liquid or less profitable. The conclusion, that investment in these trades was preferable to domestic alternatives, may be explained by barriers to entry. -- lots of bibliography for 18thC French economic history as well as slave trade. Notes that France in 1780 was the biggest long distance trader - bigger than Britain.
article  jstor  economic_history  18thC  France  trade  investment  profit  capital_markets  sovereign_debt  bibliography  EF-add 
september 2013 by dunnettreader
Robert Brenner: What is Good for Goldman Sachs is Good for America - The Origins of the Present Crisis [eScholarship] October 2009
Robert Brenner outlines the long-term causes of the present economic crisis. Rather than understanding the current downturn as merely a function of financial incompetence and miscalculation, he demonstrates that the US economy and that of the G7 has been slower growth in most of the major indices with each passing business cycle since the 1970s. In the last two cycles, asset bubbles inclined US consumers to take on more debt in order to spend and achieve limited GDP growth. Brenner outlines in detail how and why the financial sector played a key role in the creation and inflation of debt bubbles with new financial instruments. The implications for the US and the global economy are also outlined including the US current account deficit, trade imbalances, the rise of China and the East Asian economies as well as declining investment in the real economy and overcapacity in manufacturing worldwide.

Downloaded pdf to Note
economic_history  financialization  international_finance  international_political_economy  capitalism  investment  profit  Labor_markets  Great_Recession  banking  FX  competition  bubbles  financial_crisis  emerging_markets  China  downloaded  EF-add 
august 2013 by dunnettreader
Floyd Norris: U.S. Companies Thrive as Workers Fall Behind - NYTimes.com August 2013
The major change in the latest comprehensive revision of the national income and product accounts — known as NIPA to statistics aficionados — is to treat research and development spending as an investment, similar to the way the purchase of a new machine tool would be treated by a manufacturer, rather than as an expense.

See page of charts
US_economy  economic_history  20thC  21stC  Great_Recession  profit  Labor_markets  inequality  investment 
august 2013 by dunnettreader
Wesley Phoa, Sergio M. Focardi and Frank J. Fabozzi: How Do Conflicting Theories about Financial Markets Coexist?
JSTOR: Journal of Post Keynesian Economics, Vol. 29, No. 3 (Spring, 2007), pp. 363-391

There are many conflicting interpretations of security prices and price determination in financial markets. They range from academic theories based on efficient markets and rational expectations hypotheses, to more traditional methods of fundamental analysis, to theories of "value" and "growth" investing, to chart-reading and technical analysis, to notions such as "reflexivity." These interpretations are logically inconsistent with each other, but they seem to coexist, sometimes even on the same trading desk. In this paper, we seek to formulate an explanation for this strange coexistence, using some tools from critical theory to understand how financial markets operate. Structuralism is used to analyze various kinds of narratives appearing in the financial literature, which are intended to have explanatory force, and appearance of sometimes contradictory elements in such narratives; poststructuralism is used to explain the way in which contradictory interpretations coexist. We discuss some practical implications for security valuation, option valuation, trading strategies, market risk management, and volatility estimation.

Downloaded pdf to Note
article  economic_models  financial_system  capital_markets  social_theory  methodology  structuralist  postmodern  narrative  risk  profit  downloaded  EF-add 
august 2013 by dunnettreader
Ingrid H. Rima: From profit margins to income distribution: Joan Robinson's odyssey from marginal productivity theory |  T & F Online
Volume 15, Issue 4, 2003, pages 575- 586
Available online: 03 Jun 2010
DOI: 10.1080/0953825032000121496

The point of departure for this paper is a 1941 Note on profit margins co-authored by Joan Robinson and Nicholas Kaldor that remained unpublished until 2000. Robinson's reviews of Henry Clay's The Problem of Industrial Relationships, Bresciani Turroni's The Economics of Inflation, and Roy Harrod's Towards a Dynamic Economics, along with her 1965 Cambridge Inaugural Lecture, may be interpreted as analogous documents that develop her critique of neoclassical wage theory and identify the money wage as the economy's ‘key’ price. These publications were critical steps toward the wage mark-up hypothesis and Post-Keynesian support of incomes policy to contain inflation. Robinson's Harrod review anticipated her later ideas about economic growth. With Kalecki's notion of ‘the degree of monopoly’ and her own concept of neo-mercantilism (from the Inaugural Lecture), these themes are nascent in the Robinson–Kaldor Note on profit margins.

Downloaded pdf to Note
economic_models  20thC  Joan_Robinson  Keynesianism  Labor_markets  macroeconomics  economic_growth  profit  inflation  fiscal_policy  downloaded  EF-add 
august 2013 by dunnettreader

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