Distribution and accumulation in post-1980 advanced capitalism

22/10/2012 § Leave a comment

The paper tries to build a framework of the interconnections between income distribution and accumulation for the years after 1980. On the basis of this framework it is argued that it was primarily the weakening of the inducements to invest that improved the attractiveness of financial investments, rather than the other way round. The overall effect on investment of financial sector enlargement was negative, but for the reason that it contributed to bring about a change in income distribution unfavourable to the expansion of demand, while permitting only a temporary disconnection of demand from the distributive change. The reader’s attention is then drawn to the element of continuity that can be detected between the current European economic policy of austerity and the process of substitution of loans for wages experienced by a large section of advanced capitalism up to the 2007 crisis. The article concludes on the question of long-run social stability within advanced capitalism.pdf

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An ‘unproductive labour’ view of finance

17/10/2012 § Leave a comment

I confess to an uneasy Physiocratic suspicion, perhaps unbecoming in an academic, that we are throwing more and more of our resources, including the cream of our youth, into financial activities remote from the production of goods and services, into activities that generate high private rewards disproportionate to their social productivity. I fear that, as Keynes saw even in his day, the advantages of the liquidity and negotiability of financial instruments come at the cost of facilitating nth-degree speculation which is short sighted and inefficient (J.Tobin)

The present paper discusses the role of the financial sector in a capitalist economy, arguing that the huge increase in its weight (economic and otherwise) in the last decades is not justified by the importance of its contribution to economic growth. The point is developed going back to the classical concepts of productive and unproductive labour. pdf

Financial reform

16/10/2012 § Leave a comment

Walter Bagehot states that ‘the briefest and truest way of describing Lombard Street is to say that it is the greatest combination of economical power and economical delicacy the world has ever seen’. The greatness of the delicacy is easy to understand. From a laissez-faire position, any proposal to make the management of such economical power an exception to the general rule that competition should be free from any government intervention is hard to swallow. Yet few would mantain that the financial market is a market like any other. Differences of opinion about financial reform mainly depend on the different reasons on which this position is based. pdf

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