Capital As Process and the History of Capitalism
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Determinants of Financial Capital Use Review of Theories and Implications for Rural Businesses
No. 19, February 2012 Jarmila Curtiss Determinants of Financial Capital Use Review of theories and implications for rural businesses ABSTRACT This paper presents a review of financial economics literature and offers a comprehensive discussion and systematisation of determinants of financial capital use. In congruence with modern financial literature, it is acknowledged here that real and financial capital decisions are interdependent. While the fundamental role of the (unconstrained) demand for real capital in the demand for finance is acknowledged, the deliverable focuses on three complementary categories of the determinants of financial capital use: i) capital market imperfections; ii) factors mitigating these imperfections or their impacts; and iii) firm- and sector-related factors, which alter the severity of financial constraints and their effects. To address the question of the optimal choice of financial instruments, theories of firm capital structure are reviewed. The deliverable concludes with theory-derived implications for agricultural and non-agricultural rural business’ finance. FACTOR MARKETS Working Papers present work being conducted within the FACTOR MARKETS research project, which analyses and compares the functioning of factor markets for agriculture in the member states, candidate countries and the EU as a whole, with a view to stimulating reactions from other experts in the field. See the back cover for more information on the project. Unless otherwise indicated, the views expressed are attributable only to the authors -
Capitalist Crisis and the Rise of Monetarism
CAPITALIST CRISIS AND THE RISE OF MONETARISM Simon Clarke What is the significance of 'monetarism' for an understanding of the relationship between the economy and the capitalist state? Before we can address the question we have to try to define 'monetarism'. In the strictest sense 'monetarism' refers to the advocacy of the quantity theory of money and a policy preoccupation with the growth of the money supply. In this sense monetarism expresses a pre-Keynesian ortho- doxy, that has been perpetuated by a few cranks and that inexplicably grabbed the hearts and minds of economists and politicians for the best part of a decade, between 1975 and 1985. This is the view that has tended to be taken by economists who remain committed to a Keynesian analysis. For these economists monetarism was a combination of huckstering and collective madness that led to mistaken economic policies. The response to monetarism was to keep faith and wait until normal sanity was resumed. Such a view has apparently now been vindicated by the almost universal abandonment of this kind of monetarist orthodoxy, although elements of its rhetoric remain. This is to take much too narrow a view of monetarism. Although this narrow monetarism has been utterly discredited, and the money supply no longer has the fetishistic significance that it briefly enjoyed, the broader contours of the politics and ideology of monetarism remain with us, and have been assimilated by many of those of a Keynesian persuasion. This politics and ideology relates not so much to the narrow technical issues of monetary policy and the control of the money supply as to the broader questions of the relations between the state and the economy. -
Inside Money, Business Cycle, and Bank Capital Requirements
Inside Money, Business Cycle, and Bank Capital Requirements Jaevin Park∗y April 13, 2018 Abstract A search theoretical model is constructed to study bank capital requirements in a respect of inside money. In the model bank liabilities, backed by bank assets, are useful for exchange, while bank capital is not. When the supply of bank liabilities is not sufficiently large for the trading demand, banks do not issue bank capital in competitive equilibrium. This equilibrium allocation can be suboptimal when the bank assets are exposed to the aggregate risk. Specifically, a pecuniary externality is generated because banks do not internalize the impact of issuing inside money on the asset prices in general equilibrium. Imposing a pro-cyclical capital requirement can improve the welfare by raising the price of bank assets in both states. Key Words: constrained inefficiency, pecuniary externality, limited commitment JEL Codes: E42, E58 ∗Department of Economics, The University of Mississippi. E-mail: [email protected] yI am greatly indebted to Stephen Williamson for his continuous support and guidance. I am thankful to John Conlon for his dedicated advice on this paper. This paper has also benefited from the comments of Gaetano Antinolfi, Costas Azariadis and participants at Board of Governors of the Federal Reserve System, Korean Development Institute, The University of Mississippi, Washington University in St. Louis, and 2015 Mid-West Macro Conference at Purdue University. All errors are mine. 1 1 Introduction Why do we need to impose capital requirements to banks? If needed, should it be pro- cyclical or counter-cyclical? A conventional rationale for bank capital requirements is based on deposit insurance: Banks tend to take too much risk under this safety net, so bank capital requirements are needed to correct the moral hazard problem created by deposit insurance. -
UC Riverside Cliodynamics
UC Riverside Cliodynamics Title Capitalist Systems are Societal Constructs: Not “Clouds” or “Clocks,” but “City States”: A Review of Does Capitalism Have a Future? by Immanuel Wallerstein, Randall Collins, Michael Mann, Georgi Derluguian, and Craig Calhoun (Oxford University Press,... Permalink https://escholarship.org/uc/item/7z63z6jt Journal Cliodynamics, 6(2) Author Scott, Bruce Publication Date 2015 DOI 10.21237/C7clio6229140 License https://creativecommons.org/licenses/by/4.0/ 4.0 eScholarship.org Powered by the California Digital Library University of California Cliodynamics: The Journal of Quantitative History and Cultural Evolution Capitalist Systems are Societal Constructs: Not “Clouds” or “Clocks,” but “City States” A Review of Does Capitalism Have a Future? by Immanuel Wallerstein, Randall Collins, Michael Mann, Georgi Derluguian, and Craig Calhoun (Oxford University Press, 2013) Bruce Scott Harvard University Does Capitalism Have a Future? is the work of five distinguished senior authors addressing the future of capitalism and its recent past. Their book warns that “something big looms on the horizon: a structural crisis much bigger than the recent great recession. Over the next three or four decades, capitalists of the world may simply find it impossible to make their usual investment decisions due to overcrowding of world markets and inadequate accounting for rising social costs. In this situation, capitalism would end in the frustration of the capitalists themselves.” The authors have chosen a very broad and important topic -
Modern Monetary Theory: a Marxist Critique
Class, Race and Corporate Power Volume 7 Issue 1 Article 1 2019 Modern Monetary Theory: A Marxist Critique Michael Roberts [email protected] Follow this and additional works at: https://digitalcommons.fiu.edu/classracecorporatepower Part of the Economics Commons Recommended Citation Roberts, Michael (2019) "Modern Monetary Theory: A Marxist Critique," Class, Race and Corporate Power: Vol. 7 : Iss. 1 , Article 1. DOI: 10.25148/CRCP.7.1.008316 Available at: https://digitalcommons.fiu.edu/classracecorporatepower/vol7/iss1/1 This work is brought to you for free and open access by the College of Arts, Sciences & Education at FIU Digital Commons. It has been accepted for inclusion in Class, Race and Corporate Power by an authorized administrator of FIU Digital Commons. For more information, please contact [email protected]. Modern Monetary Theory: A Marxist Critique Abstract Compiled from a series of blog posts which can be found at "The Next Recession." Modern monetary theory (MMT) has become flavor of the time among many leftist economic views in recent years. MMT has some traction in the left as it appears to offer theoretical support for policies of fiscal spending funded yb central bank money and running up budget deficits and public debt without earf of crises – and thus backing policies of government spending on infrastructure projects, job creation and industry in direct contrast to neoliberal mainstream policies of austerity and minimal government intervention. Here I will offer my view on the worth of MMT and its policy implications for the labor movement. First, I’ll try and give broad outline to bring out the similarities and difference with Marx’s monetary theory. -
The Critique of Real Abstraction: from the Critical Theory of Society to the Critique of Political Economy and Back Again
The Critique of Real Abstraction: from the Critical Theory of Society to the Critique of Political Economy and Back Again Chris O’Kane John Jay, CUNY [email protected] There has been a renewed engagement with the idea of real abstraction in recent years. Scholars associated with the New Reading of Marx, such as Moishe Postone, Chris Arthur, Michael Heinrich, Patrick Murray, Riccardo Bellofiore and others,1 have employed the idea in their important reconstructions of Marx’s critique of political economy. Alberto Toscano, Endnotes, Jason W. Moore and others have utilized and extended these theorizations to concieve of race, gender, and nature as real abstractions. Both the New Reading and these new theories of real abstraction have provided invaluable work; the former in systematizing Marx’s inconsistent and unfinished theory of value as a theory of the abstract social domination of capital accumulation and reproduction; the latter in supplementing such a theory. Yet their exclusive focus on real abstraction in relation to the critique of political economy means that the critical marxian theories of real abstraction -- developed by Alfred Sohn- Rethel, Theodor W. Adorno and Henri Lefebvre -- have been mostly bypassed by the latter and have largely served as the object of trenchant criticism for their insufficient grasp of Marx’s theory of value by the former. Consequently these new readings and new theories of real abstraction elide important aspects of Sohn-Rethel, Adorno and Lefebvre’s critiques of real abstraction; which sought to develop Marx’s critique of political economy into objective-subjective critical theories of the reproduction of capitalist society.2 However, two recent works by 1 Moishe Postone’s interpretation of real abstraction will be discussed below. -
John Jay College City University of New York Econ 213: Political Economy Spring2020
John Jay College City University of New York Econ 213: Political Economy Spring2020 Instructor: Ian J. Seda-Irizarry, Ph.D. Email: [email protected] Office: 9.63.10 NB Office Telephone: 212-393-6425 Office Hours: Tu-Th: 2:00-3:00 pm or by appointment A) Overview: This course exposes students to one of the most sophisticated, yet misunderstood and marginalized, theories of social science. Focus will be on the contributions of the thinker who, perhaps better than anybody else, appropriated and critiqued a whole tradition of socio-economic analysis, which included thinkers such as William Petty, Francois Quesnay, Adam Smith, David Ricardo, Thomas Malthus, and John Stuart Mill. We are referring to Karl Marx. Marx is one of those figures from the history of thought whose contributions had been considered by many as redundant, inconsistent, simply outdated, and even dangerous. Still, his thought has ferociously knocked at the door once again in the face of capitalisms’ problems. The purpose of this course is to directly read Marx’s mature theorizations about how capital works to hopefully get a grasp of an understanding of capitalism as a system which suffers from recurrent crises, instabilities, business cycles and uneven development — all of them characteristics that mainstream economic theory tends to consider as secondary compared to the harmonious arrangement that is said to prevail in a market economy that is supposed to deliver the goods while providing the basis for a democratic political system. In this class we will mainly focus on Marx’s magnum opus, Volume 1 of Capital, and we will also read some excerpts from Volumes 2 and 3. -
Economics (ECON) 1
Economics (ECON) 1 ECON 301. Intermediate Macroeconomics. 1 Unit. Economics (ECON) An in-depth study of macroeconomic theoretical issues concerning the long run economic growth and short run business cycles. Focus Courses on such key variables as output/income, unemployment, price level/ inflation, interest rate, exchange rate, and the interactions among ECON 103S. Essentials of Economics I. 1 Unit. them. Topics include Solow growth model, endogenous growth An analysis of the economic problem of scarcity. The course focuses model, goods market equilibrium, financial market equilibrium, labor on solving these economic problems from the perspective of individual market equilibrium, IS-LM/AD-AS model, and fiscal/monetary policies. economic agents, and on the economy as a whole from an aggregate Prerequisites: ECON 103S or ECON 104S and ECON 204S. Co- perspective, measuring and analyzing the interrelationships among requisite: ECON 380 or ECON 480. gross domestic product, unemployment, and inflation. Monetary and ECON 303. Money and Banking. 1 Unit. fiscal policies and their impact on economic growth and stability are Nature and function of money, the banking system, the Federal examined. Cannot also register for ECON 104S. Reserve System, and monetary policy. Prerequisite: ECON 103S or ECON 104S. Foundations of Economics I. 1 Unit. ECON 104S. Cross-listed as FINA 303. An introduction to economic concepts and tools used to address ECON 306. Humane Economics, Freedom, and Justice. 1 Unit. society's multidimensional economic problems and challenges, This course focuses on the conceptual foundations of freedom in including market imperfections. The course includes both traditional economics, including the notions of free individuals, free societies, economic models of efficient markets and contemporary approaches and personal responsibility. -
The Wrath of Capital: Neoliberalism and Climate Change Politics by Adrian Parr
Review: The Wrath of Capital: Neoliberalism and Climate Change Politics By Adrian Parr Reviewed by Ryder W. Miller San Francisco, California, USA Parr, Adrian. The Wrath of Capital: Neoliberalism and Climate Change Politics. New York, NY: Columbia University Press. 2012. 216pp. ISBN: 9780231158282. US$ 29.95 cloth, durable acid free paper. With its tangents and multiple subjects, a close reading is required to understand and follow The Wrath of Capital: Neoliberalism and Climate Change Politics by Adrian Parr, but it is worthwhile anyway. The author is an Associate Professor in the School of Architecture and Interior Design, The College of Arts and Sciences at the University of Cincinnati. She explores the impact of neoliberalism on the environment and defining it vaguely because it has different meanings to different people. It is also co- opted from the leftist term “liberal,” but recast in an economic framework to support such things as libertarianism and free market forces. Neoliberalism is defined by Parr as “an exclusive system premised upon the logic of property rights and the expansion of these rights, all the while maintaining that the free market is self-regulating, sufficiently and efficiently working to establish individual and collective well-being” (p. 5). Others have a more critical definition, like Wikipedia which posts that it “refers to economic liberalization, free trade and open markets, privatization, deregulation, and enhancing the role of the private sector in modern society.... The term neoliberal is now normally associated with laissez-faire economic policies, and is used mainly by those who are critical of legislative market reform.” Parr explores neoliberal forces on a variety of environmental issues (e.g. -
Small Business Access to Capital Survey Foreword
SMALL BUSINESS ACCESS TO CAPITAL SURVEY FOREWORD In the last four years, small businesses have struggled to find reasonable, affordable capital. According to NSBA data from as far back as 1993, there is a clear correlation to a small-business owner’s ability to hire and his/her ability to get financing. When small businesses can access adequate financing, they create jobs—an important footnote given the persistent economic challenges facing the U.S. In addition to our biannual Economic Reports, NSBA’s new Small Business Access to Capital Survey aims to address the issue by providing detailed insight on how small businesses utilize financing and how cash-flow issues impact their business. Amid all the noise about the importance of small business and claims that lending is improving—or was never really the issue—NSBA has continued to call for a better understanding of small-business lending and the support of policies that promote greater access to capital. The prospect of getting financed as a small business—even in a growing economy—is very difficult simply due to the fact that many small businesses lack the assets necessary for a traditional bank loan, making them a riskier lending option for banks. Unfortunately that challenge has only been exacerbated in recent years. According to the survey, nearly half (43 percent) of small-business respondents said that, in the last four years, they needed funds and were unable to find any willing sources, be it loans, credit cards or investors. This failure to secure financing has caused 32 percent to reduce their number of employees, 20 percent to reduce employee benefits and 17 percent were unable to meet existing demand. -
The Spectre of Monetarism
The Spectre of Monetarism Speech given by Mark Carney Governor of the Bank of England Roscoe Lecture Liverpool John Moores University 5 December 2016 I am grateful to Ben Nelson and Iain de Weymarn for their assistance in preparing these remarks, and to Phil Bunn, Daniel Durling, Alastair Firrell, Jennifer Nemeth, Alice Owen, James Oxley, Claire Chambers, Alice Pugh, Paul Robinson, Carlos Van Hombeeck, and Chris Yeates for background analysis and research. 1 All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx Real incomes falling for a decade. The legacy of a searing financial crisis weighing on confidence and growth. The very nature of work disrupted by a technological revolution. This was the middle of the 19th century. Liverpool was in the midst of a golden age; its Custom House was the national Exchequer’s biggest source of revenue. And Karl Marx was scribbling in the British Library, warning of a spectre haunting Europe, the spectre of communism. We meet today during the first lost decade since the 1860s. In the wake of a global financial crisis. And in the midst of a technological revolution that is once again changing the nature of work. Substitute Northern Rock for Overend Gurney; Uber and machine learning for the Spinning Jenny and the steam engine; and Twitter for the telegraph; and you have dynamics that echo those of 150 years ago. Then the villains were the capitalists. Should they today be the central bankers? Are their flights of fancy promoting stagnation and inequality? Does the spectre of monetarism haunt our economies?i These are serious charges, based on real anxieties. -
The Comparative Political Economy of Bank Privatization in Turkey
The Study of Post-1990s Bank Privatization in Turkey and Mexico: A Historical Materialist Intervention Paper Presentation Canadian Political Science Association 78th Annual Conference York University, Toronto, Ontario 2 June 2006 Thomas Marois PhD Candidate Department of Political Science York University CPSA 2006 Marois, Thomas The Study of Post-1990s Bank Privatization in Turkey and Mexico: A Historical Materialist Intervention Introduction Privatization and liberalization have been at the forefront of structural adjustment policies and processes since the 1980s debt crises while comparative inquiry has been trying to understand these changes. Across the board, everything state-owned became targeted for potential privatization, from productive industrial enterprises to public services to the financial and banking system, but not everything was privatized immediately. In this, the case of bank privatization is unique. Why is this and how do we understand it? Not only has bank privatization been initiated much later than most privatizations, but it has often been followed by degrees of re-nationalization due to bank failure. But post-1990s bank privatization is also unique and important because it represents the intersection of two vital aspects of the neoliberal shift from state-led to market-led capitalist development, namely privatization and financialization, which have manifested in a variety of forms. This intersection occurs simultaneously within the interrelated spheres of states and the world market, within which social relations of power are played out. Thus the question of how to study bank privatization is raised. The debates on bank privatization and how to understand it have been dominated by liberals and their main critics, institutionalists.