Political Economy and the New Capitalism: Essays in Honour of Sam Aaronovitch/ Edited by Jan Toporowski
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Political Economy and the New Capitalism Political Economy and the New Capitalism examines key developments in capitalist economies at the end of the twentieth century and brings together essays by leading economists in honour of the late Sam Aaronovitch, the veteran left- wing economist. In his work, Sam Aaronovitch emphasized the need to take into account the most recent developments in capitalist economies. In this spirit the essays in this volume focus on key issues raised by contemporary trends, including: how the apparent triumph of capitalism reflects on Marxism, the role of the collapse of Communism in undermining the post-war Keynesian settlement, and the relevance of Keynesianism to contemporary capitalism. Political Economy and the New Capitalism also examines the relevance of Sam Aaronovitch’s pioneering empirical studies of British capitalism in the light of modern developments. A wide range of problems are reviewed from industrial concentration today to the co-ordination of economic policies in Europe. Aaronovitch’s work on the role of finance in the British economy is the subject of sustained reflection. Individual chapters examine orthodox and left-wing criticisms of finance, exchange rate instability, and employment, growth and regions in the context of European Union. This work concludes with a bibliography of the published writings of Sam Aaronovitch. This volume collects the reflections of some of the most distinguished thinkers in economics today including: Meghnad Desai, G.C.Harcourt, Pat Devine, Egon Matzner, Malcolm Sawyer, Sir Alan Budd, Jan Toporowski, Philip Arestis, Eleni Paliginis, Victoria Chick and Ben Fine. Political Economy and the New Capitalism provides a vital and critical survey of key issues in political economy at the end of the twentieth century and will be of interest to students and researchers in political economy, the British and European economies, international, financial and industrial economics. Jan Toporowski is Reader in Economics, South Bank University and is the author of several works including, The End of Finance: The Theory of Capital Market Inflation, Financial Derivatives and Pension Fund Capitalism (Routledge 1999). Routledge Frontiers of Political Economy 1 Equilibrium Versus Understanding Specialisation and prosperity in small open Towards the rehumanization of economics economies within social theory Peter Maskell, Heikki Esdelinen, Ingjaldur Mark Addleson Hannibalsson, Anders Malmberg and Eirik Vatne 2 Evolution, Order and Complexity 15 Labour Market Theory Edited by Elias L.Khalil and Kenneth E.Boulding A constructive reassessment 3 Interactions in Political Economy Ben J.Fine Malvern after ten years 16 Women and European Employment Edited by Steven Pressman Jill Rubery, Mark Smith, Colette Fagan, Damian 4 The End of Economics Grimshaw Michael Perelman 17 Explorations in Economic Methodology 5 Probability in Economics From Lakatos to empirical philosophy of Omar F.Hamouda and Robin Rowley science Roger Backhouse 6 Capital Controversy, Post Keynesian Economics and the History of Economics 18 Subjectivity in Political Economy Essays in honour of Geoff Harcourt, vol. one Essays on wanting and choosing Edited by Philip Arestis, Gabriel Palma and David P.Levine Malcolm Sawyer 19 The Political Economy of Middle East 7 Markets, Unemployment and Economic Peace Policy The impact of competing trade agendas Essays in honour of Geoff Harcourt, vol. two Edited by J.W.Wright, Jnr Edited by Philip Arestis, Gabriel Palma and 20 The Active Consumer Malcolm Sawyer Novelty and surprise in consumer choice 8 Social Economy Edited by Marina Bianchi The logic of capitalist development 21 Subjectivism and Economic Analysis Clark Everling Essays in memory of Ludwig Lachmann 9 New Keynesian Economics/Post Edited by Roger Koppl and Gary Mongiovi Keynesian Alternatives 22 Themes in Post Keynesian Economics Edited by Roy J.Rotheim Essays in honour of Geoff Harcourt, vol. 10 The Representative Agent in three Macroeconomics Edited by Peter Kriesler and Claudio Sardoni James E.Hartley 23 The Dynamics of Technological 11 Borderlands of Economics Knowledge Essays in honour of Daniel R.Fusfeld Cristiano Antonelli Edited by Nahid Aslanbeigui and Young Back Choi 24 The Political Economy of Diet, Health 12 Value, Distribution and Capital and Food Policy Essays in honour of Pierangelo Garegnani Ben J.Fine Edited by Gary Mongiovi and Fabio Petri 25 The End of Finance 13 The Economics of Science 3 The theory of capital market inflation, financial derivatives and pension fund Methodology and Epistemology as if capitalism Economics Really Mattered Jan Toporowski James R.Wible 26 Political Economy and the New 14 Competitiveness, Localised Learning Capitalism and Regional Development Essays in honour of Sam Aaronovitch Edited by Jan Toporowski Political Economy and the New Capitalism Essays in honour of Sam Aaronovitch Edited by Jan Toporowski London and New York First published 2000 by Routledge 11 New Fetter Lane, London EC4P 4EE Simultaneously published in the USA and Canada by Routledge 29 West 35th Street, New York, NY 10001 Routledge is an imprint of the Taylor & Francis Group This edition published in the Taylor & Francis e-Library, 2002. © 2000 Jan Toporowski All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging-in-Publication Data Political economy and the new capitalism: essays in honour of Sam Aaronovitch/ edited by Jan Toporowski. p. cm. (Routledge frontiers of political economy; 26) 1. Capitalism. I. Aaronovitch, Sam. II. Toporowski, Jan. III. Series. HB501.P627 1999 330.12’2 dc21 99–22500 CIP ISBN 0-415-20221-3 (Print Edition) ISBN 0-203-78545-5 Master e-book ISBN ISBN 0-203-67786-X (Glassbook Format) Contents List of figures vii List of tables viii List of contributors ix Introduction xi PART I Economic policy and the nature of contemporary capitalism 1 1 Rejuvenated capitalism and no longer existing socialism: a classical Marxist explanation 3 MEGHNAD DESAI 2 Contemporary capitalism and Keynes’s General Theory 15 G.C.HARCOURT 3 The ‘Conflict Theory of Inflation’ re-visited 23 PAT DEVI N E 4 The fall of the wall: a socio-economic interpretation of the end of systems competition 40 EGON MATZNER PART I I Aspects of the New Capitalism 63 5 ‘Big Business’: (almost) twenty-five years on 65 MALCOLM SAWYER 6 Military expenditure and globalization 76 RON SMITH vi Contents 7 Co-operation, coercion and autonomy in the contest for European unity 87 JÖRG HUFFSCHMID 8 Unequal exchange re-visited 99 PAUL LEVINE 9 The agrarian question in an age of ‘New Capitalism’ 114 A.HAROON AKRAM-LODHI PART I II Finance and the New Capitalism 133 10 Two views of the City 135 ALAN BUDD 11 Profits and exchange rate instability in a capitalist world 146 JAN TOPOROWSKI 12 Globalization, regionalism and national economic policies 153 PHILIP ARESTIS AND ELENI PALIGINIS 13 Big banks, small business and the regions in bankers’ Europe 167 VICTORIA CHICK 14 ESOP’s fable: golden egg or sour grapes? 179 BEN FINE A bibliography of the writings of Sam Aaronovitch 194 JAN TOPOROWSKI Index 196 Figures 8.1 Changing shares of World GDP 100 8.2 Phases of development 109 8.3 World growth and development 110 8.4 Aid which benefits everyone 111 10.1 The UK’s share of exports of manufactures 144 12.1 Outward Foreign Direct Investments (FDI), 1967–95 155 12.2 Total net capital inflows: emerging economies 156 Tables 3.1 United Kingdom 1961–96: selected economic indicators 31 3.2 UK, EU15, USA and Japan, 1961–90: selected economic indicators 34 4.1 Pay-off matrix in a simple prisoners’ dilemma game 50 8.1 Western and Japanese trade with Asia 103 8.2 Innovation performance 107 9.1 The top 10 agro-food transnational, ranked by foreign assets 120 9.2 Global agricultural trade 121 9.3 Global food trade by region, 1994 121 9.4 Agricultural productivity 124 9.5 Global agricultural production and structure 124 9.6 Global agricultural inputs 125 13.1 Participation by country in bank mergers and acquisitions, 1981–9 171 13.2 Size distribution of majority acquisitions (including mergers) in banking, 1986–7 to 1991–2 172 13.3 Distribution of majority acquisitions and mergers in banking, by size of bid-value, 1992–3 173 13.4 Acquisitions of majority holdings (including mergers), minority holdings and joint ventures in banking involving EU banks, 1986–7 to 1991–2 173 13.5 Country analysis of mergers, 1990–7 174 13.6 Numbers of banks in European Top 500: 1996 and 1990 compared 177 Contributors A.Haroon Akram-Lodhi teaches rural development at the Institute of Social Studies in The Hague, The Netherlands. Philip Arestis is Professor of Economics at the University of East London. Alan Budd is Provost of The Queen’s College, Oxford. Victoria Chick is Professor of Economics at University College London. Meghnad Desai is director of the Centre for the Study of Global Governance at the London School of Economics and Political Science. Pat Devine is Senior Lecturer in Economics at the University of Manchester. Ben Fine is Professor of Economics and Director of the Centre for Economic Policy for South Africa at the School of Oriental and African Studies, London University. G.C.Harcourt is Emeritus Reader in the History of Economic Theory, University of Cambridge, Emeritus Fellow, Jesus College, Cambridge, and Professor Emeritus, University of Adelaide. Jörg Huffschmid is Professor of Political Economy and Economic Policy at the University of Bremen. Paul Levine is Foundation Fund Professor of Economics at the University of Surrey.