The business cycle of capitalism

In every business expansion the wage share declines because productivity rises faster than hourly wages. As a result, towards the end of expansion the limited wages and salaries cause an insufficient growth of consumer demand, which makes it difficult to realize profits. At the same time costs - including wage costs, material costs and interest costs - are rising, so it is difficult to produce at a profit. Therefore, at the peak of the cycle rising costs and insufficient demand squeeze profits as in a nutcracker, causing a fall in the expected rate of profit, which leads to a business contraction. In every business contraction the opposite trends tend to produce eventual recovery and a new expansion.     

The Organization of foreign trade under capitalism and socialism

We study the effectiveness of various ways of organizing foreign-trade activities utilized under capitalism and socialism. A normative theory of organization is developed based on the costs and benefits of processing and acting on information by the organization. We survey the forms of organization employed by large American firms, Japanese trading companies, and the socialist countries of Eastern Europe and evaluate their development on the basis of our normative theory. In all systems, there is a steady approach toward organizational forms that produce direct links between producers and international markets. Such ties, however, appear to create greater difficulties for socialist countries than for capitalist firms.     

The secular inflation term in open-economy Phillips curves

Robert Flood has compared three alternative specifications for the secular inflation term in an open-economy Phillips curve, attributed, respectively, to Buiter-Miller, and Frankel and Mussa. We point out (1) an arithmetic error, (2) the equivalence of the Frankel and Mussa versions, and (3) some arguments against the Buiter-Miller version.     

The spirit of capitalism, social status, money, and accumulation

This paper demonstrates the unambiguous existence of the Tobin portfolio-shift effect in the wealth-is-status and the spirit-of-capitalism models of growth. Namely, higher inflation leads to higher capital stock in the long run, and inflation increases the endogenous-growth rate of the economy.     

State capitalism and the rent-seeking conjecture

The notion that state capitalism (an economic system “in which the state functions as the leading economic actor and uses markets primarily for political gain”) is a new form of capitalism emerging in the global arena has been recently advanced by several authors. This paper explores the problem of the nature of this system in the light of these claims to novelty. What are its main features as described by these authors? Is state capitalism distinctive from other forms of capitalism or other types of economic systems? Are we really witnessing the emergence of a new type of economic system? To address such questions the paper starts by trying to place the model of state capitalism within the traditional comparative economic systems framework. The inconclusive result leads to a different approach in which the concept of rent-seeking society is used to underlie the structural similarities between mercantilism, real life socialism and state capitalism. The article argues that the conjecture that what has been labeled “state capitalism” is yet another form of rent-seeking system is both robust and worth further investigating.     

The Economic Contributions of Hyman Minsky: varieties of capitalism and institutional reform

The work of Hyman Minsky represents an important link between Post Keynesians and Institutionalists. This essay begins with a brief summary of Minsky's early work, including his well-known financial instability hypothesis and his policy proposals designed to reform the financial system. It then moves on to discuss other proposals that are less well known, and developed after the publication of his Stabilizing an Unstable Economy (1986) book. One of them in all the work of Minsky is his demand that theory be institution-specific. Because there are a variety of possible types of economies, theory must be appropriate to the specific economy under analysis. His analysis concerned an evolving, developed, big-government capitalist economy with complex and long-lived financial arrangements. His policy recommendations were designed to promote a successful, democratic form of capitalism given these financial arrangements. These policies would have to ‘constrain’ instability through creation of institutional ‘ceilings and floors’ while at the same time addressing the behavioral changes induced by reduction of instability. The policies would also have to promote rising living standards, expansion of democratic principles, and enhancement of security for the average household.     

Comparing the spread of capitalism and democracy

We apply Leeson and Dean’s (2009) method for studying democratic dominoes to capitalist spillovers to compare the rates at which capitalism and democracy spread between countries. We find that capitalism and democracy spread at approximately the same modest rate.     

创造性资本主义与资本主义的创造性消亡

资本主义具有一种内生的创造性,同时又具有一种内生的非创造性,创造性和非创造性悖论根源于资本主义经济的内在矛盾。随着世界市场的不断成熟和全球资本主义经济矛盾的不断加深,资本主义需要寻求新的自我拯救之道。创造性资本主义试图同时利用人性中的利己主义与利他主义。创造性资本主义预示着资本主义终将创造性地消亡,它对未来中国社会主义市场经济体制改革具有重要的启发意义。     

Infrastructural change and secular economic development

Long-term economic development is determined by changes to the infrastructure, especially material and non-material infrastructural networks that link agents in different locations. The infrastructure consists of the slowly changing, collective arena that supports production, exchange, and consumption, such as the built environment, transport networks, and institutions. In the short run the infrastructure can be regarded as fixed. Changes to the infrastructure are under normal conditions small enough to be disregarded by producers and consumers. With the creation of a critical link of a network, there will however be a revolutionary restructuring of the arena. Critical links are here defined as additions to infrastructural networks that create opportunities for new information and transport flows between previously unconnected regions. Such a revolutionary restructuring of infrastructural networks has been called a logistical revolution. Certain institutional pre-conditions are necessary for a logistical revolution, while the creation of a critical link is both a necessary and a sufficient condition. This paper discusses the three logistical revolutions that occurred in the 13th century, around 1600, and in the 19th century, which each had crucial similarities with the current “information revolution.”     

The demand for money in secular perspective: The case of Norway, 1867–1980

This paper presents some evidence from Norwegian data on some of the long-standing empirical issues of money demand. The choice of a scale variable and the issue of simultaneous equations bias is subjected to some recently developed statistical tests. The outcome favours a permanent income model of money demand. No significant simultaneity bias was detected. Various specifications of explanatory variables, like the own yield on money, interest rates and price expectations as well as the issues of price level homogeneity and stability between subperiods are also considered in the paper.     

合作社:从资本主义脱颖而出的生产模式

作为一种自治团体,合作社已有160余年的历史。在中国的社会主义建设和经济体制改革中,合作社始终并还将继续发挥无可替代的重要作用。然而,合作社在中国的发展还面临各种障碍的约束。重温马克思有关合作社的论述,可以使我们更加深刻地认识合作社这种生产形式的优越性,从而更加主动地在经济建设中运用这一生产形式。     

After Chayanov and Lenin: New paths of agrarian capitalism

The theory of peasant economy is dominated by two classic authors of largely contradictory views A.V. Chayanov and V.I. Lenin. This paper begins by setting forth their contrasting interpretations of differentiation among the Russian peasantry at the end of the nineteenth century, and the contrasting theoretical frameworks of marginalism and Marxism which underlie those interpretations. It then proceeds to set its debate against certain aspects of current transformations in the agrarian structures of Latin America which call for a transcendence of this classic debate. In particular, it is pointed out in conclusion that ‘family farms’ far from being a feature of ‘peasant’ societies, are more common and more dominant in countries and regions which have experienced a relatively dynamic process of capitalist development.     

Legal centralization and the birth of the secular state

This paper investigates the relationship between the historical process of legal central- ization and increased religious toleration by the state. We develop a model based on the mathematics of mixture distributions which delineates the conditions under which legal centralization raises the costs faced by states of setting a narrow standard of orthodox belief. We compare the results of the model with historical evidence drawn from two important cases in which religious diversity and state centralization collided in France: the Albigensian crusades of the thirteenth century and the rise of Protestant belief in the sixteenth century.