The Lost Promise of Democratic Socialism in Russia

To explain the failure to create democratic socialism in Russia after the 1917 Bolshevik Revolution, I apply Thorstein Veblen’s vision of economic democracy as a cure for vested interests. In late imperial Russia, many socialist thinkers imagined socialism primarily in terms of workplace democracy, worker ownership, local governance, and economic decentralization. Their vision was destroyed, first, by Bolshevik policies and then by Stalin’s tyrannical command economy. Thereafter, vested interests reemerged in the Soviet Union as an underground economy, rife with theft of public resources, and then, with the beginning of transition, capitalism in its most neoliberal form was restored.     

China’s economic reforms and growth prospects

Conventional wisdom attributes China’s rapid economic growth to its model of state capitalism, which combines direct state ownership of the commanding heights of the economy and indirect state control of the rest of the economy through industrial policies and the allocation of credit through state-owned banks. This article argues that China’s growth since 1978 is largely due to the result of the expanding role of markets and the rise of private business. If China systematically adopts the economic reform agenda endorsed by the Chinese Communist Party in the fall of 2013, it likely will avoid a sustained period of much slower growth that some have forecast.     

Chronicles of a democracy postponed

We explain a lack of civic culture in today's Russia, closely related to a democratic deficit in the country, by a path dependency which has originated at the critical juncture of transition to market economy. Suppression of democracy in the early 1990s to expedite unpopular reform exposed the new institutional order to oligarchic capture and set in motion a vicious circle of extractive economic and political institutions. The latter have been shaping views and attitudes in the society via institutional learning, continuously suppressing civic culture and solidifying social foundations for extractive institutions. We present evidence from the World Values Survey supporting the above conclusions.     

Depoliticisation,the Management of Money and the Renewal of Social Democracy: New Labour's Keynesianism and the Political Economy of ‘Discretionary Constraint’

Pointing to its radical underpinnings in so-called ‘Open Marxism’ and its theory of the state (one that subsumes the state in the capital relation), this article critically scrutinises Peter Burnham's thesis of ‘depoliticisation’ as a dominant accumulation strategy and regime. The article identifies ambiguities around Burnham's depiction of New Labour in power as committed to depoliticisation. It addresses these by drawing a distinction between regime of accumulation and mode of regulation, characterising New Labour's political economy in terms of the latter as a form of depoliticised Keynesianism framed by ‘discretionary constraint’. Contra-Burnham, the article points to the continued efficacy of Keynesian and social democratic political agency in the context of a dialectic of depoliticisation and repoliticisation focused on the role and power of the state. This dialectic is symptomatic of the contested regulation of capitalism around the defence of the value of money, on the one hand, and its broader management and redistribution, on the other.     

Ukraine's unconsidered losses from the annexation of Crimea: What should we account for in the DCFTA forecasts?

In March 2014 Crimea unilaterally declared its independence from Ukraine and joined the Russian Federation. The separation of a part of a state's territory and economy is an interesting matter to examine. The economy of Ukraine has not only shrunk, but also changed its structure as Crimea had a quite distinct production pattern compared to the rest of Ukraine. Moreover, policy measures initialized before the separation may have different effects once applied only to a part of the former economy. This paper proposes a strategy to model the separation of part of an economy and its inclusion into another country and applies this strategy to the case of Crimea, Ukraine, and Russia. Having constructed a model for the new geographical and economic situation, we reinvestigate the possible effects of a Deep and Comprehensive Free Trade Agreement between Ukraine and the EU and compare the results for the situation with Crimea as part of Ukraine. We find that the annexation of Crimea leads to severe economic losses for Ukraine which are partly overproportional compared to Crimea's economic size. These negative effects can be compensated by implementing the DCFTA with the EU as we also show in our model results.     

Brexit and the Politics of UK Growth Models

Brexit has reopened and repoliticised the debate about future growth models for the UK economy. This contribution argues that this debate is built around historically specific path dependencies that reflect the particular character of public debate about British political economy, while also suggesting that the debate around Brexit takes place at a very distinctive moment in the history of democratic capitalism in Europe. This combination gives the renewed politicisation a specific and perhaps perverse character. The paper considers how we should approach debates about growth models, paying particular attention to the importance of the politics of support. It suggests that recent debate about growth models has been largely subsumed within the politics of Brexit, which has politicised that debate, albeit through the emergent political economy frames that Brexit has provoked. The paper explores the ways in which the demise of three key props of European democratic capitalism – a sustained period of economic growth, a governing philosophy that subordinated the market to wider social purposes and strong political parties – play out in the context of Brexit and the search for a new politics of support.     

A proposal for a democratic market economy

A type of market socialism is proposed for the United States both as a means of attaining more social equality than private ownership of corporate business makes politically and economically feasible, and of advancing a whole range of liberal purposes by undermining direct and indirect political power of the conservative business community. It is proposed to transfer ownership of corporate business to a system of local-government investment funds under specified national regulation. Such a system could retain all the economic advantages of capitalism, while facilitating better control of inflation, and would have genuine political feasibility in the United States.     

“Love of wealth” and economic growth

In a Ramsey–Cass–Koopmans growth framework it is shown that for an optimum a benevolent social planner cannot have an excessive “love of wealth”. With a “right” “love of wealth” an optimum exists and implies higher long‐run per‐capita capital, income, and consumption relative to the standard model. This has important implications for comparative development trajectories. The optimum implies dynamic efficiency with the possibility of getting arbitrarily close to the golden rule where long‐run per‐capita consumption is maximal. It is shown that the optimal path attains its steady state more slowly. Thus, the beneficial effects of love of wealth materialize later than in the standard model. Furthermore, the economy can be decentralized as a competitive private ownership economy. One can then identify “love of wealth” with the “spirit of capitalism.” The paper thus implies that one needs a “right” level of the “spirit of capitalism” to realize any beneficial effects for the long run.     

British Influence on Argentine Growth: The Dependency Controversy

Using Russia's state capitalist economy as an illustration, this paper discusses possible roles that the emergent regime of state capitalism could play in shaping societal evolution along more democratic and equitable lines. The study discusses major currents within the modern discourse of constructivist evolutionism to situate suggested roles for state capitalism within evolutionary economics, thus increasing the range of research issues that can be investigated. The paper argues that the theoretical framework of institutionalist constructivism makes it possible to demonstrate, with a progressivist agenda, the potential that could exist in a state capitalist order. Moreover, the paper outlines policies for progressive development through state capitalism.     

The economic debate on power: a Marxist critique

In the economic debate on power, seemingly opposite positions have been presented. Contractualists have claimed that power relations do not exist in capitalism, and radicals have maintained that they are ubiquitous. In the middle, transaction costs and property rights economists have argued that power relations exist only within the firm. The underlying conception, however, is the same: power is an interpersonal relation caused by imperfections in the decision-making context and is incompatible with Walrasian competition. The difference among these theories involves their viewpoints on the concrete spread of imperfections in reality. The thesis of this paper is that this narrow conception of power is a consequence of neoclassical methodology. Following Marx, I analyze power as a social relation, and I discuss three problematic aspects of the neoclassical conception: its individualistic methodology, the assumption of universal rather than historical categories, and an ontology that conflates production and circulation.     

DEMOCRACY IN REFORMING COLLAPSED COMMUNIST ECONOMIES: BLESSING OR CURSE?

From a political standpoint, post-communists systems include both democratic and non-democratic nations. From an economic standpoint, they include both collapsing and expanding economies. All four logical possibilities exist for post-communist political and economic systems. The Czech Republic is an example of a democratic political system and an expanding economic system. Russia is an example of a democratic political system and a collapsing economic system. China is an example of a non-democratic political system and an expanding economic system. North Korea is an example of a non-democratic political system and a collapsing economic system. The fact that all four logical possibilities exist suggests that democracy is neither necessary nor sufficient for good economic performance. However, democracy is certainly a value in itself that requires certain basic institutions, including free and fair elections, the orderly transfer of power to those elected, the rule of law and the separation of powers, and the protection of individual freedoms and basic liberties, including those of speech, press, religion, assembly, property, and economic opportunity. Economic policies, rather than the form of government, determine the results for an economy. Russia and China, the two largest socialist economies, followed very different economic policies and experienced radically different outcomes. The failure of “shock therapy” economic policies for transition to a market economy in Russia is related to its use of the Washington Consensus SLP package of stabilization, liberalization, and privatization, as recommended by the World Bank and the IMF. The success of Deng's economic policies for transition to a market economy in China is related to its rejection of the SLP in favor of the ICG approach of institutions, competition, and government. Other interesting cases are those of the Czech Republic and North Korea. Those nations in which both political and economic reforms have been simultaneously successful, such as the Czech Republic, are generally small, homogeneous European nations with a historic work ethic, with a relatively short period of socialism, and with support from neighboring advanced industrialized nations. There is great difficulty in simultaneously establishing both democracy and a market economy without a very special set of circumstances. Thus, it is necessary to determine a sequence for political and economic reform. Ultimately, however, the ideal of both democracy and a market economy may be attained even in nations without special circumstances and external assistance, with Russia eventually turning its economy around and with China eventually reforming politically into a democratic nation.     

Capital,the State,and the Monetary Mode of Power: A Review of Nitzan and Bichler's Capital as Power

In their recent book Capital as Power, Jonathan Nitzan & Shimshon Bichler depict capitalism as a mode of power rather than a mode of production, in which political and economic power are no longer distinct. In addition, they argue, contrary to neoclassical theory, that capital has nothing to do with productivity but instead represents power. I make three broad criticisms: first, their elimination of the distinction between economics and politics renders any empirical test of their ostensible integration impossible; second, they do not adequately define their main concepts, including capital, capitalization, capitalism, and power; and third, they do not acknowledge the possibility that the patterns they attribute to power may in fact be self-organized. This paper argues that money is a claim to wealth, not wealth itself, that it measures and distributes the power of payment, and that payments redistribute the power of ownership, including the ownership of money. Finally, I suggest that, in light of the global debt crisis, a theory of capital-as-power should examine the power of finance, which entails the privatization and concentration of the power to create money as debt.     

The Great Recession and social preferences: Evidence from Ukraine

We use detailed survey data to document stark differences between West and East Ukraine when it comes to household attitudes toward market-based economies and democratic institutions. Along both of these dimensions, Eastern Ukrainians are decidedly less supportive of liberal systems. We also find that economic attitudes changed in response to the global financial crisis. West Ukrainian households who were affected more extensively by the crisis were more disappointed with the market and private ownership, while in Eastern Ukraine economic attitudes became less pro-market across the board. Our evidence suggests that attitudes and values are determined by both deep-rooted factors and more transient macroeconomic shocks.     

我国国有企业性质的重新审视——由“国进民退”或“民进国退”引发的思考

我国未来五年经济社会发展的一个非常重要的任务,就是推进国有经济战略性调整,健全国有资本有进有退、合理流动机制。用马克思、恩格斯关于国家所有制的观点,重新审视我国国有企业的性质,可以看到社会主义国有企业改革与社会主义所有制改革的正向相关性,进而为有进有退正名。进与退以国有经济布局的战略性调整为背景,是指国有经济在命脉领域的进与退;进退的主体是国有企业;进退的结果是实现产业结构的优化和升级,以及所有制结构的调整完善;进退的机制是市场机制或价值规律的作用机制。不能用国进民退或民进国退来解释有进有退。     

Does Europe need neoliberal reforms?

This paper examines the neoliberal claim that the only way toachieve sustainable growth and full employment is to abandonKeynesian macroeconomic management and the welfare state andbring back ‘flexible labour market policies’. Itsummarises the conditions required for neoliberal policies toproduce such an outcome and their relevance to contemporaryeconomic, social and political realities. This is followed byan empirical comparison of the economic performance and socialwell-being of seven advanced economies, widely regarded as leadingproponents of the three models of capitalism: liberal, corporatistand social democratic. Contrary to the claim, the model thatperforms best is the one that has least in common with the neoliberaleconomic orthodoxy – a conclusion that is likely to beof particular relevance in the present century.     

Marx 200: The Abiding Relevance of the Labour Theory of Value

ABSTRACT

Marxist political economy is alive and well, and not just because of the habitual turn to Marx in response to any crisis of capitalism. Both through Capital and through the continuing evolution of Marxism, Marxist political economy offers valuable insights that can illuminate the modalities of social and economic reproduction and the relationships between (different aspects of) the economic and the non-economic. Marxism’s presence has been felt through its own internal debates and debates with other approaches to political economy, and even through its influence on those reacting against Marxism. The key to the continuing relevance and analytical strengths of Marxist political economy lies in its capacity to provide a framework of analysis for unifying disparate insights into and critiques of the contradictions of capitalism across the social sciences. The instrument for forging that unity is Marx’s theory of value, the potential of which is examined and illustrated with reference to the Sraffian critique and two key concepts in Marxian political economy: the value of labour power and financialisation. They are explored in the light of the processes of commodification, commodity form and commodity calculation.     

Ownership structure,corporate governance,and enterprise performance: Empirical results for ukraine

This paper examines the effect of ownership structure on corporate governance and performance of privatized enterprises in transition. The data are taken from a survey conducted in 2001 on 202 medium and large firms in Ukraine for the period 1998–2000. The ownership structure is measured by the percentage of shares held by each type of owner (state, managers, workers, Ukrainian concentrated outsiders, foreign concentrated owners, and stake-holding shareholders). Performance is measured by sales per employee. Regression analysis is used to test the hypothesis that concentrated outside ownership influences performance positively and to detect non-linear effects of ownership variables on performance. In contrast, with important previous studies on enterprise restructuring in Ukraine [Estrin and Rosevear, 1999], significant ownership effects on performance are found. Insider ownership (being a special case of stakeholding ownership) is found to have a significant non-linear effect on performance—positive within a lower range but negative from a threshold close to majority ownership onwards. In general, Ukrainian outside owners do not have a significant effect on performance. However, stakeholding ownership by customers affect sale prices and performance negatively. The most robust results are obtained for the effects of concentrated foreign ownership, both for levels of the respective variables in each year and for changes from one year to the other. The impact of foreign ownership on performance is significantly non-linear: its effect is positive only up to a level that falls short of majority ownership. It is concluded that this non-linearity is due to an institutional environment still adverse to foreign direct investment.Support from Alexander-von-Humboldt Foundation is gratefully acknowledged.     

Economic Transition in Central and Eastern Europe: Comparisons and Lessons

Abstract
There are three features which distinguish the global transition in Central and Eastern Europe: both economic and political systems are the focus of radical transformation, this institutional revolution has been largely peaceful, and a pluralistic political system emerged faster than capitalism in the economic sphere. The initial conditions, for example the inherited economic structure, the macroeconomic situation and the type of economic system, have an important impact upon the pace and effects of the subsequent market-oriented reform. There are four important reasons why the state should concentrate its activity on the sphere of its natural competence. These reasons are even more important in economies of transition. The speed of the subordinate processes of transition differs which gives rise to important issues of phasing. Macroeconomic stabilisation, microeconomic liberalisation and privatisation should be implemented at a speed close to maximum. The Polish economic reform shows that a radical and comprehensive economic program introduced in an initially socialist economy, under extremely difficult macroeconomic conditions, can be successful in spite of powerful external shocks .     

论马克思宏观性的货币理论

货币理论是马克思经济理论体系中一个非常重要的组成部分。马克思对整个资本主义经济体系的分析,都是建立在货币理论基础之上的。对货币而不是产品的追逐,使资本主义成为货币经济而不是西方主流经济学中的交换经济,货币在资本主义或市场经济中占有特别重要的作用,其量的变化决定着市场经济运动的方向。从马克思内生性的货币理论出发,可得到资本主义经济在长期保持相对稳定而短期则不断波动的结论。所以,客观认识马克思货币理论的主要内容,不仅对正确理解马克思宏观动态性的理论体系有着十分重要的意义,而且对建设有中国特色的经济学和货币调控有非常重要的借鉴意义。