The Capitalist Revolution in Latin America

This article argues that the business enterprise has evolved through successive stable organizational structures which correspond with instability for those falling outside its aegis. This is shown in the institutional and historical context of both managerial capitalism in the mid-twentieth century as well as the era of financialization that followed. Hence, the framework developed herein elaborates on the ceremonial characteristics of the business enterprise under money manager capitalism, and constitutes a contribution toward an updated going concern theory of the business enterprise.     

Overhead Capital: A Study in Development Economics

Veblen's and Commons's contributions are outlined and related to the approaches to economics and political actions over the years of the author. Commons's philosophy and pragmatic contribution to economic and political institutions in order to help create decent living conditions for wage-earners within capitalism are reflected in the author's rethink in the late 1970s of what was possible for a social democratic government in Australia to achieve. The implication of John Kenneth Galbraith's example and writings on the war in Vietnam are linked to the author's actions in Australia during Australia's involvement in the war. The relevance of Veblen's damning critique of J.B. Clark's views on capital theory for the arguments of the Cambridge - Cambridge controversies in capital theory of the 1950s-1970s, first noted by Joan Robinson, are set out. Veblen's biting analyses of the nature of capitalism in his major writings are argued to be even more relevant now for the modern world of haves, have nots and have lots.     

Evolution of U.S. Household Agency Over Stages of Capitalism

We suggest ways to explore household agency over stages of capitalism as delineated by Hyman Minsky. We make a distinction between households as institutions and going concerns. Furthermore, we delineate two levels of household agency: (i) household going concerns operating through the institution of the household, and (ii) household going concerns operating through other institutions, such as the state and the business enterprise. Those layers of household agency are especially salient in money manager capitalism, where there is an illusionary agency for most households, and where actual agency increases mostly for those households that are able to operate as agents outside of the household institution.     

What If There Are No Conventional Price Mechanisms?

Inspired by Frederic (“Fred”) S. Lee’s theoretical contribution to institutional-heterodox economics, I make the case that the neoclassical price mechanism is not only flawed, but also irrelevant for the study of actual coordination mechanisms, hence the price mechanism — as a theory as well as a way of thinking — should be discarded. While this position was addressed by early institutionalists, starting with Thorstein Veblen, later institutionalists have not completely rejected the price mechanism. The sympathy for the price mechanism has prevented institutionalists (and other heterodox economists) from fully developing an alternative theoretical framework concerning how actual economic activities are organized. I, therefore, provide an institutionalist-heterodox framework of the provisioning process focusing on business enterprise activities. This framework shows how institutional economics becomes more refined and useful when it is married to other traditions in heterodox economics, in particular, Marxian, social, and post-Keynesian economics. Such an integrative approach is what Fred Lee showed through his work toward producing a better theory and policy for the underlying population.     

J.A. Schumpeter and T.B. Veblen on economic evolution: the dichotomy between statics and dynamics

At present, the discussion on the dichotomy between statics and dynamics is resolved by concentrating on its mathematical meaning. Yet, a simple formalisation masks the underlying methodological discussion. Overcoming this limitation, the paper discusses Schumpeter's and Veblen's viewpoint on dynamic economic systems as systems generating change from within. It contributes to an understanding on their ideas of how economics could become an evolutionary science and on their contributions to elaborate an evolutionary economics. It confronts Schumpeter's with Veblen's perspective on evolutionary economics and provides insight into their evolutionary economic theorising by discussing their ideas on the evolution of capitalism.     

Evolutionary Aspects of Corporate Concentration and Its Implications for Economic Theory and Policy

Thorstein Veblen's class analysis implicitly was a critique of the class analysis of some Marxists, who reduced the interdependence of economic base and ideological superstructure to a causal link from the former to the latter. Veblen's emphasis on the directive to take culture into account occurs later in Antonio Gramsci's theoretical innovations: namely, class struggle for cultural hegemony and the importance of the organic intellectual as ferment for class emergence. Gramsci was experiencing the mass movement of fascism, and the (now) classic analysis of social classes became an urgently needed extension to explain class evolution. Today, capitalism is in deep crisis once again. This paper argues that the drivers of the next revolutionary upheaval will, once more, be the social classes — particularly, the newly emerging ones. We graft ideas of Veblen onto concepts suggested by Gramsci to enhance the theoretical toolbox necessary to understand contemporary global class dynamics.     

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。     

Joseph Schumpeter and Thorstein Veblen on technological determinism,individualism and institutions

This article investigates Joseph Schumpeter's affinities with Thorstein Veblen with respect to technological change and determinism, the future of capitalism, individualism and institutions. From a methodological point of view, a common point in their analysis is their anti-teleological view regarding economics as a discipline. Also, in the Schumpeterian system, technology is the cornerstone of economic evolution and appears as the making of new combinations. In the Veblenian theoretical framework, the bearer of change is to be found, inter alia, in technology, just like in Schumpeter's works, although not without differences. They also share the opinion that technology revolutionises capitalism and has serious implications for its future as a system. Furthermore, regarding individualism, in his work Schumpeter stresses the importance of the social milieu on individual action, a fact which bears strong resemblance to the Veblenian notion of evolution as ‘depersonalized evolution’. In this sense, Schumpeter is very close to Veblen, although Schumpeter's approach could be classified in what is called institutionalist individualism, whereas Veblen could be classified as holist. Undoubtedly, the role of institutions is of great importance in both Schumpeter and Veblen. Ιnstitutions in the Schumpeterian schema play a central role closely related to the future of capitalism. Institutional and non-institutional factors enter into complex forms of interaction just like in Veblen's approach. There, institutions are part of the social milieu and their underlying framework, much wider than mere economic and social. Of course, the theoretical analyses of Schumpeter and Veblen are not devoid of differences springing mainly from their methodological approach such as the role of the individual in the capitalist process which is probably the most significant difference regarding the importance attributed to it in Schumpeter's early works. Also, the way technical change appears constitutes another difference. However, his views are quite close to Veblen's. After all, Schumpeter began to write in a social, political, theoretical and ideological environment at a time when evolutionary ideas dominated social thought.     

Education and the State

In the ethics-economy debate, money and credit have acquired growing significance. Moral judgements on some aspects of money and credit emerged particularly in the late medieval period when their development led the economic system towards capitalism. Scholarly Islamic and Christian analyses show that the evolution of money and credit may have triggered prejudices about the ethically-based rules underpinning the economy and society. Thought on the late medieval monetary and credit institutions highlight points of contact between Christian and Islamic ethical codes which are still of great interest, especially for the identification of a shared ethics going beyond business.     

Veblen's Discounted Expected Earnings Streams: Monopoly and Make-Believe

The paper has two purposes. The first is to explore Thorstein Veblen's contention that the theory of discounted earnings streams is inexorably linked to monopoly power. This contention has contemporary relevance. Modern price theory follows Irving Fisher's original claim that discounted streams has universal application and is consequently divorced from any explicit reference to industrial structure. The second purpose is to examine Veblen's anthropological claim that the transformation of discounted “make-believe” streams into present values reinforces a spiritual aura surrounding financial elites and their social standing.     

The Evolution and Devolution of Bank Regulation in the United States

Development economics is understood as a postwar phenomenon without antecedents. Yet, Veblen's contribution to development economics was once widely disseminated and acknowledged. Veblen's evolutionary economics centered on historically relative and limited truths applicable to specific cultures. Veblen's growth theory is a theory of economic development: quantitative accumulation is significant because it engenders qualitative change. Veblen's analysis of the harnessing of the economic potential centers on the ability of a society to successfully introduce scientific and technological advances, giving rise to increasing returns as the surplus is invested in industrial activities. Veblen presented oblique comments and startling insights in a non-empirical manner.     

Financialization in the American Pharmaceutical Industry: A Veblenian Approach

Thorstein Veblen’s theory of the business enterprise holds that business interests come to dominate industrial interests, with pecuniary returns being the dominant mindset under which economic activity is conducted. Under moneymanager capitalism, this is reflected in the increasing importance of profits from financial channels and the accumulation of intangible rent-generating assets to serve as the basis for capitalization — a process known as financialization. I examine this process of intangible asset accumulation within the context of the American pharmaceutical industry using Veblen’s theory of the business enterprise as a lens. I show that intangible assets have come to dominate productive capital on pharmaceutical enterprise balance sheets, suggesting that pharmaceutical profits are accumulated through rent-seeking channels rather than productive ones, in line with Veblen’s theory, and provide evidence of the financialization of this industry.     

Money as an Institution of Capitalism: Some Notes on a Monetary Theory of Uncertainty

Dillard notes that to consider money as an institution of capitalism means to emphasize that money is an essential element in explaining fluctuations in income and employment. He states that Keynes's liquidity preference theory offers a sound explanation of money as an institution of capitalism. Keynes's explanation is based on a necessary condition, independent of money: the presence of uncertainty. The objective of the paper is to elaborate a different explanation of the role of money, based on Keynes's 1933 and 1937–39 works, according to which the presence of money constitutes the necessary condition to justify the importance of uncertainty.     

Theory of Competition Policy: A Confrontation of Economic,Political and Legal Principles

Thorstein Veblen was a founding father of original, or old, institutional economics. The social and evolutionary usage of things and thoughts are at the center of Veblen's approach. In his studies, he dealt with psychological, social, anthropological and economic issues. The psychological content of Veblen's writing takes instinctive and habitual issues into consideration. The proposal of this paper is to revisit the psychology of Veblen's conspicuous consumer. In such a task, this paper discusses the role of observation and cognition in habit building, and their influence on the conspicuous consumer. It also introduces a psychological explanation of the importance of the leisure class to the conspicuous consumer. In order to build the analysis, this paper takes into account elements of Albert Bandura's vicarious learning. These elements are introduced to highlight vicarious observation as a key component of Veblen's conspicuous consumer.     

Public Knowledge and Financial Regulation: Two Post Crisis Periods

Abstract:

Since at least the days of Adam Smith there has been the recognition of essentially two forms of capitalism: in their theoretical extremes, one in which private companies determine the conditions of the social provisioning of credit and money, and one in which the State representing the general interest does. As we argue, the zeitgeist of the 1930s was a high water mark in the popular understanding of money and banking and its relationship with society. In contrast, today the general population is woefully ignorant on these points. As we argue, the relationship between financial governance and those governed hinges on the knowledge of the latter. Today’s public discourse reveals a widespread ignorance over financial matters that must accompany a likewise extreme moment of private control over nations’ money and credit. As we argue, the first steps towards a capitalism at the service of humanity and under public control, the first priority is publicly diffused knowledge.     

Contemporary Economic thought. The Contribution of Neo-Institutional Economics

This article examines the historical developments of the institutionalist theory of the business enterprise since the early 1900s in order to demonstrate its distinctive characteristics that are often overlooked or belittled by some institutional-evolutionary economists and most mainstream economists. I argue that the institutionalist theory is an evolving and emergent theory, which bears a reciprocal, evolutionary, and cumulative relationship between the business enterprise and society. The institutionalist theory is, therefore, suitable for the understanding of the real-world business enterprise as it can be modified and refined along with the evolution of capitalism. The article begins with a discussion of the present state of the institutionalist theory. The following section is devoted to the major contributions to the institutionalist theory situated in the evolution of U.S. capitalism. The penultimate section provides a critical discussion of new institutional and evolutionary approaches to the firm. The article concludes with a brief discussion as to what should be done for the further development of the institutionalist theory of the business enterprise.     

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.     

Solving the U.S. Trade Deficit and Competitiveness Problem

We compare the analytical approach of John R. Common and Ronald H. Coase to institutional analysis and social provisioning. In particular, we examine their similarities in (i) the definition and role of institutions in the economy, (ii) the allocative (social provisioning) role of institutions in the economy, and (iii) the inescapable and unchanging role of institutions in shaping the social provisioning process. We contend that Commons and Coase had more in common than did Coase and many of his followers in the “new institutional economics.” In particular, the two had strong similarities in both (a) their insights into the nature of institutions in the legal-economic nexus that is the foundation of the economy and (b) their methods for conducting economics research. Because this role of institutional evolution is, as Warren Samuels noted, an inescapable and unchanging part of an economy’s social provisioning process, it will remain an integral part of any such work in the future, regardless of the “school of analysis” or methodological approach.     

The Next Great Depression II: The Impending Financial Collapse

I seek to put social provisioning into perspective with regard to the financial instability issue in capitalism. My analysis rests on an institutionalist-Minskyian endogenous instability assumption and maintains that monetary/financial stability is a peculiar public good or specific commons since it concerns all of society and its viability in time, not individuals involved in private financial relations. Consequently, the provision of financial stability becomes essentially a matter of public policy and requires the intervention of public power in order to prevent finance from becoming a public “bad.” This result relies on the distinction between private “normal” goods and ambivalent/transversal money (and related financial relations). I point to the necessity of a public organization and tight regulation of finance and financial markets, when standard equilibrium models assume that social optimum and stability can be provided by private self-adjustment and market prices mechanisms.     

Lessons for Development from the Japanese Experience

Economic class, defined in relation to its actual control over the economy’s productive assets, is the most useful lens for examining power distribution in the post-Soviet transition and clarifying the neoliberal nature of its social provisioning processes. Using Ukraine as an illustration, I argue that only ownership empowerment of economically powerless classes can democratize the oligarchic transition economies. As an exit strategy from oligarchic capitalism, I recommend that state capitalism be implemented, as a transitory condition only, to divest oligarchs of unlawfully acquired economic power. Then, progressive restructuring of oligarchic companies must be conducted through broadening property ownership to include shared ownership and worker participation in economic decisions. I conclude that only by nurturing the democratic fundamentals of the economy and promoting a social democratic welfare state could a government in post-Euromaidan Ukraine initiate its own social control and create a genuine political and economic democracy.