Toward ‘Wisely Managed’ Capitalism: Post-Keynesian Institutionalism and the Creative State

Post-Keynesian Institutionalism (PKI), a synthesis of post Keynesian and institutional economics, emerged in the USA as a strand of evolutionary economics in the early 1980s and has attracted increasing attention in recent years. This article examines milestones in the development of PKI, devoting particular attention to the tradition’s conception of the role of the state. The first section identifies antecedents to PKI in the writings of John R. Commons and John Maynard Keynes. The second describes how PKI emerged against the backdrop of increasing dissatisfaction with neoclassical Keynesianism in the era of stagflation. The third summarizes the subsequent contributions of Hyman P. Minsky, whose work was a model of PKI in the 1980s and 1990s. The final two sections outline PKI’s contemporary characteristics and identify elements of an agenda for future research. PKI has always been about achieving a more humane form of capitalism, which requires the state to play a creative role in shaping economic life.

Enrico Barone's ‘Ministry of Production’: Content and Context

Abstract

Enrico Barone's famous article on economic planning, ‘Il Ministro della Produzione nello Stato Collettivista’ (‘The Ministry of Production in the Collectivist State’), which showed the theoretical possibility of an economically efficient collectivist planned economy, was published in Giornale degli Economisti in 1908. Barone's article has been widely cited, particularly in the comparative economic systems literature, but it has not been very widely read or analysed in recent years, and there is not much literature that places Barone's ‘Ministry’ model in the context of his other works or in its historical, social, or ideological context. The aims of this article are: (a) to analyse and clarify Barone's model in depth; (b) to place it in the context of Barone's other writings and the literature on the subject; and (c) to examine the apparent contradiction between Barone's hostility to socialism and his attempt to formulate the pure theory of the collectivist economy.     

The National State and Identity Politics: State Institutionalisation and “Markers” of National Identity

Nationality has been a key identity in international relations for much of the modern period, and the marriage of “nation” and “state” produced a powerful polity – the national state – that dominated global politics. This article investigates the forces that “pushed” and “pulled” nations and states together and explores the factors associated with violent identity politics. It argues that while recent decades have witnessed increasing instances of divorce between “nation” and “state” and a simultaneous proliferation of identity conflicts, the likelihood that identity conflicts will be expressed violently depends both on the character of the state (the timing of state institutionalisation relative to the construction of national consciousness, the democratic or non-democratic nature of the state, and the national or non-national basis for the legitimation of state authority) and on the principal “marker” used to construct national identity (blood, language, culture, religion, or citizenship).     

The New ‘Passive Revolution’ of the Green Economy and Growth Discourse: Maintaining the ‘Sustainable Development’ of Neoliberal Capitalism

This paper analyses the rapidly emerging discourse of a green economy based on green growth. It highlights inherent conflicts and contradictions of this discourse such as the myth of decoupling growth from the environment, pollution generations and resource consumption. Using key theoretical constructs of both Gramsci and Polanyi, the paper argues that the green economy/growth discourse can be seen as a Gramscian ‘passive revolution’ whereby the dominant sustainable development discourse, subsumed by capitalist hegemony, is protected in the context of global environmental, economic and development crises. The ‘neoliberalising of nature’, or in other words, the privatisation, marketisation and commodification of nature, akin to Polanyi's fictitious commodities, continues and intensifies with green economy/growth strategies. Greening the economy and associated strategies of green growth divert attention from the social and political dimensions of sustainability and issues of social and international justice. In this way, the inexorable march or ‘sustainable development’ of neoliberal capitalism is maintained. This paper goes on to argue that contesting the claims of green economy/growth discourse through political struggles by civil society against the neoliberalisation of nature is a sign of a slowly emerging counter-hegemonic ‘double movement’ which challenges capitalist hegemony and the commodification of society–nature relations.     

Money power of Capital and Production of ‘New State Spaces’: A View from the Global South

An array of innovative financial and monetary institutional and policy initiatives recently emerged across the Global South at various spatial scales: (1) the deployment of national ‘self-insurance’ strategies such as large foreign reserve accumulation, different forms of capital controls, and currency market interventions; (2) the multiplication of bilateral, sub-regional, and regional financial and monetary mechanisms, including currency swaps and reserve-pooling arrangements, credit lines, bilateral aid, and development finance; and (3) a growing participation and assertiveness in multilateral financial arrangements. After critically reviewing the existing literatures – the international political economy (IPE) of ‘policy space’ and the IPE of ‘financial statecraft’ – the paper deploys a ‘scalar-relational’ critical IPE approach and interprets these policy initiatives in terms of a crisis-driven production of ‘new state spaces’ across the Global South, in the context of the current period of credit-led capital accumulation. The paper argues that this process has been characterised by the contradictory extension, intensification and growing complexity of the tasks taken on by the capitalist state at various scale levels, resulting in the increasing entanglement of state power in the nested hierarchy of monetary relations, from the global scale to bodies and subjectivities.     

The Structure of the ‘EU’ropean Ensemble of State Apparatuses and Its Geopolitical Ambitions

Against the backdrop of the international political and economic system’s increasing fragmentation, this article attempts to analyse the geopolitical ambitions of the EU. Currently, the EU strives to become an independent global power. For this purpose, the EU tries to establish greater independence from the US and, to a certain degree, from its Member states. This is closely linked to (a) the emergence of the Euro as a currency competing with the US dollar for the status of the ‘global reserve currency’ and (b) the construction of a common foreign and ‘security’ policy. Taking the German literature on the political economy of the state and on the European Integration, insights from neo-Gramscian International Political Economy, and the ‘scale debate’ in Anglophone geography as point of departure, I analyse the European ensemble of state apparatuses and demonstrate that these ambitions have failed, due to the status quo of a fragmented Europe.     

Euro-Crafting at Border Zones: The Case of the Greco-Turkish Border and the Question of a European Union ‘Beyond the State’

The European Union is often conceptualised as an entity that is profoundly different from that of the modern state. Through a reading of the recent humanitarian crisis precipitated by large-scale migration into Greece, the paper challenges the understanding that the crafting of the European Union (‘Euro-crafting’) is qualitatively different from the crafting of the modern state. Conceptually, the paper proposes that Euro-crafting should be thought through in relation to practices of statecraft, instead of a priori postulated as qualitatively different from such practices. Putting such an understanding of Euro-crafting to work, the paper explores the recent humanitarian crisis precipitated by large-scale migration into Greece and demonstrates how practices of Euro-crafting mirror the major desire-driven practices of modern statecraft; practices of ordering, bordering, and identification.     

Post-capitalist Development in Latin America’s Left Turn: Beyond Peronism and the Magical State

The persistence of struggles by popular sectors in the context of the pink tide has generated ongoing debates about how to interpret the region’s left turn. For some, these movements are understood as forming part of a tense but ultimately productive relationship with left governments in the pursuit of post-neoliberal development. For others, it points to potentially irreconcilable political differences, and neoliberal continuities in pink tide governance. In this paper, I address these debates by presenting research on two social movements: Argentina’s recuperated enterprises and Venezuela’s popular economy. Using a Marxian-inspired, situated case study approach, I argue that these movements can be understood as ‘post-capitalist struggles’, that is, attempts to articulate new forms of democracy and cooperation that point beyond capitalism. As such, these movements push beyond the politics of Kirchnerismo and Chavismo that reproduce, albeit in new forms, the limitations to post-capitalist development associated with Peronism and the ‘magical state’. These movements therefore reveal both the region’s potential post-capitalist future, and the barriers that stand against it in the context of the region’s latest phase of development.     

‘Sovereignty Entrepreneurs’ and the Production of State Power in Two Central African Borderlands

This article advances a subaltern geopolitics of sovereignty production at the borders of the DR Congo – the supposedly most fragile – and South Sudan – the youngest state in Africa. Moving beyond critiques of representing postcolonial statehood and sovereignty in terms of ‘lack’ and ‘failure’, we localise and ground analysis by drawing on Butler’s figure of the ‘petty sovereign’‘ to analyse the agency of border officials at the DR Congo/Rwanda and the South Sudan/Uganda border who we refer to as ‘sovereignty entrepreneurs’: officials who, tasked with managing and controlling the border, in constant face-to-face negotiations and closely linked to resource competition prescribe, set and decide on the terms and conditions of border crossing. It is argued that in the context of the DR Congo and South Sudan, where the states’ claims to territorial sovereignty face similar internal and external challenges, the border work of sovereignty entrepreneurs, characterised by the ability to tax, threaten and discipline with impunity, represents a form of sovereign power that renders the state’s capacity to act excessively visible at its borders.     

Uncertainty and the Value of Capital: Marginal Efficiency and the ‘Conventional Projection’

Keynes provided not one but two formulae for calculating the relationship between the Present and the Future. On the one hand we have the well-known Marginal Efficiency of Capital (MEC), where the value of the present stock equals the discounted sum of future earnings, but on the other we have the Conventional Projection (CP) where the expected earnings in the future reflect the productivity of present facilities. The MEC is likely to reflect the views of fund managers, the CP the views of corporate managers. These two sets of judgments of the future may coincide or diverge. Either way they determine the value of the present capital in terms of claims to it—and this determination may be stable or unstable, but in any case will be volatile in the sense that the underlying uncertainty can lead to rapid shifts. By contrast, the Classical Equations will give us the value of present capital in terms of its replacement or real cost. This is reliable, being based on the real side of the economy. The ratio of this to the uncertain and volatile MEC/CP financial calculation is analogous to Tobin's Q, and will play a role in determining investment decisions, but it chiefly gives us insight into how volatile those must be.     

Religeopolitics: Dissident geopolitics and the ‘fundamentalism’ of Hamas and Kach

This article highlights the close relationship of religion and geopolitics in general and within religious fundamentalist ideologies in Palestine/Israel in particular. A new concept of ‘dissident geopolitics’ is used to circumvent state‐centrism of Tuathailian critical geopolitics and, furthermore, a new theoretical framework of ‘religeopolitics’ is elaborated and utilised in the following case study to pinpoint the geopolitical core within the ideologies of the movements of Hamas and Kach. Both movements are violent, ‘fundamentalist’ and claim the Other to be the enemy and the self to be the rightful owner of the territory of Palestine/Israel. The case study also shows how violence is legitimised in relation to religion and geopolitics. Finally, suggestions are given to expound religeopolitics within other areas of IR scholarship, more related to each other than ever in the post‐11 September world.     

From the ‘econometrics of capital punishment’ to the ‘capital punishment’ of econometrics: on the use and abuse of sensitivity analysis

The academic debate over the deterrent effect of capital punishment has intensified again with a major policy outcome at stake. About two dozen empirical studies have recently emerged that explore the issue. Donohue and Wolfers (2005 Donohue, J and Wolfers, J. 2005. Uses and abuses of empirical evidence in the death penalty debate. Stanford Law Review, 58: 791–845. [Web of Science ®] , [Google Scholar]) claim to have examined the recent studies and shown the evidence not to be robust to specification changes. We argue that the narrow scope of their study does not warrant this claim. Moreover, focusing on our two studies that they have examined, we show the deterrence findings to be robust, while their work has serious flaws and their reporting appears to be selective. The selectivity is biased towards showing ‘no deterrence’.     

Latin American Development: What About the State,Conflict and Power?

Abstract:

Several authors have raised the similarities between Latin American structuralism and economic institutionalism, pointing out the possibilities of reciprocal enrichment between both approaches but highlighting, at the same time, the mutual ignorance between them. However, the eventual interaction between these theories was hampered by the advent of the neoclassical—and neoliberal—offensive, and the displacement of Latin American contributions, both in its structuralist and dependency variants. The replacement of these contributions by the neo-structuralist approach implied a displacement of the characteristics of original structuralism, associated with the conception of central-peripheral economies, and the central role of the state for Latin American development. These displacements, I argue, limited the possibility of finding the means to achieve the so-called social transformation, to which institutionalists and structuralists referred. The present article tries, on the one hand, to critically analyze the neo-structuralist discourse, evaluating how these displacements affect the possibility of proposing a structural transformation in Latin America (led by the state). On the other hand, it seeks to recover the dimensions associated with power, conflict and the centrality of the state to rethink the challenges of structural transformation, from which articulations between structuralism and institutionalism could be proposed.     

Integration,Diversity, Plurality: Territorial Governance and the Reconstruction of Legitimacy in a European ‘Postnational’ State

This article deals with the European ‘legitimacy crisis’ from a neglected perspective, looking at ‘Europe’ not primarily as a set of formal (or formalisable) institutions, but rather as an emergent, policy-driven institutional construct. In this perspective, European integration may be very much seen as the outcome of the policies that are enacted in the European supra-national arena as well as of the way such policies are continuously reinterpreted, renegotiated and re-enacted in the different arenas of its multi-level polity. What is at stake in adopting a policy approach to the European legitimacy issue is, hence, a critical appraisal of development of processes of ‘institutionalisation of Europe’ that range far beyond issues of constitutional design. A crucial consequence is the need to ‘spatialise’ discourse on European reforms. The conclusion is a plea for an integration model for Europe not only constitutionally respectful of diversity, but constitutively enhancing diversity, and for an approach to policy reforms acting upon a ‘political geography of differences’.     

Corporate social responsibility and the ‘game of catallaxy’: the perspective of constitutional economics

The paper examines the issue of corporate social responsibility (CSR) from the perspective of constitutional economics, focusing on the distinction between a political community’s constitutional choice of the rules of the “market game,” and the market players’ sub-constitutional choice of strategies within these rules. Three versions of CSR-demands are identified and discussed, a “soft,” a “hard”, and a “radical” version. The soft version is concerned with the issue of how “socially responsible” corporations ought to play the market game within existing rules. The hard version is about how the rules of the market ought to be changed in order to induce “socially responsible” corporate behavior. And the radical version questions the compatibility of CSR and the logic of the market game, calling in effect for adopting some alternative economic regime.

A note on the ‘Linsanity’ of measuring the relative efficiency of National Basketball Association guards

This note examines the productive efficiency of 62 starting guards during the 2011/12 National Basketball Association (NBA) season. This period coincides with the phenomenal and largely unanticipated performance of New York Knicks’ starting point guard Jeremy Lin and the attendant public and media hype known as Linsanity. We employ a data envelopment analysis (DEA) approach that includes allowance for an undesirable output, here turnovers per game, with the desirable outputs of points, rebounds, assists, steals and blocks per game and an input of minutes per game. The results indicate that depending upon the specification, between 29% and 42% of NBA guards are fully efficient, including Jeremy Lin, with a mean inefficiency of 3.7% and 19.2%. However, while Jeremy Lin is technically efficient, he seldom serves as a benchmark for inefficient players, at least when compared with established players such as Chris Paul and Dwayne Wade. This suggests the uniqueness of Jeremy Lin's productive solution and may explain why his unique style of play, encompassing individual brilliance, unselfish play and team leadership, is of such broad public appeal.     

‘Conscience Capitalism’ and the Neoliberalisation of the Non-Profit Sector

This article analyses a range of initiatives, labelled as ‘conscience capitalist’, that have become prominent since the 2008 financial crash. Conscience capitalism encompasses projects emerging in both the for- and non-profit sectors that seek to connect neoliberal capitalism with concepts of morality and conscience. The article begins by unpacking conscience capitalism, showing how its for-profit advocates seek to transform capitalism by orienting it towards accounting for social and environmental externalities, and how its non-profit supporters seek to incorporate components of neoliberalism to serve their environmentally and/or socially focused agendas. Conscience capitalism appears to be a re-evaluation and call for reform of the prominent forms of neoliberalism. However, this article argues that, rather than comprising a hindrance, conscience capitalism offers a means of advancing the project. This is evident in its attempts to reconstitute social and environmental externalities in terms relatable to the market, and represent social and environmental problems in quantitative terms in which the success of market-based solutions can be read. Acknowledging some of the successes of conscience capitalist campaigns, the article concludes by arguing that this continued neoliberalisation of the non-profit sector favours campaigns consistent with neoliberalism and has the potential to undermine the democratic governance of non-profits.