Subjects Archives: Political Economy

Neoclassical economic models are based on the assumption that investment is financed from household savings.  Accordingly, capital accumulation will be maximized by policies aimed at increasing household savings rates and capital imports (“foreign savings”).  These models also predict that capital should flow from rich to poor countries, attracted by higher rates of return. However, facts […]

The basic issue is the same there and here.  Capitalism generates another of its regular, periodic crises, only this one is really bad.  It begins, as often happens, in the financial sector where credit invites the competition-driven speculation, the excess risk-taking, and the corruption that explodes first.  But precisely because the non-financial rest of the […]

Discussions on foreign direct investment (FDI) as a means of financing development often suffer from two different shortcomings.  The first, a very basic one, confuses real with financial resources.  The second does not distinguish between different forms of foreign direct investment.  The question of financing development is concerned with finding the real resources for increasing […]

Part 1: The German Space of Accumulation The present state of affairs in the Eurozone and in the EU reflects the partition of the European Union into three groups. The first is a group of neomercantilist countries centred on Germany and formed by Holland, Belgium, Austria and Scandinavia.  Their neomercantilism can be defined as a […]

  Phillip J. Cooper.  The War against Regulation: From Jimmy Carter to George W. Bush.  Studies in Government and Public Policy Series.  Lawrence: University Press of Kansas, 2009.  288 pp. $34.95 (cloth), ISBN 978-0-7006-1681-7. Phillip J. Cooper is an accomplished scholar of the executive branch of the U.S. government and its interaction with the courts. […]

Executive Summary: After nearly six years of record economic growth, the Venezuelan economy went into recession in the first quarter of 2009, shrinking by 3.3 percent that year.  A number of analysts see this as the end of an “oil boom” and the beginning of a long period of recession and stagnation. For example, in […]

DIE LINKE (the Left Party) has initiated a debate on its draft party program, which it wishes to officially adopt in Autumn 2011.  Neues Deutschland is joining this debate with a series of articles.  In the Neues Deutschland article published on 9 August 2010, Michael Heinrich tackles the issue of the relationship between capital and […]

  Highlights: 2010: Palestinian economy far from recovery The Palestinian economy held back by: The enduring cost of Israeli military operation in Gaza The closure policy in the West Bank The siege of Gaza A weakened tradable goods sector and an eroded productive base are at the heart of the Palestinian development bottleneck. Rehabilitation of […]

The biggest economic question facing Brazil, as for most developing countries, is when it will achieve its potential economic growth.  For Brazil, there is a simple, most relevant comparison: its pre-1980 — or pre-neoliberal — past. From 1960-1980, income per person — the most basic measure that economists have of economic progress — in Brazil […]

Is there an economic recovery underway?  Was there one that has now stopped?  Will our current recession, partly recovered from, now tumble downward again in a second or “double” dip?  Mainstream politicians, journalists, and academics are engaged in hot and heavy debates about recoveries and double dips.  Yet the economic reality for most Americans is […]

  Excerpt: Household Debt and Credit Developments in 2010Q21 Aggregate consumer debt continued to decline in the second quarter, continuing its trend of the previous six quarters.  As of June 30, 2010, total consumer indebtedness was $11.7 trillion, a reduction of $812 billion (6.5%) from its peak level at the close of 2008Q3, and $178 […]

From the late summer of 1985 into the early spring of 1986, the small town of Austin, Minnesota, figured prominently in the national news.  The dramatic themes and issues, twists and turns, of a labor conflict there captured the national imagination.  This interest was not merely passive, as more than thirty support committees formed across […]

  Paul Jay: In China in June, leaders of the Chinese Communist Party said that it’s time for workers’ wages to go up.  And there’s been a lot of discussion about whether China’s actually restructuring its economy to try to boost domestic demand.  Certainly in what leaders say in other parts of the world they […]

  In the wake of the disastrous oil spill in the Gulf of Mexico, the public and the media have turned their attention to some of the subsidies provided through the tax code to BP, the corporation that leased the ill-fated Deepwater Horizon drilling platform.1  The truth is that oil and gas companies have for […]

David Leonhardt tells readers that the Great Recession has had some silver linings for many workers.  High on his list is continued wage growth.  This is misleading.  All the real wage growth in this downturn occurred in the months of November and December of 2008.  This was due to a plunge in the price of […]

Much has been written on the subject of the capitalist State in the era of neo-liberalism.  Two features of the “neo-liberal State” in particular have been highlighted.1  One relates to the change in the nature of the State, from being an entity apparently standing above society and intervening in its economic functioning in the interests […]

The government of Hungary has taken on a lot of powerful interests in the last couple of months, and so far appears to be winning — despite provoking outrage from “everybody who’s anybody.” “The IMF should hold the line,” shouted the Financial Times in an editorial the day after Hungary sent the IMF packing in […]

Rarely has an economic idea had such a brief revival.  After several years of almost undisputed sway of monetarist ideology over economic policy makers across the world, suddenly Keynesian ideas were back in fashion, in particular the idea that active state intervention in the form of increased state expenditure is necessary to bring a market […]

At the end of the first decade of the twenty-first century, the Left around the world is undergoing reformation.  As the Great Recession has vividly demonstrated, more than three decades of neoliberal capitalism have eroded many of the significant gains won in the immediate decades following WWII.  From wage and benefit concessions to reductions in […]

The Economist (July 15) published an editorial on Egypt and Saudi Arabia (two dictatorial countries allied with the United States in the Middle East) expressing hope that they would become democratic in the future.  What is surprising, however, is that in the same issue the magazine did a favorable review of a book by Stephen […]