Showing papers by "John E. King published in 2008"

The Rise of Neoliberalism in Advanced Capitalist Economies

Abstract: Introduction PART 1: HISTORICAL MATERIALISM: A THEORY OF ECONOMIC SYSTEMS A General Theory of Economic Systems A Theory of Capitalist Economic Systems PART 2: THEORISTS OF MODERN CAPITALISM ON THE DECLINE OF THE MARKET Marx and the Marxists on the Decline of the Market Neoclassicals, Keynesians and Heterodox Economists on the Decline of the Market PART 3: NEOLIBERALISM AND MODERN CAPITALISM Market Elimination in Modern Capitlism: Where the Theorists were Right The Return of the Market: Where They All Went Wrong PART 4: THE RISE AND DECLINE OF NEOLIBERALISM IN ADVANCED CAPITALISM Why Was Neoliberalism Delayed? What Might Reverse Neoliberalism?

The Rise of Neoliberalism in Advanced Capitalist Economies: A Materialist Analysis

Abstract: Introduction PART 1: HISTORICAL MATERIALISM: A THEORY OF ECONOMIC SYSTEMS A General Theory of Economic Systems A Theory of Capitalist Economic Systems PART 2: THEORISTS OF MODERN CAPITALISM ON THE DECLINE OF THE MARKET Marx and the Marxists on the Decline of the Market Neoclassicals, Keynesians and Heterodox Economists on the Decline of the Market PART 3: NEOLIBERALISM AND MODERN CAPITALISM Market Elimination in Modern Capitlism: Where the Theorists were Right The Return of the Market: Where They All Went Wrong PART 4: THE RISE AND DECLINE OF NEOLIBERALISM IN ADVANCED CAPITALISM Why Was Neoliberalism Delayed? What Might Reverse Neoliberalism?

Karl marx and the decline of the market

Abstract: Karl Marx is often and legitimately regarded as anticipating both the development of globalization and the corrosive effects market relations can have on other forms of economic and social organization. But he also used the principles of historical materialism to predict the long-term decline of the market. He identified five reasons for this decline: increasing economies of scale, and the ensuing centralization of industrial capital; the growing use of credit money and of joint-stock companies; the rise of cartels and trusts; expanding regulation of the market for labor power by the state; and the ever more pervasive role of scientific knowledge in production. Furthermore, Marx’s arguments were accepted without significant criticism by later social democratic and Communist theorists, and similar ideas featured prominently in the work of many non-Marxian economists who were sometimes indirectly influenced by Marx’s earlier analysis. In some respects they were all correct, but ultimately they were fundamentally mistaken, as the development of neoliberalism during the final third of the twentieth century attests.

News from down under

Abstract: Purpose – This brief paper seeks to identify three potential threats to the future of heterodox economics in Australia.Design/methodology/approach – The paper provides a case study of three potential threats to the future of heterodox economics in Australia.Findings – The first comes from funding uncertainties, given the fiscal conservatism of the new federal government. The second emanates from attempts by the elite “group of eight” institutions to secure all (or almost all) of the available research funding for themselves. The third relates to the research assessment exercises currently being undertaken both by the federal government and by the management of individual universities. It is concluded that the future is very far from clear.Originality/value – The paper provides a case study of three potential threats to the future of heterodox economics in Australia.

The Post Keynesian Assault on Orthodoxy: Insights from the Weintraub Archive

Abstract: Before the emergence of New Classical Economics in the late 1970s, and New Keynesian Economics in the following decade, there were three competing schools of thought in postwar macroeconomics. One, Monetarism, was avowedly anti-Keynesian. Based at the University of Chicago and led by the 1976 Nobel laureate Milton Friedman, Monetarism dovetailed neatly with the free-market microeconomics of his colleagues George Stigler (Nobel laureate 1982) and Gary Becker (Nobel laureate 1992). As the name suggests, the Monetarists defended the Quantity Theory of Money, which Keynes had dismissed. They warned of the inflationary dangers of any attempt to hold unemployment below its ‘natural’ rate, and advocated small government, balanced budgets and strict rules limiting the rate of growth of the money supply.

Reflections on the Long Australian Boom

Abstract: We begin by identifying three distinctively Australian characteristics of the long boom that began in 1992 and may (or may not) now be coming to an end. These are the minerals boom, the surprising robustness of the financial system, and the collapse of trade union power. However, since Australia is a small open economy, its performance must be assessed in the context of the global economy, so we next consider explanations of the rapid growth in world capitalism. In the third part of the paper we outline five ways in which the world boom might end, three of them drawing on aspects of Marx's writings on economic crises (the falling rate of profit, over-accumulation and underconsumption) and two coming from Post Keynesian theory (Hyman Minsky's financial instability hypothesis and Nicholas Kaldor's North-South model of global accumulation). We conclude by speculating on the implications for Australia, returning to the three distinctive features of the Australian boom with which we began. What is Distinctively Australian about the Long Australian Boom? Australia is more fully integrated into the world economy than it has ever been, and the fundamental causes of the 16-year Australian boom derive from the impressive (and very largely unexpected) success of global capitalism since 1992. None the less, there are local peculiarities. We begin by discussing three of them. We make no appeal to neoclassical ideas about cyclical fluctuations in their monetarist, new classical or 'real business cycle' versions because all omit the main (Marxian-Keynesian) point that crises involve effective demand failures. (However, we recognise that neoclassical ideas can be used in a different way to shed light on crises more generally, as we show in Howard and King 2001 and 2002). The Minerals Boom Unlike most OECD countries, Australia is a major exporter of primary products. The importance of the minerals boom, especially since 2000, is too obvious to need much emphasis. In Western Australia it has produced something close to full employment, for the first time in 35 years. Whether this reliance on exports of primary products is a healthy situation for an advanced capitalist economy to be in, and whether it is sustainable, are questions that we shall return to at the end of this paper. The Robust Financial System A second distinctively Australian phenomenon has been the quite surprising strength of the financial system, which few would have predicted at the time of the Pyramid and Tricontinental disasters in the late 1980s. The collapse of these companies caused great distress to individual depositors, in the first case, and to the careers of a number of Victorian Labor politicians, in the second case, but had no broader economic consequences. Even Westpac's near-death experience proved to be salutary rather than debilitating. Unlike, say, Japan or Sweden, asset price bubbles did not burst but instead deflated gradually, and there were no serious broader effects of the real estate slump of the early 1990s. Australia came through the East Asian financial crisis of 1996-7 unscathed, and even escaped the repercussions of the Wall Street 'correction' of 2000-1. It is not clear how far all this was the result of more sensible risk-management practices by the banks, combined with intelligent regulation by APRA and the Reserve Bank, and how far it was simply good luck. It was certainly a necessary condition--if far from sufficient--for the long Australian boom The Collapse of Australia Unionism The third distinctively Australian characteristic of the long boom once again took everyone by surprise. As little as 20 years ago the Australian labour market was tightly regulated and the ACTU was a major power in the land, effectively determining macroeconomic policy in alliance with the federal Labor government. Today unions count for very little. Union density peaked at 60% in 1951, and was still 49% in 1982 (Bray et al. …

Crank or proto-monetarist?: J. K. Gifford and the cost-push inflation fallacy.

Abstract: This paper examines the career and contribution of J. K. Gifford (1899–1987), the Foundation Professor of Economics and first Head of the Department of Economics at the University of Queensland, and one of the first in Australia to write an introductory textbook. Gifford’s publications were often poorly written and with few references. They focussed mainly on monetary theory and inflation and towards the end of his career concentrated on challenging the notion of a wage-price spiral. Much of his work on the ‘cost-push fallacy’ seems to have been based on a crude kind of monetarist thinking: governments were prone to allow monetary growth to sustain high profit levels that businesses enjoyed in an inflationary environment. However, his policy proposals were not those of the freemarket Right and focussed on safeguarding employees’ interests by ensuring that their wages increased at the rate of inflation plus productivity growth, thereby limiting the scope for employers to benefit from inflation. Although he...

Josef Steindl and the Instability of Capitalism

Abstract: Josef Steindl's first substantive publication was a nine-page review of Roy Harrod's book The Trade Cycle (1936), which appeared in the June 1937 issue of the Austrian journal, Zeitschrift fur Nationalokonomie. The review reveals the Austrian – or, as he put it, the neo-Wicksellian – roots of Steindl's early macroeconomic thinking. It also contains the first mathematical formulation of what would later be known as the (Hicks) super-multiplier. In this paper I summarise Steindl's critique of Harrod, comparing his analysis of the multiplier-interaction with that of several contemporaries. A translation of his review is given in the paper that follows.