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Contemporary Challenges: East and West

Paper Session

Sunday, Jan. 7, 2018 8:00 AM - 10:00 AM

Loews Philadelphia, Congress C
Hosted By: Association for Evolutionary Economics
  • Chair: Baban Hasnat, State University of New York-Brockport

An Empirical Institutionalist Analysis of the Determinants of Income and Wealth Inequality in USA Since the 1980s

Hanna Szymborska
University of Leeds


The aim of this paper is to explore the link between financial sector liberalisation and inequality through the institutionalist perspective. By explicitly integrating the real and financial sectors of the economy, the paper argues that financial deregulation, innovation, and broader liberalisation measures in the US economy shaped differences in the structure of wealth holdings among households. This has influenced inequality by generating unequal rates of return on wealth and disparate degrees of financial fragility across the distribution, and had a clear intersectional dimension. Using data from the US Survey of Consumer Finances between 1989 and 2013, we decompose wealth and income inequality by gender, race, and generational groups to analyse which types of assets and debt have contributed to the rising intersectional monetary disparities. We find that ownership of assets, specifically property, retirement, and low-yielding financial wealth, contributed more to wealth inequality across gender, race, and generations than debt. Wage inequality and disparities in retirement income are found to have the greatest contribution to income inequality but the impact of disparities in retirement inbusiness equity, and other property, which are all concentrated among the rich, have contributed to the polarisation of wealth and income in the period studied.

Income Polarization of the United States Working Class: An Institutionalist View

Kosta Josifidis
University of Novi Sad
Novica Supic
University of Novi Sad


This paper provides an institutional insight into growing trend of income polarization of the U.S. working class since 1980’s. In contrast to the previous industrial waves, the ongoing industrial revolution is characterized by replacement of “creative destruction” with “jobless growth”. Instead to replace the lost jobs with the new ones, new disruptive technologies eliminate more jobs in traditional labour- and capital- intensive sectors than create jobs in new idea-intensive sectors. By examining the relationship between income shares and technological progress, we obtain robust econometric results according to which income polarization of the U.S. workers is strongly positively associated with concentration of innovations by corporate capital. "Incredible productivity" of innovations reduces the dependence of modern society on scarce natural resources and creates conditions for a shift from a “society of scarcity” to a “society of abundance”. However, the concentration of innovations by corporate capital limits the power of society to reduce inequality and provide greater social stability through technological progress. Consequently, the rigidity of “distribution arrangements” could be explained by the growth of power and discretion of corporate capital compared to „the common man“, government's fear that regulations could be put above innovations, but also by a shift of distribution conflict from functional to personal income distribution. Income polarization between capital owners and workers tends to be replaced with polarization between workers in traditional sectors and workers in new sectors of the economy.

The “Forgotten Lands”: An Institutional Analysis of Post-Soviet Transitions

Mila Malyshava
University of Missouri-Kansas City


This inquiry seeks to provide a heterodox critique to an analysis of the post-soviet transition, drawing on the theoretical concepts of Institutional, Post-Keynesian and Structuralist approaches. It demonstrates that: an absence of a thorough institutional analysis, unrealistic marketization programs which relied heavily on traditional neoliberal economic principles, conflicting ideological perceptions for the role of the state, and persistent systemic problems of state planning all have constituted significant constraints to the transition away from the soviet style state organization of production and distribution. Preserving the soviet mode of production inevitably led to a fundamentally flawed policy approach and guided former Soviet bloc towards an unproductive and damaging path-dependence. This path-dependence contributed to retarding the process of cumulative causation and capped the influx to the joint stock of knowledge, both of which remain crucial for progressive institutional adjustment.

An Institutionalist Exposé of Putinists’ Ménage a Trois of Leftism, Nationalism and Authoritarianism

Anna Klimina
University of Saskatchewan


The paper addresses the so-far unrecognized challenge – for institutionalists – of dealing with Russia’s current abuse of well-deserved heterodox criticism of mainstream economics with its neoliberal policies. To capture allies among Western progressive scholars, Putin’s regime has presented its rising nationalism and authoritarianism as a left-wing response to global neoliberalism and a manifestation of Multipolarity. The danger of this process lies in its ability to give Russia a veneer of international respectability. Through such deceptive left-wing rhetoric, international heterodox associations are drawn unwittingly into endorsing Putin’s authoritarian and imperious practices. Meanwhile, Russia itself remains deeply elitist with substantial and rising inequality, disregarding civil rights, trade unions, feminist and green movements.
In Russian economics, nationalist scholars, who are heavily promoted by the current regime and are the most active within the international heterodox community, have misappropriated the institutionalist emphasis on culture, history, and the activist state. Their purpose is to justify Russia’s inherited—and continued—non-democratic institutions and attitudes by explaining that Russia, by its culture and history, is predestined to be an autocratic “state-centered” civilization, thus rendering futile any attempts at its democratization.
At present, the authoritarian and nationalistic views of Putin’s regime draw criticism mainly from mainstream economics. Since Putin’s apologists primarily favour a distorted institutionalism to support their message, a genuinely institutionalist critique is essential. The paper responds by exposing an unbridgeable gap between the institutionalist understanding of culture, the state, economic and political democracy, and human agency and Russia’s current appropriations of institutionalist terminology for narrow ideological purposes.

The Death and Revival of Usury in China in View of Institutional Change

Hao Cheng
Nanchang University


The research is inspired by a recently widespread case caused by usury in Shandong, China. A young man killed a usury debt collector and is pleading innocent in second trial for justifiable defense. This case has caused the legitimation of usury under hot debate. Literature shows that many claim it illegal or even criminal while some elites defend it with fine study and furtherly claim legal standing for usury. The institutional competition between modern money and banking system and ancient usury have last for centuries since the Bank of England started cheap lending against usury. This paper overviews the history of usury in China, especially its death in the former 30 years before 1978, and its revive after that and analyses the reasons in view of institutional changes. After 1978, almost all those used proletarians have acquired and/or accumulated certain private property such as home and deposit. This has provided the requisition for usury to revive. Liberalization of finance since 1990s allows private finance growing in all kinds, many of which are usurious in nature, and some are funded with credit money from banks. Now the banking industry is attacked for credit rationing, rent seeking and poor services with expensive fees. On the other hand, the private financial crisis has emerged in places such as Wenzhou where usury business prevail. Usury functions to speed up the social splitting into rival classes. As the inequality of income and wealth increase to some point, usury must be prohibited strictly again.
Barbara E. Hopkins
Wright State University
JEL Classifications
  • H0 - General
  • B5 - Current Heterodox Approaches