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Public Policy toward Business

Paper Session

Sunday, Jan. 5, 2020 1:00 PM - 3:00 PM (PST)

Manchester Grand Hyatt, Cortez Hill A
Hosted By: Association for Evolutionary Economics
  • Chair: Richard Adkisson, New Mexico State University

Innovation and Income Inequality in the United States of America: Ceremonial Versus Institutional Adjustment

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

Abstract

This paper investigates the distributive effects of technological progress in the United States during the last four decades. The result of our econometric analysis reveals that the shift in R&D investment from the public to the private sector was associated with an increase in income share of the richer classes at the expense of the poorer income classes. Taking an institutionalist perspective, these findings can be explained by ceremonial encapsulation of innovation by corporate capital that slows the pace of social progress. In this context, diffusion of innovation may be treated as a progressive institutional change.

Automation, Financialization, and Institutional Change: Challenges for Progressive Industrial Policy

Avraham Izhar Baranes
,
Elmhurst College

Abstract

This paper argues that the fears over the “dangers” of automation result primarily from the ways in which the new technologies are used in the context of financialization. In other words, automation currently is used in ways that promote and benefit the interests of shareholders through “labor-saving” cost reductions at the expense of workers who are replaced. However, I argue here that these downsides should be seen as the result of ceremonial encapsulation within the process of institutional adjustment. Combining the arguments made by Foster (1981), Bush (1987; 1989), Serfati (2008), and Lazonick (2010), I argue that the view of automation as problematic depends upon a financialized economy, in which the ownership of such technology dictates the distribution of income and such ownership is concentrated in the hands of shareholders. In other words, rather than generate social benefits, automation combined with financialization increases income and wealth inequality, harms the position of labor in the economy, and reinforces the dominant position of the shareholder interests. The purpose of this paper, then, is two-fold. First, I will discuss the way in which we can use the process of institutional adjustment described by Foster (1981) and Bush (1987) to understand the debates and fears surrounding automation, emphasizing the role that ceremonial encapsulation plays in this debate. Second, I discuss the role that progressive policy has in ensuring that this process of institutional adjustment is smooth. Key to this discussion is the altering the relationship between distribution and ownership, and how neoclassical economics emphasis on marginal productivity theory prevents necessary progressive institutional adjustment from occurring. Overall, the paper provides an important step in explaining how automation is only an early step in the process of institutional adjustment and that the problems associated with it result from ceremonial encapsulation. With proper economic theory and policy, however, automation should be seen as a welcome change.

From Regulation to Deregulation: Old Institutionalist Versus Chicago School Views of Law and Economics

Matías Vernengo
,
Bucknell University

Abstract

The Progressive Era saw a significant effort to regulate the so-called Cartels, and many Old Institutionalists were associated to the efforts to curb corporate power and the establishment of regulatory agencies. The administrative state that resulted from the Progressive and New Deal eras was built on the foundations of a mix of Institutionalist and Keynesian ideas about how markets formed and behaved. That consensus was challenged by a set of scholars that coalesced at Chicago and are often seen as the pioneers of the field of law and economics. In particular, the focus of Chicago scholars was the notion that regulatory capture weakened the case for regulation, and that government intervention was not required even in the presence of market failures, since government failures were even worse. The Coase Theorem, in particular, reinforced the idea that only secure property rights were required for efficient market solutions. This paper explores the ways in which Old Institutionalists that were instrumental in the rise of the administrative or regulatory state were aware of the power of corporations to influence regulators, and how they envisaged a more dynamic regulatory environment. It also traces back the differences between Institutionalist views of laws and regulations to a different conception of markets.

From Mad to Mindful: Corporate Control through Corporate Mindfulness

Mary V. Wrenn
,
University of West England

Abstract

Capitalism has always and will always depend on a compliant workforce. Maintaining the delicate balance between a worker who is just ‘not-unhappy’ enough or desperate enough to continue working while also cutting costs to the bone presents a continuous challenge for business interests. This pursuit to squeeze more productivity out of workers while also managing worker discontent in the cheapest way possible has spawned innovations in labor management which reflect the institutional milieu of the respective time. This research focuses on those labor management techniques particular to neoliberalism and the ways in which cultural movements and trends of the neoliberal period are mined and deployed as yet another useful resource in the disciplining of workers. Corporate mindfulness is the favorite labor management technique of the neoliberal period. The formalization of packaging of corporate mindfulness began in the late 1970s, but was built on a long tradition of attempts to hack the minds and mind-sets of workers. Corporate mindfulness reinforces neoliberalism through the corporate individual, the transformation of the self of the corporate individual, and the creation of the corporation as a community and means of social connection for the corporate individual.

Will the Green Kondratieff Wave be Stillborn?

Christopher Brown
,
Arkansas State University

Abstract

Green innovation, to the extent it would catalyze a structural transformation in energy, transportation, manufacturing, agriculture, and construction, holds the potential to bring forth a secular growth wave, or Kondratieff. This paper will assess the prospects of a green Kondratieff, with emphasis on the following issues: (1) Does the U.S. venture capital system possess the capability to achieve a granular reconfiguration of the economy around green innovation? (2) Do intellectual property rights need to evolve in light of the fact that green innovation is cumulative and often involves the synthesis of proprietary knowledge?; and (3) Will the green Kondratieff wave be stillborn due to the continued political dominance of carbon-based industries?
Discussant(s)
Richard Adkisson
,
New Mexico State University
Anna Kilimna
,
University of Saskatchewan
JEL Classifications
  • L1 - Market Structure, Firm Strategy, and Market Performance
  • B5 - Current Heterodox Approaches