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Crises, Instabilities, and Upheavals

Paper Session

Saturday, Jan. 8, 2022 10:00 AM - 12:00 PM (EST)

Hosted By: Association for Evolutionary Economics
  • Chair: Steven Pressman, Monmouth University

Economic Crises and Women’s Experiences in the United States

Janice Peterson
,
California State University-Fresno

Abstract

In the intellectual tradition of Thorsten Veblen, the status of women provides insight into the value systems dominant in society. Taking this perspective as a starting point, this paper asks: What do we learn about U.S. society when we examine the two major economic crisis of the 21st century – the Great Recession and the COVID-19 Recession – through women’s experiences?

This paper will begin by examining women’s experiences in these two economic crises through the lens of gender, as both crises were quickly “gendered” in popular discussions. The Great Recession was often referred to as the “Great Man-cession,” and the COVID-19 recession is currently characterized by many as a “She-cession” – reflecting in each case a particular pattern of gender differences (“gaps”) in unemployment rates. Feminist institutionalism - grounded in the concept of culture and focused on the influence of cultural patterns and constructions in social provisioning processes - provides a useful framework for such an examination. This approach draws attention to the significance of women’s continuing responsibilities for unpaid work in the home and community, even as their participation paid work has increased, as well as the inadequacy of necessary care infrastructure. In addition, when addressing the adequacy of social provisioning processes, feminist institutionalism seeks a multi-dimensional analysis of inequality. This calls for examinations of women’s experiences through additional lenses of significance for women, particularly those of race and ethnicity, and income level. This approach draws attention to different forms of inequality across women, and the complex web of inequality facing many women that calls for a multi-faceted policy response.

Income Distribution, Bargaining Power, and Structural Change in Developed Economies

Carlos Aguiar de Medeiros
,
Federal University of Rio de Janeiro
Nicholas Miller Trebat
,
Federal University of Rio de Janeiro

Abstract

This paper discusses trends in employment and income distribution in developed economies over the past two decades. We argue, based on classical political economy and the power resources approach, that the key factor behind the increasing wage and income inequality of this period was the decline in workers’ bargaining power., rather than globalization or technical change in themselves.

Business strategy in the neoliberal era, focused on outsourcing and the relocation of production facilities domestically and abroad, was partly a response to new technologies, but it was also a response to new opportunities opened up by political developments, such as the collapse of the Soviet Union. In the eyes of capital, these transformations rendered unnecessary key institutions of postwar capitalism, including not only labor laws and low levels of unemployment, but also large factories and vertical production systems.

Giant factories, the cradle of militant labor activism in the 20th century, were not simply a technical solution for generating scale economies, but a coercive device permitting great control over production and the workforce. Globalization and improvements in automation and ICT allowed corporations to maintain this hierarchical control without the costs and risks associated with uniting thousands of workers in a single place. This made it easier to segment the workforce into well-paid employees with benefits and low-wage workers with few substantive or even legal connections to the companies for whom they work. The impact of such segmentation on working class cohesion and ideology has been a major triumph for capital in the neoliberal era.

The result has been an expansion of precarious employment in services without social protection or job mobility. A high incidence of working poor, always a structural feature of underdeveloped countries, has become a standard feature of industrialized economies as well.

Alternative Economic Paradigms to the Greek Financial Crisis

John Marangos
,
University of Macedonia

Abstract

Different views on ‘social reality’ and ‘what is a good society?’ are associated with distinct paradigms and a particular set of social values, which have implications for economic policy formulae. This gives rise to alternative answers and policies to the Greek Financial Crisis, based on different assumptions, different methods of analysis, and different goals. The purpose of the paper is to discover contradistinctions between the neoclassical and the Keynesian paradigms of economics regarding the Greek Financial Crisis. Students of the global financial crisis will benefit from this unique approach in testing the two alternative paradigms concerning the Greek Financial Crisis. Overall, while the two paradigms recommend quite distinct policies tackling the Greek Financial Crisis, in contradistinction, both paradigms have different perspectives on moralistic fundamentals.

Recessions and Policy Responses in the United States à la Kalecki

Erdogan Bakir
,
Bucknell University
Al Campbell
,
University of Utah

Abstract

The paper explores the dynamics of the U.S. recessions and the goals of the stabilization policies in the framework of Kaleckian profit. The paper is focused on the post-1980 U.S. recessions, although a comparison with the recessions of the Golden Age is also made to better understand the policy shifts regarding the tools of the stabilization policies.

After having determined the phases of the U.S. business cycles based on the movement of the profit rate, the paper investigates the changes in the components of the Kaleckian profit before and during the U.S. recessions, in order to determine which factors dominate its movement. The paper then goes on to consider what a number of particular aspects of the neoliberal form of U.S. capitalism have contributed to the determination of the observed trends in the profit and its components, namely the retreat of the working class and the rise of the managerial class, financialization, and globalization.

Policy responses are discussed within the same Kaleckian profit framework. As the goal of stabilization policies in the Kaleckian business cycle context is the stabilization of the profit, this paper discusses how well the government’s fiscal and monetary stabilization policies have achieved their goal.

MMT or Public Enterprises: A Solution for Economic Sustainability

Brian Lin
,
National Chengchi University

Abstract

Modern Monetary Theory (MMT) has increasingly attracted public attention for instrumentally resolving economic instabilities and financial crises in the US. According to MMT, modern governments actually finance their spending primarily through the creation of high-powered money rather than from the proceeds of taxation and bond sales. According to MMT advocates, it is essential to take a fundamentally different vision of government finance and fiscal policy for the determination of money supply. Although MMT has stimulated interesting analyses and public discussions, this article argues that the policy recommendation drawn from MMT cannot meet the policy targets of sustainable employment and growth. In this regard, this article uses several practical cases including a hypothetical tax-free society to show the institutional rigidities of MMT. Like the concept and creation of money, public enterprises are not new in modern history. Unfortunately, public enterprises have been widely treated inefficient institutions and become obsolete in advanced economies. This article shows that public enterprises, socio-economic organizations wholly or partly owned by the local or central government, are a pragmatic antidote for existing economic crises. That is, people have the right to work at public enterprises for meeting their individual and common interests. The re-consideration of public enterprises into original institutional analysis, if successful, is more a timely creation of advanced institutions for sustaining worldwide economies than a politico-economic phenomenon like the MMT spotlight. Economic crises have frequently led many small and medium-sized businesses going bankrupt. This article also shows that, during hard times of major crises, it would be far better for a country to adopt a decisive policy of nationalizing private companies with financial difficulties instead of issuing more money for the unemployed.

A Black-Swan Shock Exposes the Deep Fissures, Endemic Imbalances, and Structural Weaknesses of the United States Economy

John Komlos
,
University of Munich

Abstract

The commonplace idiom, attributed to the legendary investor, Warren Buffett, “It’s only when the tide goes out that you learn who’s been swimming naked,” is appropriate in our time, for the Covid pandemic found the U.S., as well as much of the world, swimming naked, i.e., unprepared to meet the challenges posed by the pandemic. To be sure, Buffett’s was referring figuratively to ordinary business cycles but in the 21st century it seems like these have morphed into black-swan cycles, inasmuch as the ordinary inventory cycles, trade cycles, or demographic cycles have vaned in relevance and have been overtaken by low-probability extremely high impact shocks that are often referred to using the metaphor of a “black swan” (Taleb, 2007). Yet, in the 21st century U.S. such low-probability disasters have been appearing with uncanny frequency: the Dot-Com bubble, 9/11, the Meltdown of 2008, and then the coronavirus pandemic. Hence, economists should take the threats such shocks pose much more seriously than in the past and explore ways to create a black-swan robust socio-economic system in which we would be less vulnerable to their devastating impact.

This paper focuses on how labor, stratified by ethnicity, fared during the Covid recession. However, first we examine the nature of the economy prior to the recession in order to reveal that the pandemic struck an economy that was already out of equilibrium and therefore vulnerable. This was not an inclusive economy in which all could work in decent jobs who wanted to work. This was not an economy with ample savings and with deep safety nets in case of a downturn. Instead, it was an economy in which hubris was so widespread that planning for a rainy day appeared unreasonable. In short, the depth of the recession is indicative of the economy’s fragility.
JEL Classifications
  • B5 - Current Heterodox Approaches
  • E0 - General