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  5. Complex Evolutionary Challenges in the Face of Economic and Social Transition: Development, Energy and Organizations
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Complex Evolutionary Challenges in the Face of Economic and Social Transition: Development, Energy and Organizations

Paper Session

Saturday, Jan. 6, 2024 8:00 AM - 10:00 AM (CST)

Marriott Riverwalk, Bonham
Hosted By: Association for Evolutionary Economics
  • Chair: Lynne Chester, University of Sydney

Alternative Financing for a Sustainable Energy Transition beyond the Market-Led Options

Andrea Almawi
,
Grenoble Alpes University
Faruk Ülgen
,
Grenoble Alpes University

Abstract

Over the course of history, societies have undergone transitions in energy use in response to changes in the economic and technological landscape. Today, reducing greenhouse gas emissions to mitigate climate change is one of the world's most pressing challenges. The energy transition plays a crucial role in achieving this goal by shifting towards renewable energy sources. Hence, the current challenges are unique as they primarily result from irreversible environmental degradation. The prevailing mode of economic accumulation, which prioritizes private-interest-driven efficiency criteria in a capitalist economy or under state control in a socialist economy, is largely responsible for this situation. Consequently, the energy transition should not be viewed as an opportunity to enhance accumulation dynamics mired in systemic crises since the 1970s but rather as a necessary step toward ensuring the viability and sustainability of life and societies on Earth.
To achieve such a radical economic and political transformation, there needs to be a shift from market incentives that provide new opportunities for private interests to policies that promote societal sustainability and encourage individuals to adopt environmentally friendly strategies. Such radical economic and political changes require the development of sustainable and stable financing models that go beyond market-driven, short-sighted financial innovations, which frequently result in systemic crises. The transition must be viewed as a matter of public good and accompanied by a well-structured financial infrastructure that prevents speculative finance from dominating new technological and economic developments. In addition, comprehensive regulatory frameworks that are consistent with the energy transition's long-term needs must be designed and implemented on a global scale through coherent international cooperation that is free of national and local interests.

Energy Injustices and the Energy Transition

Lynne Chester
,
University of Sydney

Abstract

Discourses about energy transitioning—from a high reliance on electricity generated by fossil fuel-based systems to greater penetration of renewable energy sources—are dominated by techno-centrism. Technological solutions are advanced to accelerate the take-up of renewal energy sources and corresponding infrastructure transformation that will, purportedly, reduce emissions, mitigate climate change, and limit global temperature increases despite technologies being the longstanding primary driver of the world’s environmental problems. Techno-centrism eviscerates the use of energy from its embeddedness in social reality, its production and consumption driven by the imperative of accumulation creating a parasitic relation with the environment and actualised by capitalism’s social relations. Consequently, techno-centric solutions are not inherently designed to address the unequal and inequitable consequences of their application. Nor will these solutions address the existing widespread inequities—energy injustices—across the energy continuum from production to distribution to consumption that are generated and exacerbated by the continuous restructuring of energy provisioning regimes through the policies and actions of contemporary neoliberal states.
This paper explores the prevalence and genesis of contemporary energy injustices, the potentiality for these to be intensified—and new ones incarnated—as nation-states take actions to ostensibly meet commitments to an energy transition accelerating the use of renewable energy sources and emissions reductions, and the opportunity that the energy transition presents for a more ‘just society’.

Silencing the Sirens: The Odyssey of PKI in Revitalizing Capital Accumulation in Ukraine’s Post-War Economy

Anna Klimina
,
University of Saskatchewan

Abstract

The focus of the paper is to illuminate the potential contribution of Post-Keynesian Institutionalism (PKI) scholarship, especially in its Kaleckian complexion, to the debate concerning the progressive rebuilding of Ukraine’s post-war economy. In particular, the paper outlines PKI approach to financing Ukraine’s economic growth at a time when Ukraine, having lost 60% of its industrial potential due to Russia’s war of aggression, needs to restore its productive capacity and re-establish accumulation of capital on humane terms in order to secure a sustainable and fair path to its economic future. For emerging market economies, similar to the Ukrainian, IMF and Word Bank and associated neoliberal think-tanks customarily promote foreign capital as the primary engine of economic growth indispensable for building “business-friendly” institutions. Thus, neoliberal conditionality is attached to IMF/WB loan agreements with Ukraine, which signifies a danger that Ukraine will sail at full speed into the rocks of Mont Pèlerinian liberalism of the Reagan-Thatcher era.In contrast to the standard neoliberal position, this paper foregrounds “people first” voices, and probes for PKI insights concerning processes of capital accumulation and distribution in industrial capitalism. In particular, the paper proposes to revisit Kalecki’s growth theory, especially as he applied it to the analysis of capital accumulation in less economically-developed countries.

Power and Organizational Challenges in the Face of Transition Process and AI Implementation in Industry 4.0 Firms

Orest Firsov
,
Grenoble Alpes University

Abstract

This article focuses on the question of power in the organization of manufacturing firms transitioning towards Industry 4.0 and applies the perspective of the firm as a power-based entity to examine the effects of AI on the transition process. Since the rapid development of AI over the last ten years, driven especially by research in machine learning and deep neural networks, as well as general progress in IT and various production techniques, the industrial firms have been confronted with a series of potential technological implementations which promise important gains in productivity. These changes are often collectively grouped under concepts like Industry 4.0, factories of the future, industry of the future, etc. With regards to the analysis addressed on the firm level, the concepts of the Algorithmic enterprise, the Artificially Intelligent firm and others are used. In order to properly understand the impact of AI on the organization of firms, this article sheds an economic perspective onto the organizational dynamics of knowledge-intensive industrial manufacturing firms that use AI-enabled technologies in their operations. The analysis is focused on the impact that the implementation of AI has on the changes in the firm’s hierarchy and decision-making structure. As AI relates to human augmentation and displacement, the stress is put on the nature of tasks considered and how it integrates the organizational routines of the firm. The dependency of the firm on its dynamic capabilities leads to a redistribution of power both inside the firm and across the production network.

Financialization as a Cause of Structural Violence – The Case of EU ETS

Mateusz Racławski
,
Jagiellonian University

Abstract

Structural violence is a theoretical framework created by Johan Galtung (1969), which is aimed at identifying cases of violence, where the wellbeing of people is decreased, but the violence arises from a social or economic structure. This paper critically analyzes the relationship between financialization and structural violence. The case chosen for such analysis is the European Union Emissions Trading System (EU ETS). The paper summarises the state of knowledge on the financial nature of the EU ETS and situates the operation of the system within the theory of structural violence. Many scientists explored the consequences of financialization and its effect on healthcare, education or other spheres of social life (e.g., Aalbers 2008; Carruthers 2015; Krippner 2005). This paper, however, analyses the financialization of climate change mitigation. First, it examines the EU ETS and its non-financial alternatives, exploring the advantages and disadvantages of market-based mechanisms for emissions reduction as well as its normative and ethical ramifications. Second, it analyzes the role of financial agents and speculation on the secondary EU ETS market. EUA spot prices have surged in 2018 and some observers fear that financial agents may pose a risk to the stability of EU ETS market. Finally, the paper investigates planned emissions reduction in the EU ETS sector and the whole of EU with the help of fairness criteria. While emissions reduction in the EU ETS sector stem from political decisions, analyzing emissions reductions plans helps putting first two issues in the context of EU’s climate ambitions.

SDGs, Change of Techniques and Welfare Impact

Massimo Cingolani
,
European Investment Bank

Abstract

The impact of technological change is to sustain the dynamics of long-term relative price movements, particularly for what concerns the wage-profit distribution. As a first approximation, technical change can be seen as an exogenous factor of relative price dynamics, as it is the case for the structural dynamics modelled in detail by Pasinetti (1981). Alternatively, and as a second approximation, technical change can be seen as a dialectic process, with endogenously fed feedback reactions to the prospects offered in each period by the existing relative prices, as it is sketched in Sylos Labini (1988 and 1995/1996), who retains Pasinetti's approach as a valid and useful first approximation. In so far as the realisation of the Sustainable Development Goals implies an overall change in the society's technology towards a more sustainable production and distribution of value added at world level, realizing them implies ultimately renewing potentially the whole of the world's capital stock, whose value can be estimated as being of the order 2.5-3.5, maybe 4 times world's GDP, while also renewing the non-physical elements of capital that enter in the overall social fabric matrix. Rather than a problem in the choice of techniques, the issue of SDG realisation is thus problem in the change of techniques that is intrinsically linked to the dynamics of relative and absolute prices. Against this background, from a programming/planning viewpoint, the problem is that of the political/social choice of accounting or shadow prices (both absolute and relative) that could trigger the required decentralisation of socially useful investment at world level, disincentivising harmful and non-sustainable investment while keeping overall activity at socially sustainable levels. Without providing on overall solution to this difficult problem, the paper provides several carefully thought and hopefully useful rational arguments in support of this line of thought.
JEL Classifications
  • B5 - Current Heterodox Approaches
  • Q4 - Energy