Political Economy and Contemporary Capitalism: Radical Perspectives on Economic Theory and Policy

365 Pages·2000·30.01 MB·English

by  Ron P. Baiman, Heather Boushey, Dawn Saunders

I IC L
C MY
C T 0 A Y
A ITALI
A
T
I I
RADICAL PERSPECTIVES
ON ECONOMIC THEORY
AND POLICY
RON AlMAN
EATHER OUSHEY
AVVN SAUNDERS
DITORS
c§v.I.E. Sharpe
Armonk, New York
London, England
Copyright © 2000 by M. E. Sharpe, Inc.
All rights reserved. No part of this book may be reproduced in any form
without written permission from the publisher, M. E. Sharpe, Jnc.,
80 Business Park Drive, Armonk, New York 10 504.
Library of Congress Cataloging-in-Publication Data
Political economy and contemporary capitalism : radical perspectives on economic
theory and policy I Ron Baiman, Heather Boushey, and Dawn Saunders, editors.
p. em.
Includes bibliographical references and index.
ISBN 0-7656-0529-5 (he. : alk. paper) ISBN 0-7656-0530-9 (pbk. : alk. paper)
1. Economics. 2. Capitalism. I. Baiman, Ron, 1951-II. Boushey, Heather, 1970-III.
Saunders, Dawn, 1955-
HB7l.P654 2000
330-dc21 99-047226
Printed in the United States of America
The paper used in this publication meets the minimum requirements of
American National Standard for Information Sciences
Permanence of Paper for Printed Library Materials,
ANSI Z 39.48-1984.
BM (c) 10 9 8 7 6 5 4 3
BM (p) 10 9 8 7 6 5 4 3
Contents
List of Figures, Tables, and Boxes IX
Preface xiii
Acknowledgments XV
1. Introduction: Political Economy Today, Political Economy Tomorrow
Dawn Saunders 3
SECTION I. CONCEPTUAL APPROACHES TO POLITICAL ECONOMY 11
2. A Primer in Political Economy
Bruce Pietrykowski 13
3. The Methodology of Radical Political Economics
Mathieu Carlson 21
4. Feminist Political Economy: A Primer
Ellen Mutari 29
5. Class and Evolution: An Institutionalist View
William M Dugger 36
6. Class and Evolution: A Marxian View
Howard J. Sherman 42
7. Beyond Racist Capitalist Patriarchal Economics: Growing a Liberated Economy
Julie Matthaei 48
vi CONTENTS
SECTION II. CAPITALISM'S DYNAMIC PATH: ACCUMULATION AND
THE RATE OF PROFIT 57
8. The Rate ofProfit and Stagnation in the U.S. Economy
Fred Moseley 59
9. The Global Relevance of Marxian Crisis Theory
Jonathan P. Goldstein 68
10. Long Waves of Capitalist Development and the Future of Capitalism
Ismael Hossein-Zadeh 78
11. On Transformational Growth: Interview with Edward J. Nell
Edward J. Nell and Steven Pressman 86
SECTION III. HOW WE LIVE: EMPLOYMENT, LABOR, AND INCOME DISTRIBUTION 93
12. The "Reserve Army of Labor" and the "Natural Rate of Unemployment":
Can Marx, Kalecki, Friedman, and Wall Street All Be Wrong?
Robert PolZin 95
13. The Political Economy of Employment Inequality: Job Access and Pay Differentials
Heather Boushey 104
14. Falling Wages, Widening Gaps: U.S. Income Distribution at the Millennium
Chris Tilly 114
15. Single, with Children: The Economic Plight of Single Mothers
Randy Albelda and Chris Tilly 124
16. U.S. Labor Faces an Identity Crisis
George DeMartino 130
SECTION IV. EXAMINING MONEY: FINANCE AND INFLATION 137
17. The Role of Credit and Commercial Banks in the Creation of Money: A Post-Keynesian
Interpretation in the Circuitist Tradition
Louis-Philippe Rochon 139
18. Hidden Inflation: An Estimate of the Cost-of-Living Inflation Rate
Jim Devine 149
CONTENTS vii
19. The P-R-I-C-E of Full Employment in Monopoly Capitalism
Elmer P. Chase III 158
20. The Promise of Finance: Banks and Community Development
Carole Biewener 166
SECTION V. THE GLOBAL POLITICAL ECONOMY 175
21. What Do Undergrads Really Need to Know About Trade and Finance?
Matias Vernengo 177
22. The Rate of Profit in the Postwar Mexican Economy, 1950-1993
Abelardo Marina and Fred Moseley 184
23. Globalization, Technology, and Skill Formation in Capitalism
Cyrus Bina and Chuck Davis 193
24. Capitalism and Industrialization in the Third World: Recognizing the Costs
and Imagining Alternatives
David F. Ruccio 203
25. Lessons from Economic Transition in Russia and China
DavidM Kotz 210
26. The Asian Financial Crisis: What Went Wrong?
Ilene Grabel 218
27. The Roots of the Asian Financial Crisis: A Story of Export-Led Growth
and Liberalized Capital Flows
Stephanie Seguino 225
28. Mainstream Responses to the East Asian Crisis: A Radical Interpretation
Martin Hart-Landsberg and Paul Burkett 236
SECTION VI. EXPLORING POLICY QUESTIONS:
THEORY AND APPLICATIONS 245
29. The Rise and Fall of the U.S. Welfare State
Anwar M Shaikh and E. Ahmet Tonak 247
30. Five Easy Pieces on the Economics of Tax Justice
Max B. Sawicky 266
31. Why the Emperor Has No Clothes: The Neoclassical Case for Price Regulation
RonBaiman 275
32. Broadening the Concept of Pay Equity: Lessons for a Changing Economy
Deborah M Figart and Heidi I. Hartmann 285
viii CONTENTS
33. The Earned Income Tax Credit: What It Does and Doesn't Do
Robert Cherry and Gertrude Schaffner Goldberg 294
34. Empty Bellies, Empty Promises: Welfare "Reform" in the Nineties
Kimberly Christensen 302
35. The U.S. Health Care System: A Reproduction Crisis
Jerome Joffe 312
36. The Political Economy of Social Security Reform in the United States
Teresa Ghilarducci 321
Index 331
About the Editors and Contributors 347
List of Figures, Tables, and Boxes
Figures
13.1 Unemployment by Race and Gender 108
14.1 Losing Ground: Average Hourly Wage and Household Income,
Adjusted for Inflation, 1959-1998 116
14.2 Trickle Up: Shares of Total U.S. Income Received by Families
at Different Income Levels, Selected Years 1967-1997 118
14.3 Persistent Gaps: Median Annual Household Income by Race
and Ethnicity, 1972-1996 120
17.1 The Neoclassical Money Market 142
17.2 The Post-Keynesian Credit Market 146
18.1 Private Sector Real Wages 154
27.1 Current Account Deficit as Percentage of GDP 228
27.2 Growth Rates of Real GDP 231
27.3 Real Wage and Unemployment Trends in Korea, Pre- and Post-Crisis 233
29.1 Labor Benefits and Taxes 251
29.2 Labor Benefit and Tax Ratios and the Unemployment Rate 252
29.3 Net Social Wage Ratio 253
ix
X LIST OF FIGURES, TABLES, AND BOXES
29.4 Apparent and True Real Wage 253
29.5 Net Social Wage and Deficit Relative to Employee Compensation 255
30.1 Income Taxation and the Size of Government 269
31.1 Consumer Surplus Loss from Price Increases for
High- and Low-Elasticity Markets 279
31.2 Profit Gain from Price Increases for High- and Low-Elasticity Markets 281
Tables
8.1 The Rate of Profit and Its Marxian Determinants, 1947-1977 63
8.2 The Rate ofProfit and Its Marxian Determinants, 1975-1994 64
9.1 Measures of Income Distribution 73
9.2 Consumption, Capacity Utilization, and Exports 74
13.1 Wage Curve by Demographic Group, 1991 110
13.2 Wage Curve by Demographic Group, 1996 110
13.3 Wage Curve with Unemployment by Demographic Group, 1991 112
13.4 Wage Curve with Unemployment by Demographic Group, 1996 112
14.1 Poor, Poorer, Poorest: Percentage of Families in Poverty,
by Race, Ethnicity, and Family Type, 1997 121
18.1 The Genuine Progress Indicator 152
18.2 Alternative Measures of the Inflation Rate 155
19.A Costs and Profit per Dollar, or Income Shares, and Annual Compound
Rates of Inflation over Post-World War II Growth Cycles 165
22.1 The Rate of Profit and Its Determinants, 1950-1993 187