Finance-dominated Accumulation Regime Research Articles

Brazil: Stock Markets and Corporate Credit Now Driving Financialization?

The present article seeks to demonstrate that, despite the steep deterioration in social and economic indicators in the midst of an unprecedented social, political, and economic crisis, Brazil seems to have entered a new stage of the process of financialization, now shaped by the dynamics of the capital market. We briefly recall the different phases of financialization in Brazil from eliticized- to mass-based, underlining how the sharp decline in the prime rate as of late led to a strong valuation of financial assets in the stock market. We test the hypothesis of a new financialization pattern, now driven by the stock market, using in our regression model a sample of 81 different segments (non-financial) from the Economatica platform, from 2010 to 2019. The results indicate a change of command in the finance-dominated accumulation regime in Brazil, that is, corporate financialization is now also determined by the stock market valuation process, due to the fall in return on financial investments (notably government securities). Selic-driven financialization has been substituted by other forces, such as corporate credit and—a relevant new factor—investments in shares.

Ordoliberalism and Neoliberalization: Governing through Order or Disorder

Although both promote a free market and strong state, ordoliberalism is usefully contrasted with neoliberalization. Ordoliberals aim to achieve this goal by creating a juridico-political institutional fix that provides a stable framework for accumulation. Promoters of neoliberal regime shifts pursue it through strategies of destabilization that exploit resulting crises. Ordoliberalism governs through order, neoliberalization through disorder. Further, ordoliberalism corresponds more to an accumulation regime and mode of régulation-cum-governance based on a productivist concept of capital, reflecting the dominance of profit-producing capital in coordinated market economies. But it also has limited conditions of possibility and is relatively rare. In contrast, neoliberalization corresponds more to what Weber described as politically oriented capitalism, especially a finance-dominated accumulation regime, which is aligned with interest-bearing capital. It occurs in many more varieties of capitalism.

Financialisation and the New Swedish Model

Most studies of Swedish political economy are too optimistic about the condition and prospects of the reformed Swedish model (e.g. Bergh, 2014; Steinmo, 2010). Indeed, the Swedish economy has responded to the global financial crisis (GFC) in what appears to be a successful manner. This comparativist literature nevertheless omits in-depth analysis of the impact of financialisation, partly due to its neglect of long-term, dialectical processes of change (cf. Ogden et al., 2014). There is a small literature on financialisation in Sweden (e.g. Belfrage, 2008; Forslund, 2008; Kallifatides et al., 2010; Ryner, 2013; Belfrage, 2015; Andersson and Jonung, 2015; Kallifatides, 2016). However, it has not clarified what the dynamics, contradictions and crisis-tendencies of the resulting finance-dominated accumulation regime in Sweden are. Drawing on document analysis and statistics, and based on Regulation Theory (e.g. Aglietta, 1979), this paper does just that. It thus corrects an overly idealised picture of Swedish economy and society, as well as, more broadly, holding the Swedish case up as a critical case study for the sustainability of the finance-dominated growth regime in Europe. We argue that there is a looming crisis in the Swedish economy today, as the acceleration of financialisation following the GFC is shifting the economy away from being export-led to becoming debt-led and asset-based, and thus moving the economy closer to the UK and US economies. As such, the Swedish case suggests that the finance-dominated growth regime may be unsustainable in Europe more generally.

FINANCIALIZATION, INCOME DISTRIBUTION AND THE CRISIS

The paper argues that the process of financialization has profoundly changed how capitalist economies operate. The financial sector has grown relative to the real economy and become more fragile. Non-financial businesses have adopted shareholder value orientation, which had negative effects on investment. Working class households became squeezed because of rising inequality and have become more indebted, in particular in countries with real estate bubbles. Financial globalization has given rise to growing international imbalances, which have allowed two growth models to emerge: a debt-led consumption growth model and an export-led growth model. Both should be understood as reactions to the lack of effective demand due to the polarization of income distribution. The resulting finance-dominated accumulation regime is characterized by slow and fragile growth. The crisis is best understood as the outcome of the interaction of financialization and changes in income distribution.

Oser pleurer:Horaceand the Power of Tears

While there is an agreement that the Fordist accumulation regime has come to an end in the course of the 1970s, there is no agreement on how to characterize the post-Fordist regime (or if a such is already in place). The paper seeks put together various arguments related to financialization (in the broad sense) from a macroeconomic point of view and investigate the relevance of these arguments by means of an analysis stylized facts for EU countries. The paper discusses changes in investment behaviour, consumption behaviour and government expenditures, investigating to what extent changes are related to financialization. Households experience higher debt levels. Rising profits of businesses come with only moderate investment. The notion of a “finance-dominated” accumulation regime is proposed to highlight that financial developments crucially shape the pattern and the pace of accumulation. The finance dominated accumulation regime is characterized by a mediocre growth performance and by higher volatility. However, so far deregulated financial markets have not lead to major financial crises in advanced capitalist economies. A possible reason for this is that the size of the state sector has not been substantially reduced despite neoliberal attempts to do so.

From the gene to the globe: Extracting rents based on intellectual property monopolies

ABSTRACT The increasing power of concentrated financial capital is accompanied by an extension of processes of commodification and procedures of dispossession similar to forms of original accumulation. This continuing and reinforced accumulation by dispossession in its different guises is capital's answer to the problem of over-accumulation. As a form of dispossessing accumulation, the implementation and extension of intellectual property monopolies is of particular importance. In the context of an increasing socialization of labor, in particular of innovative activities, the private appropriation of knowledge in the form of intellectual property monopolies and its commercial valorization has become a central characteristic of the current configuration of capitalism. Income based on such property titles has become an important form of the appropriation of resources in the finance-dominated accumulation regime. The article applies Marxian rent theory to intellectual property monopolies. Findings from the pharmaceutical and biotechnology industries illustrate how, based on specific power relations, the owners of property titles can appropriate resources and values. Rent extraction processes take place on different scales, from the enforcement of property monopolies over gene sequences to the role of the USA as a rentier state on a global scale.

Bausteine zu einer Geographie des Kapitalismus

Elements of a geography of capitalism. Despite the variety of new approaches economic geography developed rather one-sided in the past decade. The regional and the firm lenses hardly enabled to recognize how economic processes and political power relations interact on different scales. These empirical deficits also express a restricted theoretical base. The approaches of the new “regional orthodoxy” claim to explain conditions of an improved competitiveness of firms and of regions. However, many socially relevant and spatially differentiated problems are ignored. In contrast, this paper argues for an integrative understanding of the capitalist economy in its historical dynamics and with its reciprocal effects for actors on various scales. In the course of neoliberal deregulation policies and globalization processes, a finance-dominated accumulation regime emerged in the USA which shapes the economy on a global scale. Institutional investors gained decisive control over investments. The political power relations and hierarchies between states remain important. Therefore, the paper suggests a shift of economic geographical research. In the perspective of an integrative geography of capitalism the paper outlines a research agenda of a geography of accumulation, a geography of production as well as a geography of power

Globalised finance-dominated accumulation regime and sustainable development

Ecological, economic and social issues are tightly interwoven and relate to a specific mode of production and social relations. Hence, we use the term sustainable development in a very broad sense, aimed at questioning how much and how far the dynamics of end-of-century capitalism is compatible with social well-being and environmental preservation. The new finance-driven accumulation regime, which came to being in the l980s, was consolidated thanks to neo-liberal governmental policies that strove to reduce social expenditure, including health-care benefits, retirement pensions and unemployment benefits. Connected to depressive macroeconomic trends, this regime caught third-world countries, including newly industrialised countries, in a debt trap, and contributed to a worsening of the economic, social and ecological situation of most of non-OECD countries.