Financial Capital Accumulation Research Articles

Model of “secular” cycle of financial capital accumulation

Crises hitting the world economy since the end of the previous century need a deeper explanation than effects of numerous sudden shocks. According to G. Arrighi’s theory, they manifest the final phase of North-American cycle of capital accumulation. Although analytically promising, the theory doesn’t meet broad recognition. A reason could be its weak formalization. This article addresses this problem by developing a mathematical model of capital growth rates. They are measured by nominal yield and interest rates which represent increments of capital in its general, financial form. If capital level follows a logistic path then its growth rate should be described by logistic differential equation. The model is brought to data on government bonds yields in Great Britain in XVIII– XIX centuries and USA — in XX century up to now. The study provides evidence for the pivotal role of financial-capital accumulation in systemic cycles and its S-shaped form. Besides, it reveals importance of trade balance in specifying cycle phases of domestic and global capital expansion.

Platform Colonialism: The Lower Circuit at the Center of Capitalist Accumulation

The study seeks to analyze how the self-employed are inserted in the context of financialization and how this insertion enables financial capital accumulation. We initially adopted the concept of neoliberal rationality of Dardot and Laval as our main theoretical lens. However, our immersion in the research field showed us the value of integrating Latin American authors. Through the story of a self- employed couple in the confection industry, and applying hermeneutic analysis, our results make two main contributions. First, we build a new concept – that we call platform colonialism – that unveils the mechanisms by which the work of micro-entrepreneurs constitutes a source of accumulation for financial capital. Although this concept emerged from a Latin America context, their transferability to other ‘colonized’ contexts is plausible and open to future investigation. Second, we argue that when trying to understand a social phenomenon taking place in a peripheral territory, it is worth to also mobilize local theories, instead of mechanically just borrowing Western-based ones, therefore nourishing the increasing movement of ‘decolonizing’ our minds. Additionally, our study illustrates the use of critical hermeneutics, showing its potential to increase our ability to deepen understand the interplay of different trajectories, from life stories to historical accounts.

Política da crise educacional: causa ou efeito da racionalidade autoritária e plutocrática mundial?

O presente artigo tem como objetivo promover o debate em torno das estratégias plutocráticas de mercantilização de um dos bens públicos fundamentais para a constituição autônoma de cidadãos e de culturas, povos e países, a educação. Mas, a lógica de precarização da educação, senão da mercantilização da educação, características de governos despóticos, autoritários a serviço da plutocracia financeirizada global implica na estratégia de aniquilação da potência do pensamento constitutiva de singularidades comprometidas com os direitos humanos, com a dignidade da vida em sua totalidade e, sobretudo com a defesa do espaço público, do bem comum, condições primordiais na conformação de sociedades e, de um mundo suficientemente humano e responsável com as futuras gerações. O artigo sugere que é condição intransferível num contexto de acumulação do capital financeiro, controlado pela plutocracia nacional e global, promotor da crise como técnica determinante das formas de governo, sob a prerrogativa de um estado de direito, operacionalizado pelo permanente estado de exceção, manter atuante a potência do pensamento que historicamente encontrou acolhida e se desenvolveu no seio das universidades. Sobretudo nas circunstâncias da sociedade brasileira constituída sob o ethos da escravidão, as universidades públicas constituem-se como lócus par excellence de constituição de reflexões, análises e questionamentos que viabilizem nos tomarmos como objeto, compreendendo os limites, mas sobretudo as potencialidades civilizatórias a nossa disposição.

Migration and development at home: Bitter or sweet return? Evidence from Poland

The existing economic literature focuses on the benefits that return migrants offer to their home country in terms of entrepreneurship and human and financial capital accumulation. However, return migration can have modest or even some detrimental effects if the migration experience was unsuccessful and/or if the migrant fails to re-integrate into the home country’s economy. In our paper, we empirically show which factors – both individual characteristics and features related to the migration experience – influence the likelihood of a sub-optimal employment of returnees’ human capital employing an original dataset on a representative sample of return migrants in Silesia (Poland).

Migration and Development at Home: Bitter or Sweet Return? Evidence from Poland

The existing economic literature focuses on the benefits that return migrants offer to their home country in terms of entrepreneurship, human and financial capital accumulation. However, return migration can have modest or even some detrimental effects if the migration experience was unsuccessful and/or if the migrant fails to reintegrate into the home country's economy. In our paper, we empirically show which factors - both individual characteristics and features related to the migration experience - influence the likelihood of a sub-optimal employment of returnees' human capital employing an original dataset on a representative sample of return migrants in Silesia (Poland).

Dynamics of Banks' Capital Accumulation

We construct a dynamic neoclassical model of banking capital where the dynamics are governed by the process of financial capital accumulation and credit risk realizations in a structure where stylized banking characteristics are maintained. This is aimed at focusing on how the profit‐maximizing capital ratio of banks evolves and how it reacts to exogenous shocks particularly so during periods of prolonged downturn of the economy. We examine impulse responses of our model to credit risk shock, business cycle shock, and monetary policy shock. The convergence of financial capital to its optimal level is also explored.

Trayectorias óptimas de inversión durante el ciclo de vida en un sistema de multifondos

Taking into account the new Colombian multi-funds scheme of the Individual Benefits Plan, an analysis was made through the application of stochastic and actuarial tools with the purpose of determining the moment in which agents (according to their social characteristics: sex, income expectation, moment they begin to pay contributions, contribution probability) must transfer their retirement account into the different offered portfolios. Considering the profitability and the risk the agents want to assume, as key elements, it is generally observable that they must remain a great percentage of their working lives in the high-risk investment fund to achieve a greater financial capital accumulation and a greater probability to attain a reasonable replacement rate.

Investment and the rate of profit in a financial context: the French case

The growth regime prevailing in France since the middle of the 1980s allowed for a recovery of profitability, yet without durable resumption of growth or accumulation of fixed capital. The financialization of this growth regime shows on both the asset and liability sides of the balance sheets. Following a post‐Keynesian framework, we analyse and test the main determinants of real investment and financial capital accumulation for non‐financial companies in France, based on data from the flow‐of‐funds accounts. This analysis points to an arbitrage, prevailing between real and financial accumulation, as a key reason explaining the insufficient recovery of investment.

A Critical Review of Public Borrowing by Turkish Municipalities: 1960–2006

This paper offers an analysis of municipal borrowing in Turkey during 1960–2006 in two sub-periods: 1960–79 and 1980–2006. These sub-periods are distinguished from each other as different regimes of capital accumulation, taking 1980 as the breaking point. In this framework, the capital accumulation model of the import substitution era of 1960–79 is assessed in the context of the national developmental state, while the financial capital accumulation regime in the post-1980 period is studied in the context of financial globalisation. The impacts of these two regimes on the debt structures of municipalities are compared using period-specific indices of indebtedness. It is found that indebtedness in real terms increased significantly in the post-1980 sub-period, which can be attributed to the adoption of the financial capital accumulation regime.

Padrões de acumulação setorial: finanças e serviços nas transformações contemporâneas da saúde

The purpose of this article is to introduce elements of the capitalist society economic reproduction to the discussion around the current dynamics of health accumulation. It identifies the direction and significance of capital accumulation in the health area as well as the characteristics of the economic environment where the competition currently takes place. The hypothetic hypertrophy of the financial sphere is seen as a means for structuring the capitalist economy since the late twentieth century. The former delimitations between industrial production and service delivery are blurred and weakened; the competition process shows new features and the contradictions - internally between the different elements of the health industry and externally with other sectors - are changing. This article aggregates elements for a contemporary analysis of the "medical-industrial complex" on the basis of a theoretical-historical-conceptual approach. We identify changes in the capital dynamics of this complex at international and national level and stress the increasing role of the health services as a forefront of capital accumulation. The new approach is based on the economic thinking of Marx in addition to the current discussions about the theory of financial capital accumulation and the new productive configurations of the large corporations.

On (Ultra) rationality and the corporate and government veils

The idea of (ultra) rationality in the context of changes in corporate and/or government savings stimulating offsetting responses in household savings has been the subject of theoretical and empirical controversy. This paper provides fresh evidence of the (ultra) rationality hypothesis, in the context of a generalized version of the life‐cycle hypothesis of saving, for the case of the UK. The results suggest partial personal savings adjustment to government and corporate saving changes in the short and (to a lesser extent) the long run. This has important implications on the issues of ‘rationality’, ‘fiscal policy’ and financial capital accumulation.

Corporate Control, Social Choice and Capital Accumulation: An Asymmetrical Choice Approach

Corporate decisions with regard to retained earnings act as a constraint to the consumption-saving decisions of all shareholders, except those who take the decisions - the controlling group. The latter exhibit a preference for a higher retention ratio than the non-controlling share-holders and tend to realize their "preferences." Given less than perfect substitution between corporate and personal saving, this tends to increase aggregate financial capital accumulation.