Socialization Of Investment Research Articles

The Relevance of Jim Crotty’s Keynes Against Capitalism to Solving Macro economic Problems under Conditions of Class Conflict

Was Keynes trying to save capitalism or create “Liberal Socialism”? Jim Crotty’s unique approach to this long-standing question makes his work an outstanding contribution to heterodox macro policy. Tracing Keynes’s policy positions from World War I to Keynes’s death in 1946, Jim combines rich historical detail with Keynes’s insistence that the realism of assumptions affects the truth content of hypotheses. Jim’s book can serve as a guide to policy positions to sustain full employment through the socialization of investment under conditions of class struggle. Contrary to the position that Keynes denied class conflict, there is no fundamental contradiction between Marx’s assumption of class conflict and Keynes’s policy positions in support of full employment through the socialization of investment. JEL Classification: E6, E11, E12

Institutional Theory, Socialization of Investment, and Care-Based Full Employment for Equity and Human Development

The article discusses commitment to full employment in light of institutional theory and offers a renewed examination of the “socialization of investment” concept. The discussion builds on Veblen’s theory of human development, predation, and capitalism. It highlights contemporary institutional inquiry in a discussion of ongoing issues of care and disparities. Based on this, the article formulates problems for future inquiry. The article also provides insights about Job Guarantee based on institutional concepts.

Care, Job Guarantee, and Revisiting “Socialization of Investment”: Insights from Institutional Economics

Care, Job Guarantee, and Revisiting “Socialization of Investment”: Insights from Institutional Economics

The Winters of Our Discontent and the Social Production Economy

ABSTRACT The economic policy reaction to the Covid-19 crisis has been considered from different angles. Here I will remind only the positions by Draghi (looking at this historical conjuncture comparing it to ‘war times’), Tooze (seeing in it the definitive closure of the ‘political economy of inflation’ as well as ‘the first crisis of Anthropocene’), Kregel (proposing ‘central controls for social provisioning’ as the pertinent macroeconomic policy). The pandemic could inaugurate a game change in European economic policy; and even unlikely quarters suggested in the last year a retreat from neoliberalism as we knew it. However, the health crisis is not an exogenous shock: it is inherent in the capitalist social form of production and consumption. The pathological state of affairs that takes our breath away reveals the hidden reality of the society where we work and consume. Confronting the current and future virus outbreaks (as well as climate change) obliges us to go back to the founding themes of macroeconomics, which needs to consider not just the level of employment, but also what employment is for. In this logic, we are forced to radicalise the notion of the ‘socialisation of investment’ into that of a ‘social production economy’: the challenge in front of us is indeed about the ‘how’, ‘what’, ‘how much’ and ‘for whom’ to produce.

Socialization of Investment and Institutional Changes in China: A Heterodoxy Approach

In this paper, we show that economic development in China can be analyzed by the cyclical emergence of institutions that delimit a continuous reorganization of activities between the State and private sectors in the economy. For this purpose, we develop a ‘developmentalist approach’—based on the contributions of John M. Keynes, Alexander Gerschenkron, Ignacio Rangel and Albert Hirschman—that aims at understanding the formation of a policy space suitable for the socialization of investment in China under an international environment characterized by the financial globalization.

Estado, mercado, sector privado y planificación en el desarrollo económico reciente de China

O objetivo deste artigo é demonstrar, partindo de uma visão de conjunto das reformas econômicas chinesas, que o surgimento de um largo setor privado e a própria sofisticação e diversificação da manufatura têm demandado contínua reorganização de atividades entre os setores estatal e privado da economia. Neste artigo sustentamos que o Estado passou a caber maior protagonismo nas esferas que envolvem o controle da grande indústria e da grande finança, assim como no nível da coordenação e socialização do investimento pela via do comando sobre as políticas econômica, monetária e fiscal, do comercio exterior e, principalmente, no lançamento de novas e superiores formas de planificação econômica.

Financialization and Hysteresis: The Case of Chile

The changing relationship between the financial and non-financial sectors in both developed and developing economies during the past three decades has been labelled ‘financialization’ — a process entailing the “metastasization of financial motives, financial markets, financial actors and financial institutions in the operation of domestic and international economies” (Kotz 2009). In Chile, this transformation has been maligned by all manner of deleterious macroeconomic consequences, including tepid real economic growth, increased financial instability, widening distributional inequality, stagnant productivity and, most notably, a ‘missing link’ between profits and investment (T. Palley 2007). By way of a simple, post-Kaleckian, endogenous growth model, we explicate the following overarching causal conduit between these phenomena: a self-perpetuating cycle of rising inequality, financialization, deficiencies in effective demand, financial speculation, reduced investment, stagnant productivity, slow growth, and so forth (Hein 2015). A remedial policy regime, based on inclusive development and the socialization of investment, is accordingly posited.

The political economy of reforms and the present Chinese transition

ABSTRACT The main aim of this paper is to demonstrate, through a review of China’s economic reforms, that the emergence of a large private sector and the increased sophistication and diversification of industry has required the continual reorganization of activities between the state and private sectors of the economy. We argue in this paper that the state began to play a major role in important industries and in big finance, as well as in the coordination and socialization of investment, such as economic policy (monetary and fiscal), foreign trade and, especially, the launch of new and higher forms of economic planning.

Keynes, the socialisation of trade, and international monetary institutions

While Keynes began formulating his ideas concerning the post-WWII international financial system in the early 1940s, the genesis of these ideas can be traced to his earlier work. The Keynes Plan represents the culmination of his search for adequate institutions that guide economic activity for the public good. The reasons given by Keynes for the establishment of an International Clearing Bank are relevant in the modern international economy, given the current imbalances in international trade. As Keynes argued for the socialisation of investment as a method to achieve full-employment in the domestic economy, he argued for the “socialisation of trade” as a method to achieve international economic balance among nations.

Employer of Last Resort Policy and Feminist Economics: Social Provisioning and Socialization of Investment

The focus of the paper is on the Employment of Last Resort (ELR) policy proposal that has emerged from Post Keynesian theory. The paper discusses this macroeconomic policy as an embodiment of what Keynes called “socialization of investment,” as well as an avenue for a social provisioning approach towards socialization of unpaid care labor. Intersections between Post Keynesian and feminist economics are delineated. The paper proposes avenues for input from feminist economics into formulation of an ELR policy, and raises questions about transformation of gender relations.

The Philosophical Foundations of Chapter 24 of TGT: Is Mankind's Destiny the Essence of Keynes's Evolutionary Vision?

It is difficult to advance a point beyond what Keynes himself commented about his own vision in General Theory of Employment, Interest and Money in 1936 (hereafter TGT) in its Chapter 24. It is also difficult to express a deeper thought than what Skidelsky wrote about Chapter 24 of TGT (cf. Skidelsky, 1997). The purpose of this article is to identify whether Chapter 24 of TGT is the gist of Keynes’ legacy, having set the foundations of macroeconomics in the previous 23 Chapters. Relevant topics included in Chapter 24 are the consequences of full employment, the fate of income distribution, the future of overall wealth, the socialization of investment, saving, expectations, the role of the State in economies, the future of financial markets and the interaction between economics and other disciplines. Indeed this Chapter displays Keynes’ genius as a social philosopher, following the tradition of Economics Possibilities for our Grandchildren (1930). In Chapter 24 he was taking a glance at his product as did Phillip II when he was observing the construction of his castle El Escorial in XVII Spain. Within his vision, is this piece of work a justification of capitalism? Keynes sees the State as both the spender and the employer of last resort, thereby proposing a new role for the government (Skidelsky, 1998). He also suggests a new role for the private sector and reconsiders the interrelation between the two sectors. He is fully optimistic about this issue, which he considers as evolutionary. In addition, Keynes blurs the distinction between economics and sociology, advancing new interdisciplinary hints in his thinking. Keynes is also concerned on the epistemological role of assumptions in order to obtain defensible conclusions. Thereafter the British economist proposes new methods. He was a neo-realist and was against the inductive method. In addition, it can be stated that TGT is grounded on new psychological laws and motivations, that is, on a new vision of humankind, especially the analyzed chapter. His topics are the bypassing of Classical Economics; the destiny of macroeconomics in both theoretical and policy terms, highlighting new roles for interest rates; savers and rentiers; and the relevance of the concepts of ideas, interests and power. In all these respects Keynes is once again far ahead of his time. Finally a debatable topic dealt with by Keynes in Chapter 24 of TGT is socialisation of investment. This is in words of Skidelsky, a shift in the balance of social power. Keynes is thus in Chapter 24 of TGT a visionary and an idealist, a reformer, and certainly a trans-generational thinker. When he talks about the passion of thriftiness and the setting of reasonable financial rewards arising from financial instruments he is advancing explications for financial crises in terms of speculation. The open conclusion is that Chapter 24 contains the gist of Keynes’ mature philosophical thinking and legacy, confirming that for him attitudes are one of the most relevant issues in life. In addition, he considers that both social and psychological elements are necessary for a thorough understanding of economic issues and their consequences, such as peace and happiness. Section 1 is an introduction. Section 2 is both a literature review and a summary of Keynes’ general philosophical insights. Section 3 is an analysis of Chapter 24 of TGT in the specific fields of Epistemology, Ethics, Ontology, and Political and Social Philosophy. Section 4 is a conclusion. References are listed at the end of the article.

A Social Provisioning Employer of Last Resort: Post-Keynesianism Meets Feminist Economics

This article proposes a collaboration between post-Keynesians and feminist economists with regard to macroeconomic policies aimed at the socialization of investment, in particular the proposal for the government to act at once as the Employer of Last Resort and as a social provider. This is particularly important in the UK because the coalition government's Spending Review and Plan for Growth have dismantled public services and welfare benefits while emphasizing a narrow range of productive activities. This strategy threatens to widen the inequality that has led to low levels of demand and reliance by low- and middle-income households on unsustainable borrowing in order to maintain living standards. The article therefore contributes to current debates about alternative macroeconomic policies: it argues that the current emphasis on austerity needs to be replaced by a social provisioning approach that requires us to first pose the question of what the economy should be for.

Special remedies for special causes: involuntary unemployment in Keynes' political writings

This paper analyses the proposals Keynes' made in his political writings regarding unemployment, extending arguments made in The General Theory. The first issue is the relevance of voluntary unemployment to an understanding of Keynes' views on 'structural' unemployment. The second issue is the connection between, on the one hand, Keynes' argument in favour of public works, State planning and, more generally, the socialisation of investment and, on the other, the analysis of involuntary unemployment made in The General Theory. Emphasis is placed on long-term pessimistic expectations and on the market valuation of capital assets. Copyright The Author 2010. Published by Oxford University Press on behalf of the Cambridge Political Economy Society. All rights reserved., Oxford University Press.

Adoption of Big Push hypothesis: evidence from the case of Botswana

Rosenstein-Rodan proposed that if expansionary and developmental policies have to be pursued, the small changes in fiscal and monetary policy make minor changes in economic growth. So, if a meaningful economic development is the objective carrying out Big Push is necessary for the policy makers. This hypothesis is in line with Keynesian advice that 'a somewhat comprehensive socialisation of investment is the only means of approximation to the full employment', which was adopted diligently by many economies especially in the developing world. This paper is an attempt of applying the Big Push hypothesis for the policies of Botswana. It reviews the relevant literature in early sections and summarises the argument of Big Push hypothesis. In later sections, it applies the hypothesis to Botswana case and concludes that the Big Push hypothesis has in fact made an impact on the economy's development.

Post-Keynesianism, socialisation of investment and Swedish wage-earner funds

This paper analyses the performance of one of the most controversial of recent economic policy 'experiments', namely Swedish Wage-earner Funds (WEFs). It examines the ability of the WEFs to meet macroeconomic, financial and democratic objectives. The analysis indicates a favourable financial performance, but little significant democratisation. Macroeconomic influence was constrained by the limited size of the scheme and, though associated with positive changes in economic variables, the experiment was ultimately overwhelmed by the collapse of an asset price 'bubble'. Nevertheless, the performance of the WEFs has legitimised the concept of collective investment funds as an economic policy instrument. Copyright 2006, Oxford University Press.

British and European Influences on the “Australian Way” from the 1980s

Commonwealth countries share their British social policy legacy in a variety of ways. Autstralia attempted to adopt the postwar “new Fabian” welfare state model at the very time when international economic circumstances undermined its Keynesian foundation. With Labor governments in power from 1983 to 1996, Australia diverged significantly from the neo‐liberal reform path adopted in the United Kingdom. Australian governments looked increasingly to European social democracies for alternative social policy models. In a manner anticipating the “Third Way”, the tendency was towards mixing neo‐liberal economics with social democratic welfare. The Australian “Third Way” which resulted proved unstable. Current social reformers, the paper proposes, ought to revisit a neglected but characteristically British emphasis on the need for a measure of “socialization of investment” to underpin redistributive strategies.

Dead Economists as Inspirators of Living Social Economists1

An attempt is made in this article to demonstrate that Alfred Marshall and John Maynard Keynes erected a number of signposts that point in the direction of a normative, institutional and policy-oriented social economics of labor. They opined that dysfunctioning institutions had thrown most members of the working class into an abyss of poverty. According to Marshall, poverty was caused by institutional neglect of education for the masses. Hence he recommended a drastic overhaul of those institutions that impinged on education. Keynes argued that the rentiers were the villains because they had intentionally reduced their funding of entrepreneurial investments. Consequently, investments dwindled and unemployment caused working-class poverty to rise above its customary levels. Keynes's solution was public investment in private enterprises, which he called socialization of investment. This would cause euthanasia of the anti-social rentiers. Because of their recommendations, Marshall and Keynes called themselves socialists.

The Socialization of Investment: Comment on Meltzer

The Socialization of Investment: Comment on Meltzer

‘Socialization of Investment’ and ‘Euthanasia of the Rentier’: the Relevance of Keynesian policy ideas for the contemporary US Economy

‘Socialization of Investment’ and ‘Euthanasia of the Rentier’: the Relevance of Keynesian policy ideas for the contemporary US Economy

Misreading Keynes: Reply to Garrison

In the concluding chapter of The General Theory, Keynes offers a vision of socialized investment, which, according to Allan Meltzer, informs Keynes's entire analysis and critique of laissez‐faire capitalism. Roger Garrison adds a critical dimension to Meltzer's interpretation, contending that Keynes's vision of the “comprehensive socialisation of investment,” with its zero rate of interest, is Utopian, thereby weakening Keynes's case against real‐world capitalism. This paper defends Keynes, arguing that Garrison and Meltzer misconstrue both Keynes's theory of interest and his proposed socialization of investment. The paper criticizes Garrison's justification of interest earnings as “a reward for waiting,” provides an alternative account of the economic arrangements implied by socialized investment, and, more generally, argues that Keynes's economic analysis shaped his social vision, not vice versa.