Review of Radical Political Economics

To meet today’s challenges, including successful mobilization around people’s most immediate needs, a rigorous and inspiring vision of a new society—socialism—is more necessary than ever. Without creating rigid or utopian schemes, we can affirm and develop some of the most essential elements in that vision: progressive transcendence of the alienating and polarizing content of spontaneous markets; democratic coordination and planning, at all levels from central to decentral; and creative engagement with the vast potentials of modern information technology. This project must also recover and embrace all of the lessons, both positive and negative, of the twentieth-century postcapitalist experience, especially that of the USSR.

The stagnant wages, worsening distribution of income, and slower economic growth that have resulted from neoliberalism have weakened Social Security’s future viability. Moreover, the prediction of a future “crisis” for Social Security is based on the assumption of continued antiworker neoliberal policies, and neoliberal policy proposals to “save” Social Security have provided a rationale for redistributing tax burdens away from the rich and further promoting the neoliberal agenda.

This article examines the rhetoric of the debate about Social Security. It suggests that political opportunism by Presidents Johnson and Clinton undermined the rhetorical position of supporters of Social Security. It details the approach taken by neoconservatives in their efforts to dismantle the system and suggests rhetorical responses that have been effective in countering those efforts. It also traces the ebb and flow of confidence in the system, as measured by public opinion polls.

Under Social Security privatization, workers would be allowed to divert some of the money that currently goes to Social Security into private accounts. This would expose them to market risk, that is, the risk of a substantial drop in equity prices or of a prolonged bear market. This could result in generations of workers with less money than they thought they would have for retirement. A privatized system could require the government to intervene, for example, by expanding social programs. The primary alternative to a government bailout of the Social Security system, older workers working longer, would create enormous labor market pressures. Other alternatives, such as working longer or diversification, also encounter obstacles. Many middle-class families affected by market risk already save too little for retirement, and optimal diversification may prove too costly for many low- and moderate-income households.

Cooperatives function in market economies, but they are not always served well by markets. Workers’ cooperatives avoid use of the labor market by definition, but they encounter forms of market failure and system mismatch in equity markets. Economic theory of the labor-managed firm and the historical development of the Mondragón system of financing cooperatives provide insight into these problems. This article argues for new strategies to assist capital formation in cooperatives.

Using publicly available data sources and data supplied by Wal-Mart, I estimate the impact of a proposed “big box living wage ordinance” on a new Wal-Mart store scheduled to open in Chicago in the spring of 2006. I find that an ordinance that mandates a $10.00 per hour minimum wage and a $3.00 per hour health care insurance benefit for stores of more than 75,000 square feet would lead to an approximately 15.3 percent increase in labor cost for an average Chicago “big box” retailer. I estimate that, if the entire cost of the mandate were passed on to consumers through price increases, this could be recovered through an approximately 2.1 percent price increase.

In 1979, Tom Weisskopf found that the crucial late-expansion period of the business cycle, in which the output continues to expand but the profit rate begins to fall, was best explained for his 1949-1975 U.S. data as a result of increasing real wage gains higher than real productivity gains. This led to a profit share decrease that was the primary cause of the cyclical decline in the profit rate. In this work, we extend Weisskopf’s analysis through 2001 and find an important change. Although the fall in the profit share continued to be the key to the fall in the profit rate, unfavorable shifts under neoliberalism in price ratios replaced his earlier (real) wage squeeze. This result is consistent with and supports the generally accepted economic stylized fact of decreased power of workers under neoliberalism.

This article calls into question the view that investment has become essentially “global” in recent decades. The data presented here suggest that productive capital is in fact remarkably immobile. This raises questions about the extent to which capital mobility constrains progressive projects. The article concludes by suggesting ways that we might clarify our understanding of the accumulation process and its potential political consequences.

In December 1997, the IMF offered Korea loans. In return, Korea had to undergo radical neoliberal restructuring. Since 1997, growth has slowed, poverty and inequality have risen, investment spending has stagnated, and foreign ownership of Korean firms and banks has skyrocketed. We argue that the eight-year experiment with radical neoliberal restructuring has been a failure for the majority of Korea’s people.

The Argentinean crisis in the late 1990s and early 2000s was another manifestation of various “neoliberal crises” that struck Latin America, Asia, Turkey, and Russia. During the 1990s, Argentina underwent typical neoliberal reforms: further opening of trade, liberalization of capital movements, convertibility, pension funds, and so on in the general context of large public and external debt rendered unbearable by interest rates’ rise in 1979. As in other countries, these trends were the expression of this new social order’s strong bias to the advantage of central and peripheral ruling classes. The Argentinean crisis also owes much to the stand taken by its ruling classes in their attempt to insert themselves under favorable conditions within the new configuration of imperialism. The national economy was sold to international transnational corporations and financial interests, while national ruling classes finance accumulation in the United States. Postcrisis trends manifest the difficulty to define a new strategy.

The objective of this article is to examine whether China has a viable macro social structure of accumulation (SSA) for capitalist long-wave upswing into the early decades of the twenty-first century. The article commences with the SSA index of performance and potentiality (IPP) through which phases of capitalist development can be scrutinized. The rest of the article details the components of the IPP, first the more technical institutional factors and then broader indicators of development. The article concludes that China is currently an emerging capitalist economy and that it is likely to continue through long-wave upswing through core industrialization during the next fifteen years. There are critical limits to capitalist development in China—including problems associated with capital productivity, innovation, pollution, and rural-urban dynamics—and these are likely to restrict long-term performance by about 2020.

Mexican women, particularly married women, living in the United States appear to allocate far more of their time to waged work than do women in Mexico. The fierce debate among social scientists over the sources of American women’s steadily rising labor force participation rates during the twentieth century provides hypotheses that all plausibly explain a part of this phenomenon, including a misapprehension of the phenomenon due to the failure of official sources to recognize nonwaged work, the importance of higher wages for pulling women into employment, the growth of work perceived as “women’s work,” the desire of women to provide for their families new goods that they cannot produce at home, the increasing competition of commodity production with home production, and the impact of different social norms.

This essay reviews three inside stories about international organizations and developing countries. Behind the Scenes at the WTO describes how developed countries use manipulation, blandishments, and threats to control the WTO. Confessions of an Economic Hit Man is an ex-consultant’s account of his role in pushing developing countries into debt and dependency. The Economist’s Tale is by a consultant in Sierra Leone who bucked World Bank policy to prevent a rice shortage and famine.