Understanding America's Hesitant Steps Toward Financial Capitalism: Politics, the Depression, and the Separation of Commercial and Investment Banking

Few would disagree that the Glass-Steagall Act of 1933 is thecontinental divide in American financial and banking history. Bydisallowing banks from getting involved in the investment bankingindustry, this Act imposed an institutional change that shaped howfinancial institutions conduct their business, even today in itsdecline. Conventional wisdom has it that the Act was enacted tocorrect the ``deficient'' financial system that existed during theperiod. In this paper we investigate whether this assertion can beempirically verified by analyzing the Senate vote on a predecessorof this Act (which included the clause separating commercialbanking from investment banking activities). Using multinomiallogits, we examine what may have motivated senators to vote for itspassage. The econometric evidence indicates that the Senate votewas significantly influenced by important interest groups(including national banks as well as manufacturing sectorinterests), despite the large populist outcry for financial marketreforms at the onset of the Depression.     

Remittances Sent To and From the Forcibly Displaced

This paper reviews the literature on remittances in the context of forced displacement. The evidence suggests that remittances are often affected, and affected more strongly, by factors in the displacement context that are different from factors in other contexts, such as ‘economic’ migration. These factors include the possibility of continuing or new conflicts in the region of origin, the possibility of sudden mass repatriations, the relationship of diaspora groups with the authorities of the country of origin and opposition groups, the higher risk of sudden closure of remittances channels, and the complex movement trajectories of the displaced, among others.     

Financial and Political Factors Motivating the Privatisation of Municipal Water Services

Financial and political factors are widely considered to be an explanatory factor of the privatisation of public services. However, the empirical evidence in this respect is not convincing. This paper considers elements of long-term financial condition and ideological and political strength, together with other socio-economic factors and the effects of the current global financial crisis, to address the financial stress–privatisation relationship, with respect to urban water services, observed during the period 2002–2012 in Spanish municipalities. A discrete time survival model is applied, and the results obtained show that certain elements of financial condition, together with political and ideological factors, are decisive influences in decisions to privatise urban water services. We also highlight the major impact of the Great Recession and its effect on the financial stress–privatisation relationship.     

What makes fiscal consolidations last? A survival analysis of budget cuts in Europe (1960–2004)

This article examines the political and economic determinants of the relative duration of fiscal consolidations in Europe. The study focuses on the fifteen Member States that formed the EU between 1960 and 2004, and applies survival analysis techniques to their fiscal data. We find evidence that the probability of ending a period of fiscal consolidation depends on the debt level, the magnitude of the adjustment, the relative contribution of spending cuts, and the degree of cabinet fragmentation. Most importantly we also find that under a stricter definition of fiscal consolidation, political variables, such as coalition size and election year, gain importance with respect to economic variables as predictors of the probability of ending an episode of fiscal consolidation. This relative importance of political variables weakened in the run-up to EMU, probably because countries had to consolidate irrespective of their political constraints.     

Defense Transformation in Latin America: Will It Transform the Technological Base?

Developing the defense trilemma of choices between autonomy, stability, and global integration, this article analyzes the strategic tension in military acquisition between undertaking technology partnerships versus off-the-shelf purchases of equipment to meet modernization needs in Latin America. The Brazilian case is examined for its lessons in how partnerships can help countries to achieve strategic goals while promoting industrial capacities.     

Armed conflict,land grabs and primitive accumulation in Colombia: micro processes,macro trends and the puzzles in between

Armed conflict is widely believed to disrupt agricultural production and ‘reverse’ development, but it may also involve the violent transformation of rural economies from subsistence to commercial agriculture. The case of Las Pavas, an estate in northern Colombia, provides further evidence that armed conflict created opportunities for violent land grabs and the expansion of commercial agriculture in Colombia. However, aggregate data suggest that primitive accumulation may be only part of the story behind the massive scale of forced displacement and dispossession. A research strategy that accounts for the diversity of subnational contexts, processes and outcomes is needed.     

The dynamics of rural poverty in Latin America

The development and perpetuation of a functional dualism between the subsistence sector and the commodity‐producing sector is an objective outcome of the laws of capital accumulation in the periphery of the world capitalist system. The necessity for this dualism derives from the drive of capitalists to maximise profits and thus maintain low wages. Its possibility arises from social disarticulation whereby labour's income does not participate in expanding the market for the modern sector. Through dualism, surplus value is increased not only by the orthodox means of central economies—principally increasing the productivity of work to reduce necessary labour embodied in wage goods—but, in addition, and dramatically more effectively, by collapsing the price of agricultural labour by an amount equal to the production of use‐values by the worker's family in the subsistence plot. In this way, subsistence agriculture supplies cheap labour to commercial agriculture which, in turn, supplies cheap food to the urban sector where it sustains low wages. Socially disarticulated accumulation and functional dualism between capitalist and precapitalist modes perpetuate primitive accumulation in the modern sector based on surplus extraction from the peasant sector fundamentally via the labour market. This specific form of overexploitation of rural labour implies a particular dynamic in the use of labour and natural resources in subsistence agriculture. The pattern of rural poverty and the subjective contradictions of peripheral capitalism can thus largely be understood by identifying the antagonistic contradictions to which the subsistence economy is subject in adjusting to domination.     

Facts Tell A Different Story

正China has billionaires and is a top destination for foreign direct investment. It has thousands of branches of Starbucks and KFC,along with significant private ownership of capital. It suffers from different levels of inequality. These factors lead many to question whether it really is what it claims to be: a socialist country.