Financialization,distribution, and macroeconomic regimes before and after the crisis: a post-Keynesian view on Denmark,Estonia, and Latvia

ABSTRACT

Since the early 1980s, financialization has become an increasingly important trend in developed capitalist countries, with different timing, speed, and intensities in different countries. Rising inequality has been a major feature of this trend. Shares of wages in national income have declined and personal income inequality has increased. Against this background unsustainable demand and growth regimes have developed that dominated the major economies before the crisis: the ‘debt-led private demand boom’ and the ‘export-led mercantilist’ regime. The article applies this post-Keynesian approach to the macroeconomics of finance-dominated capitalism of three Baltic Sea countries, Denmark, Estonia, and Latvia, both for the pre-crisis and the post-crisis period. First, the macroeconomics of finance-dominated capitalism are briefly reiterated. Second, the financialization-distribution nexus is examined for the three countries. Third, macroeconomic demand and growth regimes are analyzed, both before and after the crisis.     

Financializing the poor: ‘dead capital’, women’s gold and microfinance in Pakistan

This study examines how Pakistani microfinance banks’ (MFBs) collateralized microcredit arrangements take advantage of the cultural centrality of gold in women’s lives. In so doing, it contributes to the wider debate on financial inclusion and financialization. The product, processes and narratives examined are a local manifestation of global finance’s emphasis on engaging commercially viable means to bring previously ‘unbanked’ populations within its fold. Based on fieldwork in Lahore and Karachi, two of Pakistan’s largest cities, this paper highlights how the ‘financial inclusion’ agenda of microfinance has effectively financialized the lives of poor Pakistani women. Our analysis finds that Pakistani MFBs draw on patriarchy’s hierarchical norms and the precariousness of low-income living in ways which bolster their own financial positions. This is supported by the country’s central bank, which has granted collateralized microfinance products a ‘risk-free’ rating, easing the path to the financialization of jewellery which in a South Asian context is directly associated with women’s social standing and economic security. The outcome is a deepening of deep-seated vulnerabilities.     

Late home ownership and social re-stratification

Home ownership was a significant element of social change in the post-war, mature, capitalist economies such as the United Kingdom, United States and Japan. This growth of individual home ownership occurred, however, within a particular demographic, economic, social and political context. This distinctive set of conditions include the atomized, nuclear family; suburbanization; high growth; the conventional mortgage market and a young, working population. These conditions have changed and coalesce in the constitution of what we refer to as ‘late home ownership’. The paper conceives of contrasts between ‘real estate families’ or ‘accumulating families’ which maintain or further accumulate valuable multiple property assets over generations; ‘dissipating families’ which are forced to deploy and diminish their property assets accumulated in the exceptional era; and propertyless ‘perpetual renter families’. It is argued that these emergent divisions are pivotal in understanding new forms of social re-stratification in which the patterns of ownership of residential property, the income flows from residential property investment, a changed demographics and intergenerational dynamics are key drivers.     

Varieties of Regulation and Financialization: Comparative Pathways to Top Income Inequality in the OECD, 1975–2005

Abstract

With financialization now acknowledged as one of the most potent threats to income equality, can finance-driven inequality be explained by a singular causal argument? Taking the case of top incomes across the OECD, this paper addresses the standard causal narrative of finance-driven inequality, where rising top income inequality is explained as a function of deregulation, financial sector growth, and a parallel weakening of the role of trade unions and the government. Applying fuzzy-set Qualitative Comparative Analysis (fsQCA) to a time-series dataset (1975–2005), it assesses the ways in which configurations of institutions combined in different ways prior to the recent financial crisis, to create policy contexts conducive to top income growth. It does this by adopting a time-series approach to QCA, involving calibration and analysis of data at three successive historical waves. Results suggest that top incomes in the era of finance-driven capitalism were subject to a diversity of causal paths which generated similar outcomes in different contexts, in a manner which departs substantially from the standard narrative. In doing so, it elaborates on the application of time-series approaches to case-based analysis, and uses its results to discuss the ways in which institutions may combine in different ways to generate similar, or divergent outcomes.     

Disappearing nature? Agribusiness,biotechnology and distance in Argentine soybean production

A recent trend identified in the agro-food literature is that financialization in the global food system is further increasing the distance between farm and plate as well as abstracting physical commodities into market derivatives. How does food, a basic material need, become a commodity, a financial asset divorced from its physical form? This contribution explores the growing distance and abstraction of food from farm using Argentina's soy model as a case study. I explore the various drivers of distancing across the soy value chain in Argentina, including industrialization, globalization, corporatization and finance. I argue that the push for technological innovation by large-scale agribusinesses, in articulation with financial sector involvement, are both an example of and are instrumental in the process of distancing and abstraction identified in the agro-food literature. This paper also highlights how, despite agribusiness efforts to ‘displace’ and ‘disappear’ nature, these processes are never fully accomplished. I thus reflect on the socio-ecological contradictions that arise from the processes of distancing and abstraction which accompany the financialization of the corporate food system under neoliberal globalization.     

Introduction: New directions in agrarian political economy

For four decades, The Journal of Peasant Studies (JPS) has served as a principal arena for the formation and dissemination of cutting-edge research and theory. It is globally renowned as a key site for documenting and analyzing variegated trajectories of agrarian change across space and time. Over the years, authors have taken new angles as they reinvigorated classic questions and debates about agrarian transition, resource access and rural livelihoods. This introductory essay highlights the four classic themes represented in Volume 1 of the JPS anniversary collection: land and resource dispossession, the financialization of food and agriculture, vulnerability and marginalization, and the blurring of the rural-urban relations through hybrid livelihoods. Contributors show both how new iterations of long-evident processes continue to catch peasants and smallholders in the crosshairs of crises and how many manage to face these challenges, developing new sources and sites of livelihood production.