First Lecture Capitalism: A Brief History

Transcription

1 Nitzan / 3270 GPE I I. Capitalism: A Brief History / 1 First Lecture Capitalism: A Brief History Definition Economic system? Private ownership / profit motive / wage labour Beginnings 16 th century: Feudal self-sufficiency Italy / low countries / England Capitalist revolution: transformative / integrative / uneven Cosmology Why Europe? Triple revolution: scientific / political / technological Key changes Work: means of production / employment / unemployment / skills / clock Family: from extended, to nuclear, to none Environment: from food to the pre-conditions of human life State: nation state, representation, intervention Globalization: transnational corporation, global ownership Agriculture 1 st revolution: surplus and class 2 nd revolution: labour saving Transportation Movement: humans, sea routes, land Population Infant mortality / life expectancy / population size Material standards of living Malthus curse? Geography Diamond s Guns, Germs, and Steel Regional shifts: from Asia, to the West and back to Asia Distribution Rich vs. poor regions Income distribution: capital vs. labour The rise of finance Business cycle Growth and instability Expansion, peak, recession, trough Employment / unemployment The political business cycle

2 Nitzan / 3270 GPE I I. Capitalism: A Brief History / 2 Inflation The invisible twin of growth? Stagflation Investment Real vs. financial investment Buy-to-build ratio Government Laissez faire The post-war welfare-warfare state A neoliberal anti-government revolution? Capital flow The globalization of ownership The end of the world as we know it?

3 Nitzan / 3270 GPE I I. Capitalism: A Brief History / 3 SOURCE: Bowles, Samuel, Richard Edwards, and Frank Roosevelt Understanding Capitalism. Competition, Command, and Change. New York and Oxford: Oxford University Press, p. 7

4 Nitzan / 3270 GPE I I. Capitalism: A Brief History / 4 SOURCE: Simon, Julian Lincoln The State of Humanity. Oxford, UK and Cambridge, Mass.: Blackwell in association with the Cato Institute, pp

5 Nitzan / 3270 GPE I I. Capitalism: A Brief History / 5 SOURCE: Diamond, Jared M Guns, Germs, and Steel. The Fate of Human Societies. New York: W.W. Norton & Co., p. 37

6 Nitzan / 3270 GPE I I. Capitalism: A Brief History / 6 SOURCE: Braudel, Fernand Civilization & Capitalism, 15th-18th Century. Trans. from the French and Revised by Sian Reynolds. New York: Harper & Row, Publishers, Vol. 3, pp

7 Nitzan / 3270 GPE I I. Capitalism: A Brief History / 7 SOURCE: Braudel, Fernand Civilization & Capitalism, 15th-18th Century. Trans. from the French and Revised by Sian Reynolds. New York: Harper & Row, Publishers, Vol. 3, pp

8 Nitzan / 3270 GPE I I. Capitalism: A Brief History / 8 SOURCE: Simon, Julian Lincoln The State of Humanity. Oxford, UK and Cambridge, Mass.: Blackwell in association with the Cato Institute, p. 45.

9 Nitzan / 3270 GPE I I. Capitalism: A Brief History / 9 SOURCE: Simon, Julian Lincoln The State of Humanity. Oxford, UK and Cambridge, Mass.: Blackwell in association with the Cato Institute, pp. 8, 31.

10 Nitzan / 3270 GPE I I. Capitalism: A Brief History / 10 SOURCE: Bowles, Samuel, Richard Edwards, and Frank Roosevelt Understanding Capitalism. Competition, Command, and Change. New York and Oxford: Oxford University Press, p. 16.

11 Nitzan / 3270 GPE I I. Capitalism: A Brief History / 11 SOURCE: Bowles, Samuel, Richard Edwards, and Frank Roosevelt Understanding Capitalism. Competition, Command, and Change. New York and Oxford: Oxford University Press, p. 9.

12 Nitzan / 3270 GPE I I. Capitalism: A Brief History / 12 SOURCE: Bowles, Samuel, Richard Edwards, and Frank Roosevelt Understanding Capitalism. Competition, Command, and Change. New York and Oxford: Oxford University Press, p. 12

13 Nitzan / 3270 GPE I I. Capitalism: A Brief History / 13 10, 000 Return on Capital and Labour in the U.S.A. 35 log scale 1, 000 Real Capital Gain and Dividends on the S&P500* (10-year moving average, left) 2,409 1,184 1, =100 Real Hourly Wage in Private Industry (10-year moving average, left) Ratio of Capital Gain and Dividends to Hourly Wage (10-year moving average, right) NOTE: real series are computed by deflating nominal data by the CPI. * Capital gains and dividends is the difference between successive values of the S&P500 Total Return Index. SOURCE: U.S. Bureau of the Census through Global Insight; Global Financial Data (

14 Nitzan / 3270 GPE I I. Capitalism: A Brief History / Industrial Production in the Industrialized Countries (annual % change) Last: June NOTE: Straight lines represent linear trend (middle), trend plus one standard deviation (top) and trend minus one standard deviation (bottom). SOURCE: IMF through Global Insight.

15 Nitzan / 3270 GPE I I. Capitalism: A Brief History / 15 10,000 Consumer Prices in the UK log scale Price increase from 1900 to 2000: 4,867% 1, Price increase from 1300 to 1900: 769% SOURCE: Bichler, Shimshon, and Jonathan Nitzan Dominant Capital and the New Wars. Journal of World-Systems Research 10 (2, August):

16 Nitzan / 3270 GPE I I. Capitalism: A Brief History / 16 Inflation and Growth in the United States 8 7 GDP IMPLICIT PRICE DEFLATOR* (annual % change) GDP IN CONSTANT PRICES (annual % change) NOTE: Figures are smoothed as 20-year moving averages. SOURCE: Bichler, Shimshon, and Jonathan Nitzan Dominant Capital and the New Wars. Journal of World-Systems Research 10 (2, August):

17 Nitzan / 3270 GPE I I. Capitalism: A Brief History / 17 Two Types of Investment 1,000 log scale % 100 Buy-to-Build Ratio (Mergers & Acquisitions as a % of gross fixed capital formation) % 10 1 trend growth rate: 3% per annum % SOURCE: Bichler, Shimshon, and Jonathan Nitzan Dominant Capital and the New Wars. Journal of World-Systems Research 10 (2, August):

18 Nitzan / 3270 GPE I I. Capitalism: A Brief History / General Government Final Consumption Expenditure (% of GDP) High Income Countries Low and Middle Income Countries NOTE: Cutoff point between Middle and High Income countries: $9,385 Gross National Income per Capita. SOURCE: World Development Indicators 2005.

19 Nitzan / 3270 GPE I I. Capitalism: A Brief History / The Globalization of Ownership Foreign Assets / Total Assets SOURCE: Obstfeld and Taylor (2004), Global Capital Markets, pp