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on Post Keynesian Economics |
| By: | James K. Galbraith (The University of Texas at Austin) |
| Abstract: | This essay analyzes a few prominent Western assessments, both official and private, of the effect of sanctions on the Russian economy and war effort. It seeks to understand the main goals of sanctions, alongside bases of fact and causal inference that underpin the consensus view that sanctions have been highly effective so far. Such understanding may then help to clarify the relationship between claims made by economist-observers outside Russia and those emerging from sources inside Russia - notably from economists associated with the Russian Academy of Sciences (RAS) - which draw sharply different inferences from the same facts. We conclude that when applied to a large, resource-rich, technically proficient economy, after a period of shock and adjustments, sanctions are isomorphic to a strict policy of trade protection, industrial policy, and capital controls. These are policies that the Russian government could not plausibly have implemented, even in 2022, on its own initiative. |
| Keywords: | Sanctions, Russia |
| JEL: | F51 |
| Date: | 2023–04–10 |
| URL: | http://d.repec.org/n?u=RePEc:thk:wpaper:inetwp204&r=pke |
| By: | Marie Carpenter (Institut Mines-Telecom Business School); William Lazonick (The Academic-Industry Research Network) |
| Abstract: | Once the global leader in telecommunication systems and the Internet, over the past two decades the United States has fallen behind global competitors, and in particular China, in mobile communication infrastructure specifically 5G and Internet of Things (IoT). This national failure, with the socioeconomic and geopolitical tensions that it creates, is not due to a lack of US government investment in the knowledge required for the mobility revolution. Nor is it because of a dearth of domestic demand for the equipment, devices, and applications that can make use of this infrastructure. Rather, the problem is the dereliction of key US-based business corporations to take the lead in making the investments in organizational learning required to generate cutting-edge communication-infrastructure products. No company in the United States exemplifies this deficiency more than Cisco Systems, the business corporation founded in Silicon Valley in 1984 that had explosive growth in the 1990s to become the foremost global enterprise-networking equipment producer in the Internet revolution. This paper provides in-depth analysis of Cisco's organizational failure, attributing it ultimately to the company's turn from innovation in the last decades of 20th century to financialization in the early decades of the 21st century. Since 2001, Cisco's top management has chosen to allocate corporate cash to open-market share repurchases aka stock buybacks for the purpose of giving manipulative boosts to the company stock price rather than make the investments in organizational learning required to become a world leader in communication-infrastructure equipment for the era of 5G and IoT. From October 2001 through October 2022, Cisco spent $152.3 billion - 95 percent of its net income over the period - on stock buybacks for the purpose of propping up its stock price. These funds wasted in pursuit of "maximizing shareholder value" were on top of the $55.5 billion that Cisco paid out to shareholders in dividends, representing an additional 35 percent of net income. In this paper, we trace how Cisco grew from a Silicon Valley startup in 1984 to become, through its innovative products, the world leader in enterprise-networking equipment over the next decade and a half. As the company entered the 21st century, building on its dominance of enterprise-networking, Cisco was positioned to upgrade its technological capabilities to become a major infrastructure-equipment vendor to service providers. We analyze how and why, when the Internet boom turned to bust in 2001, the organizational structure that enabled Cisco to dominate enterprise networking posed constraints related to manufacturing and marketing on the company's growth in the more sophisticated infrastructure-equipment segment. We then document how from 2002 Cisco turned from innovation to financialization, as it used its ample profits to do stock buybacks to prop up its stock price. Finally, we ponder the larger policy implications of Cisco's turn from innovation to financialization for the competitive position of the US information-and-communication-technology (ICT) industry in the global economy. |
| Keywords: | Cisco Systems, communication technology, enterprise networking, strategic control, organizational integration, financial commitment, acquisitions, stock-based compensation, share repurchasers, dividends, shareholder value, global competition, innovation, financialization. |
| JEL: | D20 E22 E23 E24 G34 G35 L21 L22 L63 M10 N81 O16 O32 |
| Date: | 2023–02–21 |
| URL: | http://d.repec.org/n?u=RePEc:thk:wpaper:inetwp202&r=pke |
| By: | Catherine E. A. Mulligan; Phil Godsiff |
| Abstract: | The increasing use of data in various parts of the economic and social systems is creating a new form of monopoly: data monopolies. We illustrate that the companies using these strategies, Datalists, are challenging the existing definitions used within Monopoly Capital Theory (MCT). Datalists are pursuing a different type of monopoly control than traditional multinational corporations. They are pursuing monopolistic control over data to feed their productive processes, increasingly controlled by algorithms and Artificial Intelligence (AI). These productive processes use information about humans and the creative outputs of humans as the inputs but do not classify those humans as employees, so they are not paid or credited for their labour. This paper provides an overview of this evolution and its impact on monopoly theory. It concludes with an outline for a research agenda for economics in this space. |
| Date: | 2023–07 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2307.08049&r=pke |
| By: | Eslava, Francisco; Valencia Caicedo, Felipe |
| Abstract: | How deep are the roots of Latin America’s economic inequalities? In this chapter we survey both the history and the literature about the region’s extreme economic disparities, focusing on the most recent academic contributions. We begin by documenting the broad patterns of national and sub-national differences in income and inequality, building on the seminal contributions of Engerman and Sokoloff (2000; 2002, 2005) and aiming to capture different dimensions of inequality. We then proceed thematically, providing empirical evidence and summarizing the key recent studies on colonial institutions, slavery, land reform, education and the role of elites. Finally, we conduct a “replication” exercise with some seminal papers in the literature, extending their economic results to include different measures of inequality as outcomes. |
| Keywords: | inequality; Latin America; history; colonization; persistence; slavery; land reform; education; elites |
| JEL: | J1 N0 |
| Date: | 2023–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:119763&r=pke |
| By: | Lutz Sager |
| Abstract: | Air pollution generates substantial health damages and economic costs worldwide. Pollution exposure varies greatly, both between countries and within them. However, the degree of air quality inequality and its' trajectory over time have not been quantified at a global level. Here I use economic inequality indices to measure global inequality in exposure to ambient fine particles with 2.5 microns or less in diameter (PM2.5). I find high and rising levels of global air quality inequality. The global PM2.5 Gini Index increased from 0.32 in 2000 to 0.36 in 2020, exceeding levels of income inequality in many countries. Air quality inequality is mostly driven by differences between countries and less so by variation within them, as decomposition analysis shows. A large share of people facing the highest levels of PM2.5 exposure are concentrated in only a few countries. The findings suggest that research and policy efforts that focus only on differences within countries are overlooking an important global dimension of environmental justice. |
| Date: | 2023–07 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2307.15669&r=pke |