Economic Policies for a Post-Neoliberal World (International Papers in Political Economy)

The period of past four decades has been characterized as one of neo-liberalism, financialization, globalization, privatization and de-regulation. Inequality has risen in industrialised countries, labour’s share in national income has been in decline and economic growth slowed. The evidence of the damage to the environment from human economic activity, and the dramatic consequences of failure to address climate change have become more apparent and urgent. The global financial crises shocked the complacency of the neo-liberal era, though a decade later it may be doubted how much has changed. The central purpose of this volume is to investigate a range of economic and social policies, which move in the direction of constructing a post-neoliberal world. These range over alternative forms of ownership (public, co-operative), policies to address and reverse economic and social inequalities, responses to the forces of globalization, re-constituting the financial system and its roles, and the nature of employment. Preface 6 Contents 8 Notes on Contributors 10 List of Figures 16 List of Graphs 18 List of Tables 23 1: Financial Stability: Still Unsettled for the Future 24 1 Introduction 24 2 Financial Stability and Post-GFC Proposals 26 2.1 US Dodd-Frank Act 27 2.2 UK Vickers Report 29 2.3 The European Commission’s Liikanen Report 30 2.4 The IMF Proposal 30 2.5 The Basel III/Basel IV Package 31 3 Further Financial-Stability Problems 33 3.1 Potential Financial Instability 34 4 Required Policies for Financial Stability 40 4.1 Current and Future State of Economies 40 4.2 Required Financial-Stability Policies 49 5 Summary and Conclusions 57 References 58 2: The Future of Capitalism in a Post-Neoliberal World 65 1 Introduction 65 2 The Emergence Spread and Dominance of ‘Neoliberalism’ 69 3 Neoliberalism and the Collapse of Communism 71 4 The Era of ‘Neoliberal’ Hegemony. Is It Coming to an End? 73 5 The Nature, Underlying Causes and Policy Response to the Climate Change Challenge 79 6 The Political Economy of Global Policymaking 84 7 Neoliberalism in the Aftermath of the Crisis Caused by the COVID-19 Pandemic 93 8 Summary and Conclusions 102 References 103 3: Moving People in a Post-Neoliberal Era 107 1 Introduction 107 2 Neoliberalism and ‘Free Movement’ 109 3 Factor Mobility, the Economy and Inequality 111 3.1 Capital Flows, Migration and Growth 112 3.2 Factor Mobility and Inequality: A Closer Look at Migration 114 4 Free Movement of People Between State and Markets 119 5 The Economics of Migration Networks 123 6 Migration Preferences and Political Economy Considerations 124 7 From Locational Choice to Welfare Effects of Migration 127 8 A Choice Between Free Movement of People and Public Services 130 9 Freedom of Movement of Workers: An Annex to Free Trade 131 10 Free Movement of People: A European Case Study 135 10.1 Free Movement of People and Free Movement of Workers 135 10.2 Extending Freedom of Movement 136 10.3 How Free Movement Shifted East 137 11 Bilateral Agreements for Labour Mobility 138 12 Summary and Conclusions 144 Appendix 146 References 149 4: Productivity Slowdown and Inequality: Killing Two Birds with One Stone! 154 1 Introduction 154 2 Literature Review 156 3 Productivity Puzzle 165 4 Inequality and Productivity 173 5 Policies to Tackle This Twin Problem 177 6 Concluding Remarks 188 References 189 5: Environmental Policies to Save the Planet 199 1 Introduction 199 2 Economic Development and Environmental Degradation 201 2.1 The Concept of Natural Capital 201 2.2 The Key Threats to Ecosystem Services 203 2.3 The Response of Neoliberal Economics 204 2.4 The Response of Mainstream Economics 206 2.5 The Choice of the Discount Rate 208 2.6 The Damages That Will Arise from GHG Emissions 211 2.7 The Costs of Abatement/Mitigation 214 2.8 The Treatment of Uncertainty 215 2.9 Is Raising the Carbon Price an Adequate Policy Response? 216 3 What Would Getting to Net-Zero Greenhouse Gas Emissions by 2050 Look Like? 218 3.1 Possible Futures 218 4 Obstacles and Policies 221 4.1 The Macroeconomic Impact 221 4.2 Winners and Losers and Higher Costs for Those Unable to Mitigate the Impact of Carbon Taxes 223 4.3 The Take-Up and Cost of Clean Technologies 227 4.4 The Mobilisation of Finance 230 4.5 A Green New Deal 236 4.6 Making Space for Conservative Environmentalism? 237 5 Summary and Conclusions 237 References 238 6: Public Ownership in the Pursuit of Economic Democracy in a Post-Neoliberal Order 244 1 Introduction 244 2 Privatisation’s Contradictions, Failings and Mutations 248 3 The Return of the State, Public Ownership and the Remunicipalisation Wave 255 4 Two Cheers for Europe’s Municipal Energy Transition 259 5 Decentralised Public Ownership Beyond the Market 267 6 Envisaging Democratic Public Ownership 271 7 Summary and Conclusions 278 References 282 7: Welfare as Freedom, the Human Economy, and Varieties of Capitalist State 288 1 Introduction 288 2 Comparative Capitalism and Human Development 290 2.1 Welfare as Freedom and Liberal Neutrality 290 2.2 The Human Economy, Institutions, and Freedom 296 3 Public Sector Development and Systems of Cooperation in Nordic and Anglo-Saxon States 299 3.1 Actual Equality, State Formation, and Freedom 303 4 Public Finance, Systems of Institutions, and Developmental Coherence in Capitalist States 307 4.1 Progressive Public Finance and Horizontal-Developmental Versus Hierarchical-Competitive Systems 310 5 Public Sector Incorporation and Control of Time, Activities, and Social Relations 316 6 Universal Basic Income and Systems of Well-Being 323 7 Summary and Conclusions 330 Appendix 332 References 356 8: Employment and Wage Policies in a Post-Neoliberal World 364 1 Introduction 364 2 Capitalism as Instituted Economic Process 366 3 Institutions and Inequality 370 4 The ‘Malign Spirit’ of Contemporary Capitalism: Regulatory Competition, Tax Avoidance and the Erosion of the Rule of Law 388 5 New Wage and Employment Policies: Feasibility and Policy Delivery 391 5.1 Stabilising the Employment Relationship 393 5.2 Trends in the Regulation of Precarious and Informal Work 395 5.3 Minimum Wages and Sectoral Collective Bargaining 397 5.4 Public Enforcement of Labour Laws 398 5.5 Labour Rights and International Trade: The Evolving Role of the ILO 399 5.6 Labour Market Measures During the COVID-19 Crisis 400 6 Summary and Conclusions 402 References 404 Index 408