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We build a tractable heterogeneous-agent incomplete-markets model with quasi-linear preferences to address a set of long-standing issues in the optimal Ramsey taxation literature. The tractability of our model enables us to analytically prove the existence of the Ramsey steady state and establish several novel results within standard parameter spaces: (i) The failure of the modified golden rule (MGR) cannot by itself justify a positive steady-state capital tax—we prove that in the absence of wealth-redistribution effects the optimal capital tax is exclusively zero in the Ramsey steady state regardless of the validity of the MGR. (ii) The optimal capital tax is positive only along the transition path, and it depends positively on the elasticity of intertemporal substitution. (iii) The optimal debt-to-GDP ratio, however, is determined by a positive wedge times the MGR saving rate. The key insight behind our results is that in the absence of any wealth-redistribution effects, taxing capital in the steady state cannot eliminate the liquidity premium—the primal friction in the model—but instead permanently erodes individuals' buffer-stock savings and self-insurance position; thus, the Ramsey planner opts to issue debt rather than impose a steady-state capital tax to correct the capital-overaccumulation problem whenever the interest rate lies below the time discount rate. Also, the MGR fails to hold in a Ramsey equilibrium whenever the government encounters a binding debt limit; but even in this case the optimal long-run capital tax is zero. Therefore, if there is a reason to tax capital in the Ramsey steady state, it may have something to do with the tax's effect on wealth redistribution rather than on the failure of the MGR due to capital overaccumulation.

Since the end of the Bretton Woods system and the stagflation of the 1970s, the transatlantic core, under the leadership of the United States of America, has been trying to expand its model of free market capitalism embracing every part of the globe, while addressing its domestic overaccumulation crisis. This article follows a historical methodological perspective and draws from the concept of Uneven and Combined Development (UCD), which helps us consider the structural reasons behind the long and protracted decline of the American economic power. In this respect, according to the UCD concept, there is no global power that can enjoy the privilege for being at the top of the global capitalist system forever in a world which develops unevenly and in a combined way. Power shifts across the world and new powers come to challenge the current hegemonic power and its alliance systems. The novelty of the article is that it locates this decline in the 1970s and considers it as being consubstantial with the state economic policy of neo-liberalism and financialisation (supply-side economics). However the financialised capitalism of the transatlantic assemblage lack industrial base producing, reproducing and recycling real commodity values. Further, the article shows that this attempt to remain at the top of the global capitalist system forever has not been successful, not least because the regime which the recovery of the core had rested upon, that of neo-liberal financialisation represents a major vulnerability of the transatlantic assemblage eroding the primacy of the United States of America in it.

The 2030 Sustainable Development Agenda rests on both economic growth and Inclusive Development (ID). However, since growth is entangled with socio-ecological exploitation and appropriation, it conflicts with ID where ‘inclusive’ encompasses social, ecological and relational dimensions, and fundamentally redefines ‘development’. Using Toulmin’s argumentative model, we show that: (a) inclusive green growth does not promote socio-ecological inclusion and ignores relational inclusion, as economic growth cannot be optimized towards those broader aims; (b) policies for inclusion through pro-poor ‘access’ without ‘re-allocation’ of resources are self-defeating, as inequitable allocation of wealth and of a limited environmental utilization space impoverishes the poor and transfers ecological risks to them; (c) ‘re-allocation’ requires a post-growth agenda involving a downscaling of overconsumption and overaccumulation by the global Centers, and a redefinition of development by the Peripheries; and (d) such an agenda is obstructed by the unequal distribution of wealth and political power. The only way forward is when science and social movements converge to demand system change on the streets and in the courts.

This article builds on Marxist-feminist analyses of the links between the household, the economy, and the state through a discussion of recycling, pointing to the ways the unwaged work of household waste sorting contributes to capitalism’s crisis-prone dynamic of overaccumulation. Household waste sorting is an instance of work transfer – a reorganization of labor and day-to-day life by the state and industry in which production is shifted from industry into households without compensation. A periodization of ‘waste regimes’ reveals how the state management of waste both mirrors and is implicated in accumulation regimes, their crises, and their resolutions. The current recycling crisis demonstrates the contradictory nature and futility of recycling in capitalism, and the specific manner in which the work transfer involved in household waste sorting contributes to accumulation and crisis.

This paper deals with issues arising in Solow's growth model when contrasted with Marx's schemes of expanded reproduction. More specifically, we argue that Solow's growth model lacks the crucial dynamic features of capital accumulation derived from the long-term movement of the rate of profit, which are well integrated in classical political economy. Classical economists discussed the attainment of the stationary state of the economy as a result of a falling rate of profit eliminating net investment. In Solow's growth model, however, the seemingly stationary state is proved to be a ‘saddle’ point, an aspect that has not received appropriate attention in the extant economic growth literature. By contrast, in Marx's analysis of absolute overaccumulation resulting from the falling profit rate the system is driven to a turning point and the conditions for major institutional changes that may lead to a new period of economic expansion are set.

Tim Zajontz’s research for this article was conducted under a European Research Council (ERC) Advanced Grant for the project African Governance and Space: Transport Corridors, Border Towns and Port Cities in Transition (AFRIGOS) [ADG-2014-67085 Mounting overaccumulation of capital and material has compelled the Chinese government to seek solutions overseas. The Belt and Road Initiative (BRI), with its transregional infrastructure projects connecting Eurasia and Africa, is the hallmark venture in this effort. Chinese road, railway, port and energy projects, implemented under the BRI banner, have become widespread in Africa. This article traces drivers of the BRI in the post-reform evolution of the Chinese economy and conceptualises the BRI as a multi-vector “spatial fix” aimed at addressing chronic overaccumulation. Focusing on Kenya, Djibouti and Ethiopia, the paper documents how loan financing related to BRI projects reveals contradictions that arise from China’s spatial fix in Africa. Concerns about a looming debt crisis on the continent and the questionable economic sustainability of some BRI projects have become more pressing amidst the COVID-19-induced economic contraction. Hopes for Africa’s economic transformation based on increasing connectivity under the BRI are unlikely to materialise. Publisher PDF

There is an ongoing debate as to whether Chinese capital can be described as developmental. While some argue that Chinese capital is simply a tool of the Chinese state to exploit the global South, others claim that Chinese capital opens new development opportunities. Rather than advancing a framework based upon either an exploitative or an egalitarian mode of development, this article argues that China's current crisis of overaccumulation has led to a so‐called Sino‐centric capital export regime, which sends out two types of capital to the global South. First, state‐backed capital imposes a development model by modifying ‘local orders’, attempting to make host states legible by creating maps of peoples and terrains that surround China. These maps aim to improve China's ability to manage inter‐state disputes. Second, flexible capital is interested in extricating itself from the conditions imposed on it in China. By moving into the global South, flexible capital breaks through the barriers placed by the Chinese state. As a by‐product of this quest for extrication, flexible capital can generate new venues of accumulation and novel ways of organizing production. This article demonstrates these two types of capital using examples from Rodrigo Duterte's Philippines — the Kaliwa Dam project and online gambling — drawing on original field research and a newly generated dataset.

This study begins by confirming that China today has been in a severe state of overaccumulation, which jeopardizes the sustainable development and economic potential of Chinese economy. Against this backdrop, we employ the generalized method of moments (GMM) to investigate the determinants of Chinese household saving. We present novel evidence on saving behaviors and identify a part of important empirical regularities. More importantly, we find that factors that have contributed to China’s economic success (e.g., the SOE reform) are primarily responsible for the excess saving problem, and those generally deemed to be negative factors (e.g., real estate bubble) have essentially mitigated the surplus saving. This evidence indicates that China has achieved economic success through capital-extensive growth models, which rely critically on excess investment and saving accumulation. We emphasize the imperative for Chinese economy to rebalance its growth model and create a more consumption-oriented environment. We also emphasize the importance of analytical stance in deriving constructive policy prescriptions.

Ao longo de toda a história do pensamento econômico, foram feitas diversas tentativas para identificar os motivos e as maneiras pelas quais o modo de produção capitalista se movimenta em ciclos, com fases de expansão e de crise. Um ramo desse pensamento observa as crises como consequências de modificações exógenas à acumulação capitalista. Enquanto as teorias marxistas consideram a crise a partir do próprio dinamismo interno do modo de produção capitalista. Entre estas últimas teorias, existem três vertentes: a) superacumulação de capital, b) subconsumo e c) compressão dos lucros (profit-squeeze). Desse modo, o objetivo é identificar as causas da crise da economia capitalista no Brasil entre 2014 e 2016, de acordo com as teorias marxistas de crise. Para a execução deste trabalho, são expostas no segundo capítulo as considerações teóricas dos autores representativos de cada uma dessas vertentes. No capítulo seguinte, para mostrar como as crises são expressas empiricamente, a categoria taxa de lucro é analisada, desde os argumentos de Marx sobre a transformação da taxa de mais-valor em taxa de lucro até as suas diferentes formas e métodos de cálculo. No quarto e último capítulo, ocorre uma análise da economia capitalista no Brasil, com ênfase nos elementos que compõem a taxa de lucro brasileira. Como resultado, notou-se que a taxa de lucro desse país já estava decrescendo, mesmo antes do início da crise brasileira, o que levou a valorização imperfeita do capital e contribuiu para os conflitos políticos entre as diferentes classes e no interior delas. Throughout the history of economic thought, several attempts have been made to identify the reasons and the ways in which the capitalist mode of production moves in cycles, both of expansion and of crisis. One branch of this thinking sees crises as consequences of exogenous changes to capitalist accumulation. While Marxist theories consider the crisis from the very internal dynamism of the capitalist mode of production. Among these last theories, there are three aspects: a) overaccumulation of capital, b) underconsumption and c) profit-squeeze. Thus, the objective is to identify the causes of the crisis of the capitalist economy in Brazil between 2014 and 2016, according to Marxist theories of crisis. For the execution of this work, the theoretical considerations of the representative authors of each of these aspects are exposed in the first chapter. In the following chapter, in order to show how crises are empirically expressed, the category of profit rate is analyzed, from Marx's arguments about the transformation of the rate of surplus value into a rate of profit to its different forms and methods of calculation. In the third and final chapter, there is an analysis of the capitalist economy in Brazil, with emphasis on the elements that make up the Brazilian rate of profit. As a result, it was noted that the rate of profit in that country was already decreasing, even before the beginning of the Brazilian crisis, which led to an imperfect valorization of capital and contributed to the political conflicts between and within the different classes.

Limited parking space in urban environments has a severe social and environmental impact, because of time loss and unnecessary pollution while looking for free parking spaces. In a recent effort, we have developed the SocialPARK ecosystem to tackle this problem through the activation of a community of interacting citizens, parking companies and municipalities. SocialPARK offers an integrated platform for the provision of personalized parking functionalities as a service, auditing parking availability information through a crowdsourcing approach that gathers relevant information provided by users, parking vendors and municipalities. In this context, a central challenge in delivering trustworthy parking services is to ensure a truthful behavior of the involved (possibly unreliable) users. Towards this direction, we present two rewarding schemes that provably incentivize users to behave truthfully. Both schemes are based on virtual credits (points) that users earn for providing parking availability information. Apart from incentivizing truthful behavior, our schemes cater for point circulation, do not allow point overaccumulation, and prevent malicious users to aggregate points by misreporting.

We model parents’ fertility and child-raising spending decisions as a Tullock contest with budget constraints and prizes that depend on relative efforts. We show that if the consequences of failure and the intensity of competition are sufficiently high, some potential parents forego having children in the resulting equilibrium. Moreover, parents having children prefer to have only one child and allocate all of their resources to raising that child rather than have multiple children. The equilibrium is consistent with the recent East Asian fertility experience and, more broadly, shows that competitive pressure, when combined with a high degree of inequality or poor social protection, can lead to an overaccumulation of human capital and low fertility.

The tendency of capital to ‘overaccumulate’ has on occasion been severe in post-apartheid South Africa, but has taken different forms. The neoliberal era since the early 1990s has witnessed overacc...

South Africa hosts Africa's most advanced form of the new Blue Economy, named 'Operation Phakisa: Oceans.' In 2014, the McKinsey-designed project was formally launched by now-disgraced President Jacob Zuma with vibrant state and corporate fanfare. Financially, its most important elements were anticipated to come from corporations promoting shipping investments and port infrastructure, a new generation of offshore oil and gas extraction projects and seabed mining. However, these already conflict with underlying capitalist crisis tendencies associated with overaccumulation (overcapacity), globalization and financialization, as they played out through uneven development, commodity price volatility and excessive extraction of resources. Together this metabolic intensification of capital-nature relations can be witnessed when South Africa recently faced the Blue Economy's ecological contradictions: celebrating a massive offshore gas discovery at the same time as awareness rises about extreme coastal weather events, ocean warming and acidification (with profound threats to fast-bleaching coral reefs), sea-level rise, debilitating drought in Africa's main seaside tourist city (Cape Town), and plastic infestation of water bodies, the shoreline and vulnerable marine life. Critics of the capitalist ocean have demanded a greater state commitment to Marine Protected Areas, support for sustainable subsistence fishing and eco-tourism. But they are losing, and so more powerful resistance is needed, focusing on shifting towards post-fossil energy and transport infrastructure, agriculture and spatial planning. Given how climate change has become devastating to vulnerable coastlines – such as central Mozambique's, victim of two of the Southern Hemisphere's most intense cyclones in March-April 2019 – it is essential to better link ocean defence mechanisms to climate activism: global youth Climate Strikes and the direct action approach adopted by the likes of Dakota Access Pipe Line resistance in the US, Extinction Rebellion in Britain, and Ende Gelande in Germany. Today, as the limits to capital's crisis-displacement tactics are becoming more evident, it is the interplay of these top-down and bottom-up processes that will shape the future Blue Economy narrative, giving it either renewed legitimacy, or the kind of illegitimacy already experienced in so much South African resource-centric capitalism. Keywords: Blue Economy, capitalist crisis, Oceans Phakisa, resistance, South Africa

Rosewood has become the world’s most trafficked group of endangered species, with global seizure values surpassing that of ivory, rhino horn, and big cats combined. This is almost entirely attributable to growth in demand from China over the past two decades. Since 2000, classical rosewood furniture that dates back to the Ming Dynasty has been revived as a hot cultural commodity. This article explores China’s recent rosewood renaissance, which has brought annual market sales up to nearly $26 billion. In contrast to accounts that attribute Chinese demand for endangered species to the conspicuous consumption of a rising elite, I focus on the speculative aspect of the demand. I argue that China’s rosewood boom is largely the result of speculative investment that functions as a “cultural fix” to the country’s growing problem of capital overaccumulation. As with Harvey’s spatial fix, a cultural fix pioneers new productive outlets for the accumulation of surplus value. Unlike Harvey’s spatial fix, however, a cultural fix seeks these new productive outlets in cultural realms—specifically, through the mutual convertibility of cultural and economic capital, as defined by Bourdieu. Given the oversaturation of more conventional investment avenues, Chinese investors have increasingly turned to rosewood and other culturally important endangered resources, such as ivory, rhino horn, and tiger parts, as a new outlet for the accumulation of surplus value. More than conspicuous consumption, China’s rosewood boom is the result of rampant financial speculation resulting from a cultural fix. Key Words: China, cultural capital, endangered species, overaccumulation, spatial fix.

We describe a model in which bank deposits yield liquidity services and therefore earn a lower rate of return than bank equity. In this sense, deposits are a cheaper source of funding than equity. The bank’s equilibrium capital structure is determined by a trade-off between the funding advantages of deposits and the risk of costly default. Default is costly because banks assets are sold in fire sales, which transfer value to the purchasers. This transfer is a private cost for the owners of failed banks, but not a deadweight loss for society. As a result, deposits are under-used and banks’ funding costs receive a subsidy from depositors. This subsidy eventually causes banks to grow too large and accumulate too many assets.

Ten years ago, now, the Eurozone began to shake on its foundations. This article traces the genesis of the crisis and the present state of affairs. As to the causes of the global financial crisis in 2008, I argue that contrary to common understanding, the financial crisis had its deeper causes in a decades old tendency towards crisis in the real economy, produced by the continuous overaccumulation of capital which can only return profits by undertaking speculative short-term investments (a phenomenon known as ‘financialisation’). I then trace how the global financial crisis morphed into a crisis of public deficits and debt in 2010-2011, particularly in the Eurozone. Three factors are shown to be responsible: financialization, design faults in the European monetary union, and the neo-mercantilist strategy of especially Germany and the Netherlands. The paper next looks at the five main traits of the policy responses in the Eurozone: bailing out governments and banks through creating emergency funds; imposition of austerity and budget discipline for member state governments; attempting to create and complete a Eurozone banking union; subsequently the European Central Bank engaged on an unprecedented scale in ‘quantitative easing’; and finally, institutional reform in an attempt to repair the most pressing design faults of the EMU. The paper concludes that the underlying structural factors leading up to the crisis have only been addressed incompletely: the overaccumulation of capital continues, the completion of the banking union is in an impasse, quantitative easing has mostly just intensified financialization by pushing up asset prizes, and institutional reform has taken the form of a fundamentally undemocratic attempt at monetary and political union by stealth. The broader legitimacy of the European project has been substantially undermined, and Europe is not in a better position than eight years ago in case of a new global crisis.

The publication justifies the appearance of cyclic processes in the economic environment occurring under the influence of changes in the correlation between production factors. Conclusions as to the impact of the change in the production factor structure on the economic development dynamics are drawn based on the performed classification of views on the reasons of economic crises expressed by various economic currents, such as: the German historical school, Marxism, Keynesianism and others. The authors separate monetary and non-monetary factors of overaccumulation as reasons of the existence of cyclical behaviour and justify their influence on the economic crisis origination. An economic cycle is viewed in relation to the interaction between production factors and industrial and financial capitals. The research brings technologies into sharp focus. Being developed so rapidly, they take the form of shocks. Technologic shocks are sudden fluctuations of the marginal productivity and cost of production factors. We assume that shocks adequately explain positive economic activity deviations. According to such paradigm suggesting that the change in the cycle phases is based on technologies, which are currently undergoing major development, it may be assumed that further economic development dynamics will depend on the stability of functioning of IT infrastructure. The results of this article may well be used by companies planning incorporation of foreign representative offices and choosing production factors stipulating operational cost cutting as well as credit subdivisions of banks analyzing prospects of the branch of a corporate borrower applying to the financial institution for a loan.

We design an infinite-horizon heterogeneous-agents and incomplete-markets model to demonstrate analytically that in the absence of any redistributional effects of government policies, optimal capital tax is zero despite capital overaccumulation under precautionary savings and borrowing constraints. Our result indicates that public debt is a better tool than capital taxation to restore aggregate productive efficiency.

The article provides a reasonable explanation for Exxonmobil's unprecedented expulsion from the Dow Jones Industrial Average on August 31, 2020 based on the Kondratieff Wave Concept and Capital Overaccumulation Theory. Authors of this paper suggest that the crisis in the oil market in 2020, triggered by the coronavirus, was expected and could be explained by the economic origins of development, namely, the change of the 5th technological mode to the 6th one. Taking into account the fact that oil is the main energy source of the 5th technological mode, it is obvious that its change will affect the oil market. At the same time, the process of the oil market losing its positions is not spontaneous, since the intensive development of new technologies and a sharp increase in renewable energy investments have led to a decrease in oil consumption.

The aggregate capital stock in a nation can be overaccumulated for many different reasons. This paper studies which policy or policy mix is more effective in achieving the socially optimal (golden rule) level of aggregate capital stock in an infinite-horizon heterogeneous-agents incomplete-markets economy where capital is over-accumulated for two distinct reasons: (i) precautionary savings and (ii) production externalities. By solving the Ramsey problem analytically along the entire transitional path, we show that public debt and capital taxation play very distinct roles in dealing with the overaccumulation problem. The Ramsey planner opts neither to use a capital tax to correct the overaccumulation problem if it is caused solely by precautionary saving---regardless of the feasibility of public debt---nor use debt (financed by consumption tax) to correct the overaccumulation problem if it is caused solely by pollution---regardless of the feasibility of a capital tax. The key is that the modified golden rule has two margins: an intratemporal margin pertaining to the marginal product of capital (MPK) and an intertemporal margin pertaining to the time discount rate. To achieve the MGR, the Ramsey planner needs to equate not only the private MPK with the social MPK but also the interest rate with the time discount rate---neither of which is equalized in a competitive equilibrium. Yet public debt and a capital tax are each effective only in calibrating one of the two margins, respectively, but not both.

Contains fulltext : 230144.pdf (Publisher’s version ) (Closed access) Shadow banking, understood as credit intermediation by non-depository financial institutions, or lending by the so-called non-banks or quasi-banks, has been on the rise before and after the 2008 crisis in many parts of the world. This chapter locates the emergence and the rise of shadow banking both theoretically and empirically in the structural and recurring problem of overaccumulation, referring to a situation when surplus capital cannot be profitably reinvested in the realm of production. Overaccumulation has become manifest in abundance of liquid capital searching for yield in the financial circulation sphere. This chapter demonstrates that shadow banking not only offers a machinery that absorbs and processes overaccumulated surplus capital, but also provides an infrastructure for improving the liquidity basis for ordinary banks to leverage the issuance of new debt. The expansion of shadow banking, in other words, is intimately linked to the unprecedented growth of global debt levels. As long as economies can take on more debt and provide assets to feed to global financial system, shadow banking will be likely to increase further. However, once the productive capacity and future income and the accumulation of debt are too much out of sync, and debtors cannot service their debt, a crisis emerges—a crisis that promises to be far bigger than what we witnessed in 2008.