Life after crisis for capital and labor in the era of neoliberal globalization

The aim of this paper is to discuss the outcomes of neoliberal globalization from the perspective of labor in the developing countries, with a particular emphasis on the crises that followed the substantial liberalization in capital accounts in the 1990s. Although a lot has been said about the effects of capital account liberalization on the macroeconomic performance of the economies, less attention is paid to the different effects on labor vs. capital. This paper analyses the outcomes of neoliberal globalization for labor in nine developing countries, and focuses on the episodes of crisis as part of the general class struggle where the question on who will carry the burden of adjustment is a part of the struggle. The paper describes the corner stones of the regime of growth in the neoliberal era, by analyzing the trends in growth, investment, unemployment, and labor's share in income, and discusses the effects of the shocks generated by crises on these variables. We empirically test whether the lower wage share has had any effect on unemployment, as the neoclassical theory claims, or whether unemployment is primarily driven by the goods market conditions a la Keynes. An empirical analysis about the cyclical behaviour of labor's share is carried on to understand whether the crises episodes change the effect of demand on distribution. Since the source of growth can also be important on how the generated output is distributed, we also discuss the effects of investment performance on labor's share. Then we proceed with an analysis of the specific consequences of economic policy choices on distribution, in terms of exchange rate and fiscal policies. Finally we discuss the core stones of an alternative policy framework. (author's abstract)Series: Working Papers Series "Growth and Employment in Europe: Sustainability and Competitiveness

On overtwisted contact surgeries

In this note, we obtain a new result concluding when contact (+1/n)-surgery is overtwisted. We give a counterexample to a conjecture by James Conway on overtwistedness of manifolds obtained by contact surgery. We list some problems related to the contact surgery.Comment: 6 pages, 1 figur

Distribution and Globalization: A Wage Bargaining Model

This paper develops a model of distribution to analyze the effects of neoliberal globalization on labor in the developing countries. Distribution is determined via wage bargaining by workers, price setting by firms, and improvements in productivity. The full model has the nature of a Post-Keynesian conflicting claims model for an open economy under the pressure of globalization. The conflict inflation is extended to an open economy case with imported inputs, where the pass through effect of the depreciation of the local currency also becomes important. The variables that reflect the macroeconomic effects of globalization are modeled as parameters that affect the bargaining power of labor on two levels: the first group is related with the interaction with the global economy, i.e. international trade, and FDI. The second is about the domestic fiscal and monetary policy variables, which are particularly related to the specific form that globalization takes in the era of neoliberalism, i.e. government expenditures, and the interest rate. Then the model is solved for distribution of income, i.e. the wage share, thus a reduced form of the model is obtained, which is estimated in a companion paper to test whether the change in the international and domestic macroeconomic environment has affected the decline the labor’s share.Labor’s share, neoliberal policies, globalization

Life After Crisis For Labor And Capital in the Era of Neoliberal Globalization

The aim of this paper is to discuss the outcomes of neoliberal globalization from the perspective of labor in the developing countries, with a particular emphasis on the crises that followed the substantial liberalization in capital accounts in the 1990s. Although a lot has been said about the effects of capital account liberalization on the macroeconomic performance of the economies, less attention is paid to the different effects on labor vs. capital. This paper analyses the outcomes of neoliberal globalization for labor in nine developing countries, and focuses on the episodes of crisis as part of the general class struggle where the question on who will carry the burden of adjustment is a part of the struggle. The paper describes the corner stones of the regime of growth in the neoliberal era, by analyzing the trends in growth, investment, unemployment, and labor’s share in income, and discusses the effects of the shocks generated by crises on these variables. We empirically test whether the lower wage share has had any effect on unemployment, as the neoclassical theory claims, or whether unemployment is primarily driven by the goods market conditions a la Keynes. An empirical analysis about the cyclical behaviour of labor’s share is carried on to understand whether the crises episodes change the effect of demand on distribution. Since the source of growth can also be important on how the generated output is distributed, we also discuss the effects of investment performance on labor’s share. Then we proceed with an analysis of the specific consequences of economic policy choices on distribution, in terms of exchange rate and fiscal policies. Finally we discuss the core stones of an alternative policy framework.Labor’s share, developing countries, crisis, neoliberal policies, globalization

Fiscal Crisis in Europe or a Crisis of Distribution?

We are in a new episode of the global crisis: the struggle to distribute the costs of the crisis. The financial speculators and corporations are relabeling the crisis as a “sovereign debt crisis” and pressurizing the governments in diverse countries ranging from Greece to Britain to cut spending to avoid taxes on their profits and wealth. In Europe the crisis laid bare the historical divergences. At the root of the problem is the neoliberal model which turned the periphery of Europe into markets for the core. The restrained policy framework, which is based on strict inflation targeting, and which lacks fiscal transfers targeting productive investments in the periphery is the main cause of the divergences. The EU’s current policies are still assuming that the problem is a lack of fiscal discipline and do not question the structural reasons behind the deficits and the “beggar my neighbor” policies of Germany. The deflationary consequences of wage cuts may turn the problem of debt to insolvency for private as well as the public sector.The crisis calls for a major change in policy framework within Europe that places regional and social cohesion at the core of policy making. This is a crisis of distribution and a reversal of inequality at the expense of labor is the only real solution.

Legendrian rational unknots in lens spaces

We classify Legendrian rational unknots with tight complements in the lens spaces L(p,1) up to coarse equivalence. As an example of the general case, this classification is also worked out for L(5,2). The knots are described explicitly in a contact surgery diagram of the corresponding lens space.Comment: 25 pages, 12 figure

Legendrian lens space surgeries

We show that every tight contact structure on any of the lens spaces $L(ns^2-s+1,s^2)$ with $n\geq 2$, $s\geq 1$, can be obtained by a single Legendrian surgery along a suitable Legendrian realisation of the negative torus knot $T(s,-(sn-1))$ in the tight or an overtwisted contact structure on the 3-sphere.Comment: 16 pages, 8 figure

Financialisation and physical investment: a global race to the bottom in accumulation?

We estimate the effects of financialisation on physical investment in the developed and developing countries using panel data based on balance-sheets of publicly listed non-financial companies (NFCs) for the period 1995-2015. Among the developed economies, we focus on the cases of the USA, Japan, and a group of Western European countries. In the developing world, we present estimations based on the group of the NFCs in all developing countries as well as BRICS as a group- and country specific estimations for South Africa, South Korea, India, and China. We find robust evidence of an adverse effect of both financial payments (interests and dividends) and financial incomes on investment in fixed assets. The negative impacts of financial incomes are non-linear with respect to the companies’ size; financial income crowds out investment in large companies, and have a positive effect on the investment of only smaller, relatively more credit-constrained companies. Our findings support the ‘financialisation thesis’ that the increasing orientation of the non-financial sector towards financial activities is ultimately leading to lower physical investment, hence to stagnant or fragile growth, as well as long term concerns for productivity in both developed and developing countries