Global Capitalism Presentation
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Transcript of Global Capitalism Presentation
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Global Capitalist Crisis: the Past, the Present, and the Future
Dr. Minqi Li, Associate Professor
Department of Economics, University of Utah
Salt Lake City, Utah
E-mail: [email protected]
Webpage: content.csbs.utah.edu/~mli
2013
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Long Waves and Institutional Changes • UK Hegemony, “Financial Expansion”, Small Government Monopoly Capitalism (Expansion 1893-1913; Structural Crisis 1913-1945) • US Hegemony, “Material Expansion”, Big Government Monopoly Capitalism (Expansion 1945-1973; Structural Crisis 1973-1991) • US Hegemony, “Financial Expansion”, Neoliberal Capitalism (Expansion 1991-2007; Structural Crisis 2007-?)
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The Structural Crisis of 1914-1945 • Decline of UK Hegemony: intensification of interstate conflicts • Challenges of Western Working Classes • Challenges of Non-Western National Liberation Movements • Fundamental Instability of Small Government Capitalism
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Global Capitalist Restructuring, 1945 • Pax Americana: Yalta Agreement; Cold War • Core: welfare state; capital-labor accord (accommodation of western working classes) • Periphery / Semi-Periphery: decolonization / import-substitution industrialization (accommodation of national liberation movements) • Big Government Keynesianism: stabilizing the unstable economy
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The Structural Crisis of 1973-1991 • Relative Decline of US Hegemony • Growing Working Class Power in the Core / Semi-Periphery: declines of profit rates • The Minskian Paradox: socialization of investment risks without socialization of investment • Peak US Oil Production: OPEC achieved quasi-monopoly over the global oil market
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Global Capitalist Restructuring, 1989 • Revival of US Hegemony: financialization; Reagan re-armament • Breaking the Working Class Power in the Core: monetarism; global capital relocation • Destruction of the Historical Semi-Periphery: structural adjustments; shock therapies • Rise of China: massive expansion of global reserve army of cheap labor
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The Structural Crisis of Neoliberalism • (Resumed) Decline of US Hegemony • Neoliberal Global Economy: tendencies towards stagnation and financial instabilities necessitated export-led growth • Global Imbalances: US ran current account deficits / China, Japan, Germany, oil exporters ran current account surpluses • World Oil Production Stagnation: oil price surge 2003-2008
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Global Capitalist Restructuring? • Decline of US Hegemony: what will be next? China? • The Geographic Expansion of the Semi-Periphery: rising global labor and resources costs? • The Minskian Paradox: can capitalism be stabilized, and at what cost? • Global Environmental Crisis: peak oil; climate change
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Big Government Capitalism • C + I + G + NX = W + Π + T • Π = I + (C-W) + (G-T) + NX • Big Government: stabilizing capitalist profits during recessions • Central Bank: stabilizing capital asset prices during financial crises
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Minskian Paradox • Modern Capitalism: cannot function without big government • Big Government: socialization of investment risks without socialization of investment • Private Sector: excessive risk-taking; tendency towards financial instability • Financial Crisis: forcing the government to intervene; rising costs of intervention (inflation, debt)
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Economic and Financial Indicators of American Capitalism, 1875-2007 Small
Government (1875-1929)
Early Big Government (1948-1979)
Neoliberalism
(1983-2007) Fed. gov. expenditures as % of GDP
3.3 18.7 20.8
Ave. ann. growth rate of real GDP
3.8 3.8 3.3
Ave. ann. growth rate of per capita real GDP
1.9 2.4 2.2
Unemployment rate
5.6a 5.2 5.8
Inflation rate
1.0 3.7 2.6
Real interest rate
3.8 1.6 5.5
Business failures per 10,000 firms
100 42 86b
Bank failures per 10,000 banks
106 5 70
a 1890-1929; b 1983-2005
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The Fiscal Dilemma • Fiscal Contraction Recession • Fiscal Accommodation: private sector surplus (3% of GDP) + current account deficit (3% of GDP) government sector deficit (6% of GDP) • Long-Term Government Debt: deficit (6% of GDP), nominal GDP growth rate (4%) debt-GDP ratio (150%) • Can a Fundamentally Unstable Capitalism Be Stabilized?
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Substituting 1 Million Barrels per Day (50 Million Tonnes) • Natural Gas: 55 billion cubic meters (1.7% of world production; 56% of world annual growth) • Coal-to-Liquids: 200 million tonnes (2.6% of world production; 45% of world annual growth) • Electricity: 220 terawatt-hours (1% of world electricity generation; 34% of world annual growth) • Wind Electricity: 100 gigawatts (43% of world installed capacity; 286% of world annual growth) • Solar Electricity: 170 gigawatts (246% of world installed capacity; 586% of world annual growth; investment cost 800 billion dollars) • Biofuels: 270 million tonnes of corn (12% of world grain production; 245% of world annual growth)
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Global Warming Scenarios
Global Warming
Scenarios
1-2C 3-4C 5-6C
Drought and
Desertification
Frequent heat waves Widespread drought
and desertification
Much of the world
ceases to be
inhabitable
Sea Ice and Ice Sheets Disappearing of
Arctic sea ice
Melting of Greenland
ice sheets
Melting of Antarctic
ice sheets
Sea Level Rise Several meters 25 meters 75 meters
Eco-systems One third of species
become extinct
Amazon rainforest
burns down
Massive species
extinction
Human Impact Half a billion people
at risk of starvation
Billions become
environmental
refugees
Catastrophic decline
of global population
Climate Feedbacks Possible initiation of
soil and ocean carbon
feedbacks
Arctic permafrost and
ocean algae
endangered
Runaway global
warming
Sources: Spratt and Sutton (2008: 26-32); Hansen (2010: 140-171).
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Climate Stabilization Scenarios and Emission Budgets (Gt: billion tonnes)
Climate Stabilization Scenarios Scenario I Scenario II Scenario III
Atmospheric CO2 350 ppm 450 ppm 550 ppm
Atmospheric CO2-equivalent 450 ppm 550 ppm 700 ppm
Global Warming:a
IPCC Climate Sensitivity 2C 3C 4C
Hansen Climate Sensitivity 4C 6C 8C
Approximate 21st Century Emission Budgets:
Global Budgets:
Cumulative CO2 Emissions Budget 1,000 Gt 2,000 Gt 3,000 Gt
Less: early 21st century emissions 300 Gt 300 Gt 300 Gt
Remaining CO2 Emissions Budget 700 Gt 1,700 Gt 2,700 Gt
China’s Budgets
Cumulative CO2 Emissions Budget 210 Gt 420 Gt 630 Gt
Less: early 21st century emissions 70 Gt 70 Gt 70 Gt
Remaining CO2 Emissions Budget 140 Gt 350 Gt 560 Gt
a Long-term equilibrium temperature increase relative to the pre-industrial time.
Sources: IPCC (2007: 198-199, 227-229); Hansen (2010: 140-171).
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Society’s Total Product
Surplus Product
Population’s Basic Needs
Replacement of Means of Production Used Up