New York/Wall Street

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Founded in the 1970s in Paris, the Regulation School was a group of scholars who offered a novel conceptualization of economic history. Rejecting the notion of universal economic laws, they presented capitalism’s development as a series of phases, each defined by certain social and institutional forms, with an internal mechanism to regulate crises. 

In his 1990 book, ROBERT BOYER explains the methodological foundations underpinning the school’s heterodox approach. 

From the text:

“Departing from orthodox Marxism, adopting structuralist tools, and strongly influenced by the historical methods of the Annales school, the founding fathers of the regulation school showed how the dynamics of both business cycles and major crises depend upon forms of productive structures and social relations. On these foundations were developed the key concepts of regulation theory: institutional forms, the wage relation, regimes of accumulation, and modes of regulation—their combination defining a mode of development. If the crash of 1987 did not lead rapidly to the depression as after 1929 as many predicted, it is because America’s contemporary mode of development is not the same as during the interwar years. The sequence of events in the two crises has been completely different, as are the interconnections between the spheres of finance and accumulation. Likewise, the advanced capitalist countries have not followed identical strategies in their search for a new mode of development. Their particular social compromises, unequal degrees of acceptance of the new production methods, and sometimes opposed economic policy choices lie behind the distinctly unequal macroeconomic performances of the United States, Japan, and Europe. Finally, the causes and course of the crisis were present in outline within the previous mode of development. As time passed, its contractions and disequilibria could not longer be contained by the workings of the existing institutional forms and mode of regulation. Yesterday’s strengths have become today’s weaknesses and vice versa, although there is no general law at work in the matter. This, in a nutshell, is the point of regulation theory.” 

+  “The regulation approach is distinct from two mutually contradictory conceptions: first, the idea that rules and institutions are products of the convergence of private decisions; second, that any non-market force that has a global effect on the development of capitalist economies must proceed from the state.” From Michel Aglietta’s classic study, A Theory of Capitalist Regulation: The US Experience. Link

+  “The concepts of mode of regulation and regime of accumulation can be seen to function with respect to the Regulationists’ phases within capitalist history—called modes of development—rather analogously to the way Marxist concepts social relations of production and forces of production function with respect to the modes of production.” By Robert Brenner and Mark Glick. Link.

+  “A regulationist approach to the state would treat it like the commodity or wage relation: as an invariant which itself needs regulation.” By Jessop Bob. Link. And John Grahl on Aglietta’s monetary theory. Link


Credit and colonialism 

CATHERINE COMYN is a PhD candidate in international political economy at King’s College London. In a 2023 chapter, she explores the role of finance in the colonization of New Zealand.

From the text

“White credit networks and the debt relations they fostered in Māori communities were immensely damaging in their effects on whānau, hapū and iwi1 from the 1860s through to the 1900s. These relations fuelled a self-perpetuating system of colonization by binding Māori into networks of dependency on the colonizer that could be dissolved only through the alienation of land. Taken together, the Native Lands Acts of 1862 and 1865 were a key driver of this system of financial colonization. The Acts, whose effect upon Māori land tenure is often understood as one of ‘individualization’, must also be grasped as means of enacting a profound financializaton of Māori land, realized fundamentally through the transformation of land into a security against debts. For, what the land Acts implemented first and foremost—inseparable from and prefiguring the individualization of Māori land tenure—were particular debt relations. It was these relations, rather than the legislation directly, that crippled Māori economically, wresting the base from them piece by piece, repayment by repayment.”

+ + +

+  “The recent influx of private investment differs from prior state efforts to encourage private participation during the heyday of neoliberalism in the 1990s.” New on PW, Isadora Cruxên on evolving public-private relations in Brazilian water provision. Link.

+  Bruno Bonizzi, Jennifer Churchill, and Sahil Dutta on how to fix the UK pensions system. Link

+  Maureen Tkacik on “the great American hospital shell game.” Link

+  “I asked Norwegians to design their preferred tax rate structure and find that within the top 1 per cent, tax rates are far below (by as much as 23 percentage points) where citizens want them to be.” By Ruben Mathisen. Link.

+  Lee Harris reports on a new TSMC chip factory in Arizona, and what it shows us about supply chains, organized labor, knowledge-transfers, and IRA implementation. Link.

+  A report from the Lincoln Institute of Land Policy about “greening America’s smaller legacy cities.” Link

+  “In what ways might the digital renminbi (RMB), also known as e-CNY, bolster China’s efforts to internationalize its currency?” By Wei Ru Deng. Link

+  “Sharia-compliant products have been gaining popularity among British Muslims. Take the home-ownership scheme offered by HSBC’s sharia-compliant range, Amanah (amanah means ‘trust’ in the moral and legal sense). Muslims are forbidden to pay or receive interest and are troubled by conventional lending, because it appears to put the burden of risk on the borrower not the lender: in the Islamic view, no transaction is ethical unless risk is fairly distributed between the parties. HSBC Amanah’s scheme is based on an Islamic contract known as ‘diminishing musharaka’ and it’s approved, like all HSBC Amanah’s services, by a board of sharia scholars. A would-be home-owner must put up 40 per cent of the cost price (much less before the credit crunch); the property is registered in a trust (amanah) as a jointly owned asset, with the bank’s majority ownership diminishing over an agreed period, as regular payments are made; the customer promises to buy the bank’s share, and the bank promises to sell it to the client. The property is envisaged as a set of units and the customer’s payments as twofold: one part is rental, for the right to live in it, another is a form of unit-acquisition. The trust keeps a tally of the bank’s diminishing ownership and the growing share to the customer. At term, the trust is dissolved and the home passes to the customer. In the meantime, no interest has been charged.” By Jeremy Harding. Link

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