U.S. Neoliberal Macroeconomics Under Globalization Slides III IIPPE SCI

7/29/2019 U.S. Neoliberal Macroeconomics Under Globalization Slides III IIPPE SCI

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Sergio Cmara Izquierdo

[email protected]

www.sociedadyacumulacion-sergio.orgrea de Sociedad y Acumulacin Capitalista

Departamento de Economa

Universidad Autnoma Metropolitana-Azcapotzalco

U.S. neoliberal macrodynamics

under globalization

Joint conference AHE, IIPPE and FAPEPolitical Economy and the Outlook for Capitalism

University of Paris 1 Panthon-Sorbonne, France, July 5-8, 2012
mailto:[email protected]://www.sociedadyacumulacion-sergio.org/http://www.sociedadyacumulacion-sergio.org/http://www.sociedadyacumulacion-sergio.org/http://www.sociedadyacumulacion-sergio.org/mailto:[email protected]


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Structure of the presentation

1. The neoliberal globalization

1.1 The neoliberal restructuring

1.2 The global dimension of neoliberalism

2. Macroeconomics in the United States under globalization

2.1 External flows and relocation of commodity production

2.2 Corporations governance and accumulation3. United States macroeconomic imbalances and hegemony

3.1 Rising consumption and domestic disequilibria

3.2 Current account deficit and external disequilibria


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1.1 The neoliberal restructuring

Neoliberalism: Historical period between structural crises

Recomposition of the conditions of valorization of capital

A recovery of the rate of profit in the traditional valorization spaces

Anti-labor policies oriented to the devalorization of the labor force

A technical change favorable to capital until the 2000-2001 crisis

Diminished tax burden on capitalist profits

Opening of new economic and geographical spaces of productive valorization of

capital

Privatization of public companies

Destruction of noncapitalist forms of production related to the noncapitalists forms of ownership

Deregulation of the mobility of productive and commodity capital at the international level in the

benefit of transnational corporations

Reactivation of the spaces of nonproductive valorization of capital

Deregulation of national and international financial markets and liberalization of the mobility of

money-capital

Hegemony of the nonproductive forms of valorization versus the productive forms


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Configuration of the neoliberal world economy: 1) increased exploitation of labor, 2) neoliberal globalization,and 3) financialization: Inhibition of the productive accumulation

Enhanced global dimension of capitalism through the deregulation of the international movements of

productive, commodity and money capital

Radical transformation of the international economic relationships

New geographical opportunities of valorization of productive capital by means of liberalizing the international

movements of productive and commodity capital

New international division of labor and a new international productive specialization

Peripheral countries specialize in labor intensive industries; central countries specialize in high value added service

sectors, specially the financial services

Surge in the international flows of direct investment in the world trade flows: growing international disequilibria

Increase in the international money-capital flows and intensification of the international relationships of

economic dependence to the external financial flows: aggravation of the systemic instability

First stage: Strong dependence to the external capital flows in the peripheral countries: violent financial crisis in

Mexico, Asia, Russia, Argentina, Turkey, etc.

Second stage: Formidable accrual of foreign reserves by peripheral countries: imperialist financial expropriation


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-2.5%

-2.0%

-1.5%

-1.0%

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Accumulated current account surplus (15 countries) Accumulated current account deficit (15 countries)

Structural current account imbalances, 1980-2010

Source: Own calculations based on the World Economic Outlook from the International Monetary Fund. The accumulated current account surplus and deficit correspond to the aggregation of the current account

balance of the 15 countries with highest absolute surpluses and deficits, respectively, during 1985-2009.


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2. Macroeconomics in the U.S. under globalization


Direct investment abroad in relation to nonresidential gross fixed investment ofcorporations, United States, annual average, 1960q1-2011q4

Source: Own calculations from International Transactions Accounts and National Income and Product Accounts from the Bureau of Economic Analysis, and Flow of Funds from the Federal Reserve System.

-5%

0%

5%

10%

15%

20%

25%

30%

35%


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Current account flows in relation to GDP, United States, 1947q1-2011q4

Source: Own calculations from National Income and Product Accounts from the Bureau of Economic Analysis.

4%

6%

8%

10%

12%

14%

16%

18%

20%

22%

24%

Current account payments Current account receipts


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Production, consumption and trade balance of goods in relation to the GDP, UnitedStates, 1950-2011

Source: Own calculations from National Income and Product Accounts and Gross Domestic Product by Industryfrom the Bureau of Economic Analysis. The production and consumption of goods are represented in the left

axis and the trade balance of goods in the right axis.

-7%

-6%

-5%

-4%

-3%

-2%

-1%

0%

1%

2%

15%

19%

23%

27%

31%

35%

39%

43%

47%

51%

1950

1952

1954

1956

1958

1960

1962

1964

1966

1968

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

Production of goods Personal consumption expenditure of goods Trade balance of goods


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2.2 Corporate governance and accumulation

Net interest, dividends and retained earnings in the corporate sector,United States, 1946-2010

Source: Own calculations from National Income and Product Accounts from the Bureau of Economic Analysis, and Flow of Funds from the Federal Reserve System. The components of profits are represented as a

percentage (%) of profits net of taxes. The sum is 100%.

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Dividends Net interest Retained earnings


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Reinvested earnings United States, 1960q1-2011q4

Source: Own calculations from International Transactions Accounts and National Income and Product Accounts from the Bureau of Economic Analysis, and Flow of Funds from the Federal Reserve System. The rate of

reinvested earnings is defined as the ratio of net investment to profit net of taxes.

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

1960Q1

1961Q2

1962Q3

1963Q4

1965Q1

1966Q2

1967Q3

1968Q4

1970Q1

1971Q2

1972Q3

1973Q4

1975Q1

1976Q2

1977Q3

1978Q4

1980Q1

1981Q2

1982Q3

1983Q4

1985Q1

1986Q2

1987Q3

1988Q4

1990Q1

1991Q2

1992Q3

1993Q4

1995Q1

1996Q2

1997Q3

1998Q4

2000Q1

2001Q2

2002Q3

2003Q4

2005Q1

2006Q2

2007Q3

2008Q4

2010Q1

2011Q2

Direct investement abroad (annual average) Domestic corporate investment


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Net of taxes rate of profit and rate of accumulation in the corporate sector, UnitedStates, 1946-2010

Source: Own calculations from National Income and Product Accounts from the Bureau of Economic Analysis, and Flow of Funds from the Federal Reserve System. The rate of profit is defined as the ratio of profits net oftaxes to the stock of private nonresidential fixed capital. The rate of accumulation is defined as the ratio of nonresidential net investment to the stock of private nonresidential fixed capital.

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

1946

1948

1950

1952

1954

1956

1958

1960

1962

1964

1966

1968

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

Net of taxes rate of profit Rate of accumulation


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3. U.S. macroeconomic imbalances and hegemony


Components of domestic demand in relation to the GDP, United States, 1947q1-2011q4

Source: Own calculations from National Income and Product Accounts from the Bureau of Economic Analysis. Private consumption is plotted in the left axis, while investment and government expenditures are

plotted in the right axis.

5.0%

6.5%

8.0%

9.5%

11.0%

12.5%

14.0%

15.5%

17.0%

18.5%

20.0%

21.5%

23.0%

24.5%

63%

64%

65%

66%

67%

68%

69%

70%

71%

72%

73%

74%

75%

76%

1947Q1

1948Q3

1950Q1

1951Q3

1953Q1

1954Q3

1956Q1

1957Q3

1959Q1

1960Q3

1962Q1

1963Q3

1965Q1

1966Q3

1968Q1

1969Q3

1971Q1

1972Q3

1974Q1

1975Q3

1977Q1

1978Q3

1980Q1

1981Q3

1983Q1

1984Q3

1986Q1

1987Q3

1989Q1

1990Q3

1992Q1

1993Q3

1995Q1

1996Q3

1998Q1

1999Q3

2001Q1

2002Q3

2004Q1

2005Q3

2007Q1

2008Q3

2010Q1

2011Q3

Private consumption (including residential investment) Investment Goverment expenditures


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Households savings rate (% of GDP), United States, 1947-2011

Source: Own calculations from Flow of Funds from the Federal Reserve System. The savings rate is calculated as the personal disposable income less personal outlays and residential investment.

-5%

-4%

-3%

-2%

-1%

0%

1%

2%

3%

4%

5%

1947

1949

1951

1953

1955

1957

1959

1961

1963

1965

1967

1969

1971

1973

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

2011


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Net debts outstanding (% of GDP), United States, 1955-2011

Source: Own calculations from Flow of Funds from the Federal Reserve System.

-170%

-160%

-150%

-140%

-130%

-120%

-110%

-100%

-90%

0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

1955

1957

1959

1961

1963

1965

1967

1969

1971

1973

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

2011

Households Government Nonf inancial corporate sector Nonf inancial sectors Financial sector


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Balance of trade, goods and services (% of GDP), United States, 1929-2011

Source: Own calculations from National Income and Product Accounts from the Bureau of Economic Analysis.

-7%

-6%

-5%

-4%

-3%

-2%

-1%

0%

1%

2%

3%

4%

Balance of trade Balance of goods Balance of services


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International investment position of the United States, 1945-2010

Source: Own calculations from International Investment Position from the Bureau of Economic Analysis, and Flow of Funds from the Federal Reserve System. The net investment position is plotted in the right axis while

the rest of series are plotted in the left axis.

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

0%

20%

40%

60%

80%

100%

120%

140%

160%

1945

1947

1949

1951

1953

1955

1957

1959

1961

1963

1965

1967

1969

1971

1973

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

Foreign assets held by the U.S. (BEA) Foreign assets held by the U.S. (FRS)U.S. assets held by the rest of the world (BEA) U.S. assets held by the rest of the world (FRS)Net investment position (BEA) Net investment position (FRS)

U.S. Neoliberal Macroeconomics Under Globalization Slides III IIPPE SCI

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