Heterodox Economics Newsletter
These days I was called by a journalist of a leading German-speaking newspaper, who asked me whether the Corona crisis has led to an increase in economic inequality and social polarization. While I have not done any systematic analysis on this issue myself, I mentioned a series of casual observations – starting with the fact that low-pay jobs in the service sector have been hit comparatively hard, continuing with some preliminary evidence that education is a good predictor for how you do in a lock-downed economy and closing by pointing to soaring stock markets* – that lead to me believe in an increase in both, social polarization as well as economic inequality** due to Corona.
On a more general level, this call made me reflect on the question, whether heterodox economics provides us with suitable theoretical intuitions to analyze a case of non-linear social change as exemplified by the Corona crisis. In my humble view, heterodox theorizing first points us to the fact that the advent of Corona is exogenous to the business cycle, but endogenous to capitalism as its emergence is deeply tied to the commodification of nature that is a key feature of capitalism and a major concern for those, who acknowledge that economic activities are always embedded in social and ecological contexts.
More specifically, we can ask for immediate predictions from different schools of thought when being confronted by such a shock. A simple Post-Keynesian account, for instance, could emphasize the importance of distinguishing between stocks & flows in the context of a strong economic contraction. Such a stance would imply to expect that those economic entities (e.g. households or firms), which cannot draw on significant stocks and whose existence, hence, most strongly depends on the continuation of flows, will be hit comparatively hard. Such entities are much less resilient in case of a contraction of flows relative to those actors that can draw on some stock (e.g. net wealth, retained earnings). Hence, stocks & flows are essential for understanding how long lock-downs can be realistically upheld. Moreover, such a simple account can also give rise to policy-rationales („try to shift the burden on those with stocks to uphold lock-downs & minimize severe deprivation“) and provide some intuitions to fine-tune fiscal policies („how to best spent money when opportunities for private consumption are constrained?“). In conjunction with the statistical fact that the bottom half of the population typically has no noteworthy net wealth, such a perspective can also help to better grasp the magnitude of the underlying economic ramifications that come with severe lock-downs.
Also, other schools & traditions can provide helpful intuitions to better understand what’s going on in a lock-downed economy. In my view, an institutional approach focusing on sectoral differences and differences in legal status & industrial relations would do well in predicting heterogenous labor-market developments across countries and sectors. A feminist economic lens would surely point us ex-ante to the fact that stereotype-based division of labor will rather be strengthened than weakened in case lock-downs also extend to schools and child-care facilities. And finally, the evolutionary economic viewpoint would remind us that the disruption of existing routines or value-chains will cause some form of reorganization of economic processes. These reorganizations can remain largely unsuccessful and be detrimental for productivity, but can also lead to unexpected innovations and improvements induced by some novel constraints. And, indeed, personally, I would definitely agree that an increased regionalization of value-chains or a more encompassing use of online-tools to circumvent business traveling is something we could aspire to.
Don’t get me wrong: I have done no systematic studies of these issues, not even a systematic literature review and everything I say here can (and probably should) be contested in some way. Nonetheless, I have found in the past year that the theoretical intuitions I gathered through my engagement with heterodox economic ideas has equipped me well for anticipating & understanding what’s going on in the unchartered waters of the ‚new normal‘.
All the best
* Financial wealth is typically strongly concentrated on the top of the wealth distribution.
** In some countries the effect on post-tax income inequality might be remedied in the short-run by means of increased unemployment benefits or other forms of public effort.
© public domain
Table of contents
- Call for Papers
- Review of Evolutionary Political Economy: Special Issue on "Industrial Policies for Sustainable Development"
- 11th IIPPE Annual Conference on "The Pandemic and the Future of Capitalism: On the Political Economy of our Societies and Economies"
- 25th FMM Conference (Berlin, Oct. 2021)
- 2nd Call for Papers: 23rd Annual Conference of the Association for Heterodox Economics (online, July 2021)
- 69th Annual Conference of the Japan Society of Political Economy (JSPE)
- ASE@ ASSA 2022 (Boston, January 2022)
- Cambridge Journal of Economics: Special Issue on "Future of Work and Working Time"
- Conference on "Monetary innovations and reconfigurations: Which currencies for which economic policies in the context of crises?” (Paris, Oct. 2021)
- Extended Deadline: 33th Annual EAEPE Conference (online, Sept 2021)
- International Conference: Liberalism and/or socialism – tensions, exchanges and convergences from the 19th century to today (Nancy, Oct. 2021)
- Journal of Philosophical Economics: Symposium on "‘How economists are taught philosophy: pedagogical and self-referential reflections about the role of philosophy in an economist's work"
- Policy and Politics: Special Issue on "Transformational Change through Public Policy"
- URPE @ ASSA 2022: Call for Papers
- Call for Participants
- 10th PKES Summer School: Introduction to Post Keynesian Economics and Political Economy (June, online)
- AHE Webinar Series: Heterodox Economics Goes Global (April 2021, online)
- Intensive Virtual Course: "Gender-Sensitive Macroeconomic Modeling for Policy Analysis" (online, June-July 2021)
- Online Course: "Just and Green: Labour's Ecological Question" (April 2021, online)
- The 29th Annual Hyman P. Minsky Conference (online, May 2021)
- Webinar Series: Labor and a Jobs Guarantee
- Workshop on "Innovative Financing, Development and Ecological Transition" (online, May 2021)
- Conference Papers, Reports, and Podcasts
- International Rosa Luxemburg Conference: Videos online
- Job Postings
- Bennington College, US
- Erasmus University Rotterdam, Netherlands
- Gran Sasso Science Institute, Italy
- Karlshochschule International University, Germany
- Loughborough University, UK
- Max Weber Centre, Germany
- Research Department of the European Trade Union Institute, Belgium
- The Vienna Institute for International Economic Studies (wiiw), Austria
- University of Bayreuth, Germany
- University of Glasgow, Scottland
- University of Kassel, Germany (1/4)
- University of Kassel, Germany (2/4)
- University of Kassel, Germany (3/4)
- University of Kassel, Germany (4/4)
- University of Massachusetts Boston, US
- Call for Submissions: EAEPE Prizes 2021
- Call for Submissions: Stephen A. Resnick Graduate Student Essay Prize 2021
- Winner's Announcement: 2020 Warren Samuels Prize
- Winner's Announcement: AFIT-AFEE Student Paper Contest
- Journal of the History of Economic Thought 43 (1)
- American Journal of Economics and Sociology 80 (1)
- Brazilian Journal of Political Economy 4 (2)
- Competition and Change 25 (2)
- Ecological Economics 184
- Historical Materialism 29 (1)
- International Critical Thought 11 (1)
- International Journal of Community Currency Research 25 (1)
- Journal of Post Keynesian Economics 44 (1)
- New Political Economy 26 (2)
- Problemas del Desarrollo: Revista Latinoamericana de Economía 51 (203)
- Real-World Economics Review 95
- Review of International Political Economy 28 (2)
- Science & Society 85 (2)
- Books and Book Series
- Alternative Ideas from 10 (Almost) Forgotten Economists
- An Introduction to Macroeconomics
- Capitalism, Power and Innovation: Intellectual Monopoly Capitalism Uncovered
- Conflict, Demand and Economic Development: Essays in Honour of Amit Bhaduri
- Economic Philosophy
- Emerging Economies and the global financial system
- Populism and Neoliberalism
- Power and Influence of Economists: Contributions to the Social Studies of Economics
- Rudolf Hilferding: What Do We Still Have to Learn from His Legacy?
- Russian Economic Development over Three Centuries: New Data and Inference
- Schumpeter's Venture Money
- Social Media: A Critical Introduction - third edition
- The Dispossessed: Karl Marx’s Debates on Wood Theft and the Right of the Poor
- The Gypsy Economist: The Life and Times of Colin Clark
- Transnational Migration and the New Subjects of Work: Transmigrants, Hybrids and Cosmopolitans
- Heterodox Graduate Programs, Scholarships and Grants
- International Economics Master (Berlin School of Economics and Law, Germany)
- International Master's Course: Economic Policies in the age of Globalisation 2.0
- Levy Graduate Programs in Economic Theory and Policy: Students Application for Fall 2021
- Political Economy of European Integration Master (Berlin School of Economics and Law, Germany)
- URPE Dissertation Fellowship
- Calls for Support
- Exploring Economics is building up a new platform for teachers
- For Your Information
- ASE Announcement: A Message from ASE about the Recent Assault on Asian Americans in the Atlanta, Georgia Area
- Announcement: Virtual Events of the Federal Reserve System on "Racism and the Economy"
- EPOG+ Erasmus Mundus Joint Master Degree - MOOC on "Rethinking the economy after the coronavirus"
- EPOG+ Erasmus Mundus Joint Master Degree: MOOC Series on "Rethinking the economy after the coronavirus"
- New Journal: Work in the Global Economy