One new one, and two older ones I should have posted here a while ago.
The new one is with Seth Ackerman at Jacobin. Its starting point is a new article (co-authored with Arjun Jayadev and Enno Schroeder) I have coming out in Development and Change. But it’s also a continuation of the argument I made in my earlier Jacobin piece on the socialization of finance [*], and in my talk at this year’s Left Forum. (I still hope to get a transcript of that one at some point.)
The older two are both in response to my “What Recovery?” report for the Roosevelt Institute. This one, with David Beckworth at the Mercatus Institute, was a wide-ranging conversation that touched on a lot of topics beside the immediate question of whether we should regard the US economy as having reached full employment or potential output. This one, with Joe Weisenthal and his colleagues at “What Did You Miss” on Bloomberg, was much briefer but still managed to cover a lot of ground.
Supposedly there’s also an interview with me coming out in Der Standard, an Austrian newspaper, but I’m not sure when it will appear.
If you’re reading this blog, you’ll probably find these interviews interesting.
[*] Incidentally, my preferred title was that: The Socialization of Finance. I understand why the editors changed it to the catchier imperative form, but what I liked about my original was that it could refer both to something done to finance, and something done by finance.
About your article at Jacobin, I suspect that the concept of financialisation means different things to different people.
To me, it means an increase of financial or “fictitious” capital relative to the output of the system.
For example, suppose that there is an economy that produces various vegetables, carrots, corns, aplles, oranges etc..
However through the “law of supply and demand” the market will reach a certain proportion in the quantity of the vegetable produced, and a certain proportion in their prices, that reflect both the cost of production of the various vegetables and the tastes of the consumers, so that we can simplify and treat this production as a single composite commodity, and say that this economy produces 1000 units of stuff a year.
But in this economy there is also land, and land has a price that, while can be expressed in “stuff units”, cannot be derived by the same “law of supply and demand” because people don’t eat land.
So in the end we have a flow of consumption goods (or semiproduced consumption goods) that represents total income: 1000 stuff/year, and a stock of capital goods (in my example land) that have a price that can be expressed in stuff units, but are not really part of income, so that we have a capital/income ratio, that corresponds to a wealth/income ratio. I stress how in this example, even if from the point of view of the single participant “wealth” represents an accumulation of income, from the point of view of the system as a whole wealth and income are two completely different things (land and vegetables).
Since land doesn’t have a “natural price” in term of stuff, if the price of land goes up we have an higer wealth/income ratio, if it goes down we have a lower one.
From my point of view, “financialisation” mostly mean an increase in the wealth/income ratio.
However other people think of financialisation as the quantity of GDP that is eaten by finance, that is not the same thing and in my example would be an increase of the rent share of the landlords on the total income, not the increase in land prices.
The two things might be related but are not the same thing.
Finally in your article you take a more sociological approach to the concept of financialisation, but in my view you imply that financialisation is an increase in the share of surplus that enters into interest at the expense of profits, and only as a successive effect tends to lower wages because it sets a floor under gross profits.
This is another definition that is related to the other two I gave but again is not the same thing.
I think that you are not giving enough weight to the increase in the wealth/incomne ratio, and to how this might be necessary to a capitalist economy.
Also the various ideas about “fictitious capital” tend to conflate income and wealth, wich causes the vaguely skizophrenic approach to banking and money IMHO.
Professor Mason,
Thank you for your cogent defense of rent control as a stabilizing force in communities on KPCC today. I am a long-term renter who is facing steep and displacing rent increases. Your information and articulations of economic experiences were appreciated.
Best regards,
A. H. Pasadena
Thanks for listening.
The thing that really struck me was when the host said he’d never heard someone say that a person has the right to remain in their home even if they don’t own it. Really shows how narrow these discussions usually are.