Research output: Contribution to journal › Article › peer-review
Joseph Baines, Sandy Brian Hager
Original language | English |
---|---|
Pages (from-to) | 122-139 |
Number of pages | 18 |
Journal | New Political Economy |
Volume | 25 |
Issue number | 1 |
Early online date | 9 Jan 2019 |
DOIs | |
Accepted/In press | 10 Dec 2018 |
E-pub ahead of print | 9 Jan 2019 |
Published | 2 Jan 2020 |
Additional links |
Financial Crisis, Inequality, and_BAINES_Accepted10December2018Publishedonline9January2019_GREEN AAM
Financial_Crisis_Inequality_and_BAINES_Accepted10December2018Publishedonline9January2019_GREEN_AAM.pdf, 975 KB, application/pdf
Uploaded date:08 Jul 2019
Version:Accepted author manuscript
The relationship between inequality and financial instability has become a thriving topic of research in heterodox political economy. This article offers the first critical engagement with one framework within this wider literature: the Capital as Power (CasP) model of the stock market developed by Shimshon Bichler and Jonathan Nitzan. Specifically, we extend the CasP model to other advanced capitalist countries, including Germany, France, the United Kingdom, and Japan. Our findings affirm the core prediction of the CasP model, showing that unequal power relations reliably predict future stock market performance. Yet when it comes to the CasP model’s explanation of why power relations predict stock market returns, our findings are more ambiguous. We find little empirical support for the claims that capitalist power is dialectically intertwined with systemic fear, and that systemic fear and capitalised power are mediated through strategic sabotage. The main lesson of our analysis is that any model of the stock market must be attentive to the geographical unevenness and continued national diversity in capitalist development.
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