Bretton Woods and corporate defaults

In the Eatwell and Taylor book, Global Finance at Risk, they had, I think, a graph with the percentage of corporate bonds in default in the US (I don't have the book here, it's my office). I think this is a close one, with data that is more recent (from this Moody's report).

The graph shows corporate bond default rates (and also the speculative-grade bond defaults). Note that defaults fall significantly during the Bretton Woods era of capital controls and low interest rates.

Three Globalizations, Not Two: Rethinking the History and Economics of Trade and Globalization

 By Thomas Palley (Guest blogger)

The conventional wisdom is there have been two globalizations in the modern era. The first began around 1870 and ended in 1914. The second began in 1945 and is still underway. This paper challenges that view and argues there have been three globalizations, not two. The first half of the paper provides empirical evidence for the three globalizations hypothesis. The second half discusses its analytical implications. The Victorian first globalization and Keynesian era second globalization were driven by gains from trade, and those gains increased industrialized country real wages. The neoliberal third globalization has been driven by industrial reorganization motivated by distributional conflict. Trade theory does not explain the third globalization; capital’s share has increased at the expense of labor’s; and there can be no presumption of mutually beneficial country gains from the third globalization.

Read rest here.

Brothers on the line

Documentary on the Reuther brothers and the role of unions in the prosperity of the Golden Age of Capitalism. Worth watching.

Radical and Heterodox Economics

Radical economics, the term as much as the theories behind it, is fundamentally a phenomenon of the 1960s and the academia in the United States, intrinsically tied to the upheavals of that transformative decade, in particular the Civil Rights movement and the war in Vietnam. The Union for Radical Political Economics (URPE) was the result of that boom in interest for alternative approaches to the mainstream. I don’t intend to write a history of URPE, in this brief post, but I want to contrast Radical Economics with the term Heterodox Economics, which has gained traction more recently (see Ngram viewer figure).

Read rest here.

PS: I started blogging at the URPE blog too. Check it out here.

On why the Golden Age of Capitalism was better than this revived Gilded Age

No need for a lot of discussion. The Golden Age of Capitalism (in the graph 1947-79)--the world that resulted from the reforms to deal with the Great Depression (the New Deal) and the reorganization of the world after the victory against Fascism, with strong unions, high taxes for the rich, and a string of social programs for the poor and minorities--was a better world.