Michael Harrington - Academia.edu (original) (raw)

Books by Michael Harrington

The development of social policy and growth of related social spending has been universal among a... more The development of social policy and growth of related social spending has been universal among advanced industrial democracies in the 20th century. Contributory social insurance programs comprise the lion’s share of these social expenditures. Yet, despite similar levels of development and governing institutions, social insurance spending continues to vary considerably across developed countries. Most explanations of these differences focus on the supply or provision of social policies due to various instrumental political variables, such as the political strength of working class parties and labor unions. However, functional explanations derived from economic characteristics can also be sought in the demand for social policies. This study emphasizes the role of trade dependence as a primary determinant of the demand for national unemployment insurance. The more trade-dependent is a country’s economy, the more generous are national unemployment insurance policies.
I test this explanation through two comparative methods. First, I employ a cross-national statistical regression model using national aggregates from the postwar period for 21 OECD countries. The regression results confirm a statistically significant and robust correlation between trade dependence, as measured by total trade as a share of GDP, and the generosity of unemployment insurance systems. This model controls for the level of development through per capita GDP. Second, to test the causal argument, I conduct four historical case studies of the development of national unemployment insurance in Great Britain, Belgium, Switzerland and the United States. These case analyses focus on the expressed interests of sub-national actors such as producers, workers, unions, political parties, and bureaucrats, that determined the shape and design of national unemployment insurance systems. The findings show that the strong correlation found between trade dependence and unemployment insurance generosity can be best explained by the politically dominant interests of the international trading sector. Countries with high trade dependence reached national compromises that secured trade openness by insuring workers’ income security with more generous social insurance compensation. These compromises reveal coalitions based on trade rather than class interests. Taken in total, the findings suggest that the modern welfare state would be more accurately described and analyzed as the modern insurance state.

The world is changing. Fast. Revolutions in information, communication, economic liberalization, ... more The world is changing. Fast. Revolutions in information, communication, economic liberalization, and political integration are bombarding us at a dizzying pace. Individually and collectively, we try to manage this change, seeking to adapt and thrive. One way we organize our collective action is through the exercise of public policy, but the landscape is constantly changing and the old maps and blueprints seem inadequate to the task.

If our leadership elites understand how to manage these changes, it is not apparent from the results. Regrettably, our traditional media sources seem unable or unwilling to help by providing straight answers untainted by ideology and political partisanship. The stock market jumps higher one day, and crashes the next, but what exactly has changed between yesterday and today? Or tomorrow? Meanwhile, Main Street enterprises and average families struggle to survive, much less thrive. In a self-governing democracy, how do we navigate this growing chaos? How do we return to a world we recognize?

To start, we need to establish some touchstones to anchor our rational perceptions. Today, these touchstones must come from our own understanding. We need a basic intellectual foundation to guide our collective decisions because managing democracy is no longer the exclusive domain of the expert.
Common Cent$: A Citizen’s Survival Guide hopes to satisfy that need. The guide is a basic primer that focuses on economics for non-economists and policymakers. Its author holds advanced degrees in economics, finance, and political science and has taught these disciplines at the university level. He has also worked in an investment management and consulting capacity. In contrast to conventional approaches, this guide offers a new way of understanding our society that departs from the economy as a mechanical system or programmable machine amenable to simple policy directives. Rather, the adopted metaphor is organic, holistic, and integrative. The analysis focuses on resource inputs and outputs in a natural cycle over time. Rational, interactive human behavior becomes a key driver of this economic-financial-political ecosystem.

In developing this approach, we can then tackle the nuts and bolts of the conventional policy world encompassing Federal Reserve monetary policy, the banking system, government fiscal policy, tax policy, public finance and social insurance entitlements. With a clearer perception as to how these various policies shape our world, we gain a greater understanding of the ways we have been affected personally through the gyrations of the financial, housing, and labor markets. In this respect, we may discover that intuition is more powerful than technical expertise.

This guide is not a compendium of solutions, but a framework for analysis so that citizens may design solutions together. Our financial and economic predicaments are not accidents of circumstance; we are not victims of fate. Our problems are of our own design due to misguided policies and faulty intellectual models of our world. The road back to sanity starts with small steps.

A trilogy based on a true story of the Italian Renaissance. This version bundles the three books ... more A trilogy based on a true story of the Italian Renaissance. This version bundles the three books - Inferno, Purgatorio, and Paradiso - together as one.

Renaissance Florence celebrated its Golden Age during the late 15th century under Lorenzo de’ Medici, the Magnificent. This was the age of artists, philosophers and poets like Leonardo, Michelangelo, Botticelli, Pico della Mirandola, Poliziano, and Machiavelli.

But a societal crisis was imminent by the century’s last decade. The Italian peninsula was surrounded and threatened by imperialist powers, trade declined and poverty increased in the face of obscene wealth. Avaricious popes made a family business of the Church while floods, droughts, famines, and the plague all combined to create an atmosphere of overwhelming fear and anxiety.

As chaos loomed, an obscure Dominican friar arose to restore order. Fra Girolamo Savonarola was a charismatic preacher and prophet who advocated religious and political reform. His mission was to transform his corrupt and decaying society into St. Augustine’s mythical City of God. At the height of his short reign he orchestrated the infamous Bonfire of the Vanities, riding a wave of popular discontent to become the most influential religious, political, and cultural figure of the age. The Savonarolan theocratic republic left its indelible mark on the face of Florence, Italy, and Western history.

The City of Man is the dramatic story of this preacher’s fantastic rise and tragic fall, symbolizing a critical juncture in the conflict between Church and State in the Christian world. More dramatized history than historical fiction, the story integrates the art, religion, and politics of this glorious period.

Young Niccolo Machiavelli provides the counterpoint to Savonarola as he develops his new political philosophy. Their momentous clash illuminates the transition from the Age of Faith to the Age of Reason, heralding the birth of our modern age.

Formatted for the Kindle, the digital version of The City of Man incorporates special features to explore the world of Renaissance Florence, including maps, family trees, art images, dozens of internal and external hyperlinks to biographies and historical events on Wikipedia, an extensive glossary and selected scene index.

Reader’s Reviews:

“…a powerful story, wonderfully written, and very relevant to our conflicted times. The quality of writing, the intensity of scholarly research, the recreation of historical events, is truly superb.”

“I enjoyed The City of Man tremendously. The characters were very engaging, and had depth to them, especially Niccolò Machiavelli. The vivid descriptions of Florence sent me right back in time. It’s a tremendous book, the style and language is beautiful.”

“Awesome. Quite impressive…”

"This book is for the history buff, for those into politics, religion and human nature...The Kindle edition that I read was amazing, with appendices that contain maps, family trees and cast of characters, something that definitely lessens the difficulty factor. There is also a glossary containing political classes/factions, artist & works, and Italian/Latin words and expressions. This book can certainly be called an epic, and if you have the patience to read it you will certainly enjoy it and learn much from it. ...Michael Harrington may be able to consider this his masterpiece."

Saving Mona Lisa is an intrigue of art, love, and Renaissance genius. The story is inspired by th... more Saving Mona Lisa is an intrigue of art, love, and Renaissance genius. The story is inspired by the nine versions of Leonardo da Vinci’s iconic Mona Lisa depicted on the book cover—the original, plus eight copies of dubious provenance. The mystery over who painted these copies still confounds art historians, as does the fact that Leonardo refused to finish the original or deliver it to its rightful owner, right up until his death more than fifteen years later.

In 2012, conservators at the Prado Museum in Madrid determined that their copy was painted at the same time as the original, but Leonardo did not paint it.

In 2009, another “nude Mona Lisa” surfaced in France, further fueling the titillating question over who painted the nude versions.

Five centuries after his death, Leonardo da Vinci, the most renowned personality, artist, inventor, and temperamental genius in history, continues to reveal his many mysteries…

Based closely on scholarly research, historical evidence and credible speculation, Saving Mona Lisa weaves an intriguing mystery as Leonardo clashes with his two young apprentices over the ultimate fate of a painting that had achieved world renown soon after everyone thought it was finished...everyone, that is, except Leonardo.

“Art is never finished, only abandoned.”
-Leonardo da Vinci

***The Kindle version of Saving Mona Lisa is programmed for easy reader navigation and includes short bios of the principal characters, maps, historical Afterword, Italian glossary, and over 30 illustrations and photographs of Leonardo’s most important works.

A chronicle of our times based on real events, In God We Trust is a story of political intrigue, ... more A chronicle of our times based on real events, In God We Trust is a story of political intrigue, religious conspiracies, and the corruption of money. It’s the story of Dante Jefferson Washington, a young, black, religious conservative and Deputy Chief of Staff to South Carolina Senator Winston J. Sinclair. Dante’s ambitions for public service soon become entangled in the unholy alliance of money, politics, and religion that define our national political dysfunction. His journey echoes that of his Italian namesake in The Divine Comedy.

A social and political contradiction because of his race and political ideals, Dante pursues his Beatrice in a former college classmate, a beautiful immigrant medical student caught between her British Christian and Pakistani Muslim heritage. Their lives and those of their two closest friends are torn apart by the disaster of 9/11 and the war that follows.

The author is a prize-winning political scientist and economist. The political narrative is informed by recent research into national partisan polarization that challenges and dispels some of the false popular ideological stereotypes promoted by both party extremes.

Papers by Michael Harrington

It has now been two years since French economist Thomas Piketty published his tome, Capital in th... more It has now been two years since French economist Thomas Piketty published his tome, Capital in the Twenty-First Century, and one year since it was published in English, raising a fanfare of praise and criticism. It has deserved both, most notably for “putting the distributional question back at the heart of economic analysis.” I would imagine Professor Piketty is also pleased by the attention his work has garnered: What economist doesn’t secretly desire to be labeled a “rock-star” without having to sing or pick up a guitar to demonstrate otherwise?

Many critics have focused on methodology and the occasional data error, but I will dispense with that by accepting the general contour of history Piketty presents as accurate of real trends in economic inequality over time. And that it matters. The meatier controversy is found in Piketty’s interpretations of the data and his inductive theorizing because that tells us what we can and should do, if anything, about it. Sufficient time has passed for us to digest the criticisms and perhaps offer new insights.

The development of social policy and growth of related social spending has been universal among a... more The development of social policy and growth of related social spending has been universal among advanced industrial democracies in the 20th century. Contributory social insurance programs comprise the lion’s share of these social expenditures. Yet, despite similar levels of development and governing institutions, social insurance spending continues to vary considerably across developed countries. Most explanations of these differences focus on the supply or provision of social policies due to various instrumental political variables, such as the political strength of working class parties and labor unions. However, functional explanations derived from economic characteristics can also be sought in the demand for social policies. This study emphasizes the role of trade dependence as a primary determinant of the demand for national unemployment insurance. The more trade-dependent is a country’s economy, the more generous are national unemployment insurance policies.

I test this explanation through two comparative methods. First, I employ a cross-national statistical regression model using national aggregates from the postwar period for 21 OECD countries. The regression results confirm a statistically significant and robust correlation between trade dependence, as measured by total trade as a share of GDP, and the generosity of unemployment insurance systems. This model controls for the level of development through per capita GDP. Second, to test the causal argument, I conduct four historical case studies of the development of national unemployment insurance in Great Britain, Belgium, Switzerland and the United States. These case analyses focus on the expressed interests of sub-national actors such as producers, workers, unions, political parties, and bureaucrats, that determined the shape and design of national unemployment insurance systems. The findings show that the strong correlation found between trade dependence and unemployment insurance generosity can be best explained by the politically dominant interests of the international trading sector. Countries with high trade dependence reached national compromises that secured trade openness by insuring workers’ income security with more generous social insurance compensation. These compromises reveal coalitions based on trade rather than class interests. Taken in total, the findings suggest that the modern welfare state would be more accurately described and analyzed as the modern insurance state.

One of the central presumptions in general equilibrium models widely used in neoclassical macr... more One of the central presumptions in general equilibrium models widely used in neoclassical macroeconomics today is that people are pretty much alike, or homogeneous in their preferences. A second presumption, one of mathematical convenience, is that people’s preferences are fairly fixed over time and do not vary or adapt readily to different circumstances. There is a vast class of models that are consistent with these presumptions but such models have difficulty in explaining persistent skewed distributional outcomes such as income and wealth inequalities within groups and across societies. Because of these limiting presumptions, the proffered explanations for such maldistributions necessarily refer back to differences in resource endowments.

The Casino Model presented in this paper uses agent-based simulation modeling as an attempt to overcome these limitations. We use the SWARM programming environment to model agents with heterogeneous risk preferences in an environment of uncertainty and allow them to adapt their gaming strategies to maximize survival by preserving their wealth stakes. In this way SWARM allows us to endogenize heterogeneity and adaptability with regard to agent behavior. The results show that players with initially high risk preferences who are lucky can adapt their gambling strategies to increase their relative wealth. This model provides a rudimentary foundation for demonstrating that natural behavioral preferences and luck can form the basis of inequality. We support the presumptions of the model with a discussion of experimental research in economic behavior, decision-making behavior and evolutionary psychology.

In this paper I evaluate the likelihood for conflict or cooperation among member states of the Eu... more In this paper I evaluate the likelihood for conflict or cooperation among member states of the European Community by applying and comparing the theoretical arguments of institutionalism and the new economics of organization (NEO) against those of Realism. I present first the theoretical foundations of the debate and then apply these to the specific policy proposals embodied in the Single European Act.

I also consider the prospects for European cooperation or conflict within the context of the historical development of the EU over time as well within the constraints of the international political economy.

With this analysis I conclude that the prospects for European cooperation are enhanced by measured institutional development, the evolutionary progression of integration and the gravitational pull of economic interdependence. Economic interdepedence increases the
incentives to private actors for cross-border cooperation and EC institutions can serve to empower national governments to manage and resolve conflicting domestic interests in favor of long-term strategic interests.

Several factors are potentially problematic to EU cooperation. First, the large and potentially increasing number of members may increase procedural grid-lock with a frustratingly slow pace or inability for decision-making. Second, EU supranational institutions need to adhere
to the principle of democratic accountability to insure widespread acceptance of their legitimacy.

Finally, international politics and economics may pose potential threats to the process. The disintegration of the Soviet empire and Yugoslavia and a possible European or world-wide recession pose considerable obstacles to the EU.

In sum, these pluses and minuses for EU cooperation should primarily affect the pace of integration but not the overall long-term direction. As evidenced by the controversy over the Maastricht Treaty, this pace should be expected to be slow and uneven.

Industrial organization and corporate governance varies considerably across developed countries. ... more Industrial organization and corporate governance varies considerably across developed countries. The most measured comparisons are between the U.S., Germany,
and Japan. One of the more notable differences in forms of corporate governance relate to the role of financial institutions. In Germany and Japan, large and powerful financial institutions play an active role in monitoring corporate decisions.

These institutions, predominantly commercial or universal banks, accomplish this through seats on the Board of Directors as representatives of both creditor and shareholder interests. In the U.S. financial institutions are fragmented by legislation and regulation. Commercial and
investment banks, trust companies, mutual funds, and pension funds are all severely constrained in their ability to monitor firm behavior.

The general proposition of this paper is that the laws and regulations that have shaped American finance are rooted in the political process. More simply, politics has, to
a significant extent and a variety of ways, shaped finance. A political theory of American finance has been advanced by Roe (1991) where he identifies legislation and regulations
that have directly affected the activities of U.S. financial institutions.

One of the most significant pieces of legislation, the Banking Act of 1933, or Glass-Steagall, is the case study analyzed in this paper. My intention is to show how politics has helped to shape finance through a legislative history of Glass-Steagall. The political process can be seen as a function of group interests played out through the political structure. This paper identifies and evaluates these group interests in shaping the different parts of the bill and also shows how unfolding historical events affected the final outcome of the legislation.

By this analysis this study hopes to provide one link in the chain of a more comprehensive political theory of American finance with its implications for comparative corporate governance, industrial organization and economic performance.

The development of social policy and growth of related social spending has been universal among a... more The development of social policy and growth of related social spending has been universal among advanced industrial democracies in the 20th century. Contributory social insurance programs comprise the lion’s share of these social expenditures. Yet, despite similar levels of development and governing institutions, social insurance spending continues to vary considerably across developed countries. Most explanations of these differences focus on the supply or provision of social policies due to various instrumental political variables, such as the political strength of working class parties and labor unions. However, functional explanations derived from economic characteristics can also be sought in the demand for social policies. This study emphasizes the role of trade dependence as a primary determinant of the demand for national unemployment insurance. The more trade-dependent is a country’s economy, the more generous are national unemployment insurance policies.
I test this explanation through two comparative methods. First, I employ a cross-national statistical regression model using national aggregates from the postwar period for 21 OECD countries. The regression results confirm a statistically significant and robust correlation between trade dependence, as measured by total trade as a share of GDP, and the generosity of unemployment insurance systems. This model controls for the level of development through per capita GDP. Second, to test the causal argument, I conduct four historical case studies of the development of national unemployment insurance in Great Britain, Belgium, Switzerland and the United States. These case analyses focus on the expressed interests of sub-national actors such as producers, workers, unions, political parties, and bureaucrats, that determined the shape and design of national unemployment insurance systems. The findings show that the strong correlation found between trade dependence and unemployment insurance generosity can be best explained by the politically dominant interests of the international trading sector. Countries with high trade dependence reached national compromises that secured trade openness by insuring workers’ income security with more generous social insurance compensation. These compromises reveal coalitions based on trade rather than class interests. Taken in total, the findings suggest that the modern welfare state would be more accurately described and analyzed as the modern insurance state.

The world is changing. Fast. Revolutions in information, communication, economic liberalization, ... more The world is changing. Fast. Revolutions in information, communication, economic liberalization, and political integration are bombarding us at a dizzying pace. Individually and collectively, we try to manage this change, seeking to adapt and thrive. One way we organize our collective action is through the exercise of public policy, but the landscape is constantly changing and the old maps and blueprints seem inadequate to the task.

If our leadership elites understand how to manage these changes, it is not apparent from the results. Regrettably, our traditional media sources seem unable or unwilling to help by providing straight answers untainted by ideology and political partisanship. The stock market jumps higher one day, and crashes the next, but what exactly has changed between yesterday and today? Or tomorrow? Meanwhile, Main Street enterprises and average families struggle to survive, much less thrive. In a self-governing democracy, how do we navigate this growing chaos? How do we return to a world we recognize?

To start, we need to establish some touchstones to anchor our rational perceptions. Today, these touchstones must come from our own understanding. We need a basic intellectual foundation to guide our collective decisions because managing democracy is no longer the exclusive domain of the expert.
Common Cent$: A Citizen’s Survival Guide hopes to satisfy that need. The guide is a basic primer that focuses on economics for non-economists and policymakers. Its author holds advanced degrees in economics, finance, and political science and has taught these disciplines at the university level. He has also worked in an investment management and consulting capacity. In contrast to conventional approaches, this guide offers a new way of understanding our society that departs from the economy as a mechanical system or programmable machine amenable to simple policy directives. Rather, the adopted metaphor is organic, holistic, and integrative. The analysis focuses on resource inputs and outputs in a natural cycle over time. Rational, interactive human behavior becomes a key driver of this economic-financial-political ecosystem.

In developing this approach, we can then tackle the nuts and bolts of the conventional policy world encompassing Federal Reserve monetary policy, the banking system, government fiscal policy, tax policy, public finance and social insurance entitlements. With a clearer perception as to how these various policies shape our world, we gain a greater understanding of the ways we have been affected personally through the gyrations of the financial, housing, and labor markets. In this respect, we may discover that intuition is more powerful than technical expertise.

This guide is not a compendium of solutions, but a framework for analysis so that citizens may design solutions together. Our financial and economic predicaments are not accidents of circumstance; we are not victims of fate. Our problems are of our own design due to misguided policies and faulty intellectual models of our world. The road back to sanity starts with small steps.

A trilogy based on a true story of the Italian Renaissance. This version bundles the three books ... more A trilogy based on a true story of the Italian Renaissance. This version bundles the three books - Inferno, Purgatorio, and Paradiso - together as one.

Renaissance Florence celebrated its Golden Age during the late 15th century under Lorenzo de’ Medici, the Magnificent. This was the age of artists, philosophers and poets like Leonardo, Michelangelo, Botticelli, Pico della Mirandola, Poliziano, and Machiavelli.

But a societal crisis was imminent by the century’s last decade. The Italian peninsula was surrounded and threatened by imperialist powers, trade declined and poverty increased in the face of obscene wealth. Avaricious popes made a family business of the Church while floods, droughts, famines, and the plague all combined to create an atmosphere of overwhelming fear and anxiety.

As chaos loomed, an obscure Dominican friar arose to restore order. Fra Girolamo Savonarola was a charismatic preacher and prophet who advocated religious and political reform. His mission was to transform his corrupt and decaying society into St. Augustine’s mythical City of God. At the height of his short reign he orchestrated the infamous Bonfire of the Vanities, riding a wave of popular discontent to become the most influential religious, political, and cultural figure of the age. The Savonarolan theocratic republic left its indelible mark on the face of Florence, Italy, and Western history.

The City of Man is the dramatic story of this preacher’s fantastic rise and tragic fall, symbolizing a critical juncture in the conflict between Church and State in the Christian world. More dramatized history than historical fiction, the story integrates the art, religion, and politics of this glorious period.

Young Niccolo Machiavelli provides the counterpoint to Savonarola as he develops his new political philosophy. Their momentous clash illuminates the transition from the Age of Faith to the Age of Reason, heralding the birth of our modern age.

Formatted for the Kindle, the digital version of The City of Man incorporates special features to explore the world of Renaissance Florence, including maps, family trees, art images, dozens of internal and external hyperlinks to biographies and historical events on Wikipedia, an extensive glossary and selected scene index.

Reader’s Reviews:

“…a powerful story, wonderfully written, and very relevant to our conflicted times. The quality of writing, the intensity of scholarly research, the recreation of historical events, is truly superb.”

“I enjoyed The City of Man tremendously. The characters were very engaging, and had depth to them, especially Niccolò Machiavelli. The vivid descriptions of Florence sent me right back in time. It’s a tremendous book, the style and language is beautiful.”

“Awesome. Quite impressive…”

"This book is for the history buff, for those into politics, religion and human nature...The Kindle edition that I read was amazing, with appendices that contain maps, family trees and cast of characters, something that definitely lessens the difficulty factor. There is also a glossary containing political classes/factions, artist & works, and Italian/Latin words and expressions. This book can certainly be called an epic, and if you have the patience to read it you will certainly enjoy it and learn much from it. ...Michael Harrington may be able to consider this his masterpiece."

Saving Mona Lisa is an intrigue of art, love, and Renaissance genius. The story is inspired by th... more Saving Mona Lisa is an intrigue of art, love, and Renaissance genius. The story is inspired by the nine versions of Leonardo da Vinci’s iconic Mona Lisa depicted on the book cover—the original, plus eight copies of dubious provenance. The mystery over who painted these copies still confounds art historians, as does the fact that Leonardo refused to finish the original or deliver it to its rightful owner, right up until his death more than fifteen years later.

In 2012, conservators at the Prado Museum in Madrid determined that their copy was painted at the same time as the original, but Leonardo did not paint it.

In 2009, another “nude Mona Lisa” surfaced in France, further fueling the titillating question over who painted the nude versions.

Five centuries after his death, Leonardo da Vinci, the most renowned personality, artist, inventor, and temperamental genius in history, continues to reveal his many mysteries…

Based closely on scholarly research, historical evidence and credible speculation, Saving Mona Lisa weaves an intriguing mystery as Leonardo clashes with his two young apprentices over the ultimate fate of a painting that had achieved world renown soon after everyone thought it was finished...everyone, that is, except Leonardo.

“Art is never finished, only abandoned.”
-Leonardo da Vinci

***The Kindle version of Saving Mona Lisa is programmed for easy reader navigation and includes short bios of the principal characters, maps, historical Afterword, Italian glossary, and over 30 illustrations and photographs of Leonardo’s most important works.

A chronicle of our times based on real events, In God We Trust is a story of political intrigue, ... more A chronicle of our times based on real events, In God We Trust is a story of political intrigue, religious conspiracies, and the corruption of money. It’s the story of Dante Jefferson Washington, a young, black, religious conservative and Deputy Chief of Staff to South Carolina Senator Winston J. Sinclair. Dante’s ambitions for public service soon become entangled in the unholy alliance of money, politics, and religion that define our national political dysfunction. His journey echoes that of his Italian namesake in The Divine Comedy.

A social and political contradiction because of his race and political ideals, Dante pursues his Beatrice in a former college classmate, a beautiful immigrant medical student caught between her British Christian and Pakistani Muslim heritage. Their lives and those of their two closest friends are torn apart by the disaster of 9/11 and the war that follows.

The author is a prize-winning political scientist and economist. The political narrative is informed by recent research into national partisan polarization that challenges and dispels some of the false popular ideological stereotypes promoted by both party extremes.

It has now been two years since French economist Thomas Piketty published his tome, Capital in th... more It has now been two years since French economist Thomas Piketty published his tome, Capital in the Twenty-First Century, and one year since it was published in English, raising a fanfare of praise and criticism. It has deserved both, most notably for “putting the distributional question back at the heart of economic analysis.” I would imagine Professor Piketty is also pleased by the attention his work has garnered: What economist doesn’t secretly desire to be labeled a “rock-star” without having to sing or pick up a guitar to demonstrate otherwise?

Many critics have focused on methodology and the occasional data error, but I will dispense with that by accepting the general contour of history Piketty presents as accurate of real trends in economic inequality over time. And that it matters. The meatier controversy is found in Piketty’s interpretations of the data and his inductive theorizing because that tells us what we can and should do, if anything, about it. Sufficient time has passed for us to digest the criticisms and perhaps offer new insights.

The development of social policy and growth of related social spending has been universal among a... more The development of social policy and growth of related social spending has been universal among advanced industrial democracies in the 20th century. Contributory social insurance programs comprise the lion’s share of these social expenditures. Yet, despite similar levels of development and governing institutions, social insurance spending continues to vary considerably across developed countries. Most explanations of these differences focus on the supply or provision of social policies due to various instrumental political variables, such as the political strength of working class parties and labor unions. However, functional explanations derived from economic characteristics can also be sought in the demand for social policies. This study emphasizes the role of trade dependence as a primary determinant of the demand for national unemployment insurance. The more trade-dependent is a country’s economy, the more generous are national unemployment insurance policies.

I test this explanation through two comparative methods. First, I employ a cross-national statistical regression model using national aggregates from the postwar period for 21 OECD countries. The regression results confirm a statistically significant and robust correlation between trade dependence, as measured by total trade as a share of GDP, and the generosity of unemployment insurance systems. This model controls for the level of development through per capita GDP. Second, to test the causal argument, I conduct four historical case studies of the development of national unemployment insurance in Great Britain, Belgium, Switzerland and the United States. These case analyses focus on the expressed interests of sub-national actors such as producers, workers, unions, political parties, and bureaucrats, that determined the shape and design of national unemployment insurance systems. The findings show that the strong correlation found between trade dependence and unemployment insurance generosity can be best explained by the politically dominant interests of the international trading sector. Countries with high trade dependence reached national compromises that secured trade openness by insuring workers’ income security with more generous social insurance compensation. These compromises reveal coalitions based on trade rather than class interests. Taken in total, the findings suggest that the modern welfare state would be more accurately described and analyzed as the modern insurance state.

One of the central presumptions in general equilibrium models widely used in neoclassical macr... more One of the central presumptions in general equilibrium models widely used in neoclassical macroeconomics today is that people are pretty much alike, or homogeneous in their preferences. A second presumption, one of mathematical convenience, is that people’s preferences are fairly fixed over time and do not vary or adapt readily to different circumstances. There is a vast class of models that are consistent with these presumptions but such models have difficulty in explaining persistent skewed distributional outcomes such as income and wealth inequalities within groups and across societies. Because of these limiting presumptions, the proffered explanations for such maldistributions necessarily refer back to differences in resource endowments.

The Casino Model presented in this paper uses agent-based simulation modeling as an attempt to overcome these limitations. We use the SWARM programming environment to model agents with heterogeneous risk preferences in an environment of uncertainty and allow them to adapt their gaming strategies to maximize survival by preserving their wealth stakes. In this way SWARM allows us to endogenize heterogeneity and adaptability with regard to agent behavior. The results show that players with initially high risk preferences who are lucky can adapt their gambling strategies to increase their relative wealth. This model provides a rudimentary foundation for demonstrating that natural behavioral preferences and luck can form the basis of inequality. We support the presumptions of the model with a discussion of experimental research in economic behavior, decision-making behavior and evolutionary psychology.

In this paper I evaluate the likelihood for conflict or cooperation among member states of the Eu... more In this paper I evaluate the likelihood for conflict or cooperation among member states of the European Community by applying and comparing the theoretical arguments of institutionalism and the new economics of organization (NEO) against those of Realism. I present first the theoretical foundations of the debate and then apply these to the specific policy proposals embodied in the Single European Act.

I also consider the prospects for European cooperation or conflict within the context of the historical development of the EU over time as well within the constraints of the international political economy.

With this analysis I conclude that the prospects for European cooperation are enhanced by measured institutional development, the evolutionary progression of integration and the gravitational pull of economic interdependence. Economic interdepedence increases the
incentives to private actors for cross-border cooperation and EC institutions can serve to empower national governments to manage and resolve conflicting domestic interests in favor of long-term strategic interests.

Several factors are potentially problematic to EU cooperation. First, the large and potentially increasing number of members may increase procedural grid-lock with a frustratingly slow pace or inability for decision-making. Second, EU supranational institutions need to adhere
to the principle of democratic accountability to insure widespread acceptance of their legitimacy.

Finally, international politics and economics may pose potential threats to the process. The disintegration of the Soviet empire and Yugoslavia and a possible European or world-wide recession pose considerable obstacles to the EU.

In sum, these pluses and minuses for EU cooperation should primarily affect the pace of integration but not the overall long-term direction. As evidenced by the controversy over the Maastricht Treaty, this pace should be expected to be slow and uneven.

Industrial organization and corporate governance varies considerably across developed countries. ... more Industrial organization and corporate governance varies considerably across developed countries. The most measured comparisons are between the U.S., Germany,
and Japan. One of the more notable differences in forms of corporate governance relate to the role of financial institutions. In Germany and Japan, large and powerful financial institutions play an active role in monitoring corporate decisions.

These institutions, predominantly commercial or universal banks, accomplish this through seats on the Board of Directors as representatives of both creditor and shareholder interests. In the U.S. financial institutions are fragmented by legislation and regulation. Commercial and
investment banks, trust companies, mutual funds, and pension funds are all severely constrained in their ability to monitor firm behavior.

The general proposition of this paper is that the laws and regulations that have shaped American finance are rooted in the political process. More simply, politics has, to
a significant extent and a variety of ways, shaped finance. A political theory of American finance has been advanced by Roe (1991) where he identifies legislation and regulations
that have directly affected the activities of U.S. financial institutions.

One of the most significant pieces of legislation, the Banking Act of 1933, or Glass-Steagall, is the case study analyzed in this paper. My intention is to show how politics has helped to shape finance through a legislative history of Glass-Steagall. The political process can be seen as a function of group interests played out through the political structure. This paper identifies and evaluates these group interests in shaping the different parts of the bill and also shows how unfolding historical events affected the final outcome of the legislation.

By this analysis this study hopes to provide one link in the chain of a more comprehensive political theory of American finance with its implications for comparative corporate governance, industrial organization and economic performance.