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Regimes of Differential Accumulation: Mergers, Stagflation and the Logic of Globalization

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  • Nitzan, Jonathan

Abstract

The paper offers a new approach for analysing capitalist development and crisis, tying together mergers and acquisitions, stagflation and globalization as integral facets of accumulation. The framework builds on the concept of differential accumulation, emphasizing the power drive by dominant capital groups to beat the average and exceed the normal rate of return. Four regimes of differential accumulation are articulated: internal breadth by amalgamation, external breadth through green-field investment, internal depth via cost-cutting, and external depth through stagflation. The complex relationships between these different regimes, as well as their broader societal implications, are analysed in light of the US experience over the past century. Several broad conclusions emerge. (1) Of the four regimes, the most important are amalgamation and stagflation, which tend to oscillate inversely to each other. (2) Over the longer haul, amalgamation grows exponentially relative to green-field investment, contributing to the stagnation tendency of modern capitalism. (3) The wave-like pattern of mergers and acquisitions reflects the progressive break-up of socioeconomic ‘envelopes’, as dominant capital moves through successive amalgamation at the industry, sectoral, national, and, finally, global level. In this sense, the current global merger wave is an integral facet of differential accumulation. (4) Periodic lulls in amalgamation tend to be compensated for by stagflation, which appears as a crisis at the societal level, but which contributes significantly to differential accumulation at the disaggregate level. An end to the present worldwide merger boom could therefore trigger global stagflation. (5) Stagflation crises have been previously 'resolved' when dominant capital broke its existing envelope, pushing to amalgamate within a broader universe of takeover targets. Given that there is nothing more to conquer beyond the global envelope, future stagflation crises may prove much more difficult to tame.

Suggested Citation

  • Nitzan, Jonathan, 2001. "Regimes of Differential Accumulation: Mergers, Stagflation and the Logic of Globalization," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, pages 226-274.
  • Handle: RePEc:zbw:espost:157771
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    References listed on IDEAS

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    2. Bichler, Shimshon & Nitzan, Jonathan, 2013. "Can Capitalists Afford Recovery? Economic Policy When Capital is Power," Working Papers on Capital as Power 2013/01, Capital As Power - Toward a New Cosmology of Capitalism.
    3. Bichler, Shimshon & Nitzan, Jonathan, 2002. "New Economy or Transnational Ownership? The Global Political Economy of Israel," EconStor Preprints 157818, ZBW - Leibniz Information Centre for Economics.
    4. Park, Hyeng-Joon, 2013. "Dominant Capital and the Transformation of Korean Capitalism: From Cold War to Globalization," EconStor Theses, ZBW - Leibniz Information Centre for Economics, number 157990, November.
    5. Jonathan Nitzan & Shimshon Bichler, 2001. "Going global: differential accumulation and the great U-turn in South Africa and Israel," Review of Radical Political Economics, Union for Radical Political Economics, vol. 33(1), pages 21-55, March.
    6. Bichler, Shimshon & Nitzan, Jonathan, 2012. "The Asymptotes of Power," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, pages 18-53.
    7. Syed Ozair Ali, 2012. "Power, Profits and Inflation: A Study of Inflation and Influence in Pakistan," Working Papers id:4693, eSocialSciences.
    8. McMahon, James, 2018. "Is Hollywood a Risky Business? A Political Economic Analysis of Risk and Creativity," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, pages 1-24.
    9. Bichler, Shimshon & Nitzan, Jonathan, 2012. "Imperialism and Financialism. A Story of a Nexus," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, pages 42-78.
    10. Syed Ozair Ali, 2011. "Power, Profits and Inflation: A Study of Inflation and Influence in Pakistan," SBP Working Paper Series 43, State Bank of Pakistan, Research Department.
    11. McMahon, James, 2015. "What Makes Hollywood Run? Capitalist Power, Risk and the Control of Social Creativity," EconStor Theses, ZBW - Leibniz Information Centre for Economics, number 157994, November.
    12. Bichler, Shimshon & Nitzan, Jonathan, 2015. "Still About Oil?," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, pages 49-79.
    13. Charis Vlados, 2020. "The Dynamics of the Current Global Restructuring and Contemporary Framework of the US–China Trade War," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 12(1), pages 4-23, January.
    14. Nitzan, Jonathan & Bichler, Shimshon, 2014. "Can Capitalists Afford Recovery? Three Views on Economic Policy in Times of Crisis," Review of Capital as Power, Capital As Power - Toward a New Cosmology of Capitalism, vol. 1(1), pages 110-155.
    15. Or Raviv, 2017. "Europe's Mea Culpa: A Global Economy Gone Mad or a Crisis of Our Own Making?," Global Policy, London School of Economics and Political Science, vol. 8(2), pages 159-169, May.
    16. Nitzan, Jonathan & Bichler, Shimshon, 2006. "New Imperialism or New Capitalism?," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, pages 1-86.
    17. Nitzan, Jonathan & Bichler, Shimshon, 2002. "The Global Political Economy of Israel," EconStor Books, ZBW - Leibniz Information Centre for Economics, number 157972.
    18. Bichler, Shimshon & Nitzan, Jonathan, 2017. "Growing through Sabotage: Energizing Hierarchical Power," Working Papers on Capital as Power 2017/02, Capital As Power - Toward a New Cosmology of Capitalism.
    19. Nitzan, Jonathan & Bichler, Shimshon, 2018. "The CasP Project: Past, Present, Future," Review of Capital as Power, Capital As Power - Toward a New Cosmology of Capitalism, vol. 1(3), pages 1-39.
    20. Ali, Syed Ozair, 2011. "Power, Profit and Inflation: A Study of Inflation and Influence in Pakistan," EconStor Preprints 157853, ZBW - Leibniz Information Centre for Economics.
    21. Bichler, Shimshon & Nitzan, Jonathan, 2020. "Growing through Sabotage: Energizing Hierarchical Power," Review of Capital as Power, Capital As Power - Toward a New Cosmology of Capitalism, vol. 1(5), pages 1-78.
    22. Bichler, Shimshon & Nitzan, Jonathan, 2019. "Making America Great Again," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, pages 2-12.

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