Alan Shipman

Lauding the Leisure Class: Symbolic Content and Conspicuous Consumption

Symbolic consumption is assessed as an evolution of previously identified conspicuous consumption, after this has undergone a “de-materialization” that is socially, as much as ecologically, driven. As Veblen observed, the shift of wealth towards new forms of physical and financial capital with industrialization compels traditional wealth-holders to redefine privilege in terms of cultural capital. Accompanying social changes enable them to do so. The limited reproducibility of items consumed for their symbolic value, and slow transmissibility of the means of symbolic consumption, force holders of new wealth to compete for status on terms set by the established leisure class. Conspicuity shifts from quantity to quality, from the appropriation of materially valued products to the appreciation of culturally valued products. This paper examines some key implications of a shift from “waste” to “taste” in conspicuous consumption for the social and natural environment, and for economic development. In particular, it explores the possibility of branded products representing the mass production of symbolic goods in high-income economies; and the brand premiums potentially beneficial consequences for global income distribution, when branded production relocates to lower-income economies in conditions of free trade.

University under siege

This paper explores the changes that are taking place in European higher education: a shift from the Humboldtian notion of the university to one that operates under quasi-market pressures. While increasing the culture of accountability in universities, this development, linked to shifts in their sponsorship and associated ‘missions’, is associated with an erosion of traditional mechanisms of trust. The focus is on UK experience, which is now extending internationally. Lessons are drawn on some of the institutional changes and problems that may lie ahead for European universities.

Accounting for Productive Investment and Value Creation

Noting that the contribution of R&D is being integrated into national accounts just as these come under criticism for potentially overstating output, this paper uses a re-assessment of the concept of value to examine scope for under- and over-statement in conventional GDP. It assesses ways in which R&D may generate value without registering an income flow, and ways that other activities (notably financial innovation, speculation and outsourcing) might generate income without adding value; and examines equity markets’ role in valuation.

The Destination of Wealth

‘Classical’ economists, notably Adam Smith (1979 [1776]), are often depicted as having focused on the origin of wealth. Critics of contemporary economics accuse it of losing this focus, shifting attention to circular flows of income regulated by price. The ‘neoclassical’ approach is accused of lacking a theory of value, ignoring the stock implications of income and expenditure flows (Godley & Lavoie 2007), and artificially separating distribution from production through arbitrary assumptions about production functions and their marginal properties (Eatwell & Milgate 1983). The ‘neo-Keynesian’ approach, even if acknowledged as more than ‘neoclassicism with sticky prices’, is accused of prioritizing problems of short-term stability when the central puzzle should be how to achieve long-term growth. So when reappraisals and reorientations of economics are suggested, they tend to assume this means returning to a focus on the origin of wealth (e.g. Beinhocker 2005, Coyle 2007, Stonier 1983).

An Obvious Excess of Capital

The idea that capitalism can work without capital is clearly absurd. It’s got to be there — not just by definition, but because economic activity is stalled without it. When just a few dollars’ worth of capital is added to poor people’s ingenuity and industry, it can unlock the commercial drive that lifts them out of poverty (Banerjee & Duflo 2011: Ch. 9, De Soto 2000, Yunus 2003). Plenty of informed observation shows that people on low incomes have the incentive and inventiveness to prosper, and it is for want of an — often tiny — endowment of capital that they remain stuck in a hand-to-mouth existence.

A Still More Obvious Excess: Capital as Wealth

Saving may not translate easily into the ‘real’ investment required to expand production, but it is the basis for personal investment aimed at securing some of the income from production. And whereas physical capital assets depreciate, requiring investment simply to maintain them, financial assets have the potential to appreciate, allowing fortunes to expand even if their income flows partly to consumption as well as reinvestment. In economies rich enough to save, the pool of unspent income steadily rises over time and is channelled into assets designed to protect its value and generate additional income. A consequence is that ‘second-hand’ assets — including previously issued shares and bonds, old houses and classic artworks — can encounter rising demand and appreciate in value despite advancing age (Scitovsky 1994). If these durable private-investment assets are included in capital, its expanding size becomes a source of social as well as economic strains.

What Isn’t There? Capital Definitions and Measurements

Macroeconomic theory suggests the world continually accumulates capital, making it liable to an excess. Microeconomic observation finds firms, banks and governments doing all they can to economize on capital. The inconsistency is most likely to reflect differences in the definition of capital, some of which were already visible in the first three chapters. There, capital was variously treated as physical means of production, sums of money used to finance the operation of means of production, personal wealth (perhaps built up through flows of personal saving), or the stock that accumulates from flows of net investment. Capital flows as sums of money, but its stock more usually takes the form of physical resources or entitlements with monetary value. The studies reviewed in Chapter 1 suggest an excess flow which might coexist with shortage of stocks, while those of Chapter 2 point to excess stocks despite deficiency of flows.

In Practice It’s Scarce

If there was really a surplus of capital in the late 20th and early 21st centuries, someone forgot to tell those running the world’s banks and non-financial businesses. They continued to behave as if capital were scarce and expensive, and needed to be carefully conserved. Economic problems since the early 1990s can be linked to a shortage of capital more plausibly than to any surplus.

Economies without Capital

If capital’s role in economies has been substantially reduced, can its long-troubling presence in economics fade into the background? That would certainly make life easier for many practitioners and students of the subject, for whom defining capital has been an insoluble and infuriating task for several generations. It is entirely possible that this entire book was encapsulated in a single sentence, 70 years ago, by arguably the greatest of all capital theorists: ‘“Capital” is not what capital is called, it is what its name is called’ (Robinson 1954: 83). But as some much longer books have had to be written to explain this sentence — and agreement has still not been reached — dispensing with the term and the concept might pay dividends all round.

Social sciences and the democratic ideal : from technocracy to dialogue

Social sciences were launched on a wave of expectation that scientific study of society would yield practical benefits, through improved understanding, policy and organisation. This expectation was strengthened through the twentieth century: social sciences staked out new disciplinary areas and developed distinctive methodologies (such as game theory) alongside those imported from the natural sciences. Promising transferable skills for students as well as technical insights for policy makers, they were major beneficiaries of universities’ postwar expansion. But the social sciences now have a harder time selling themselves, partly because they lack any clear consensus as to the values they serve and the direction they should take. Social scientists are a dispersed group with clearly different views about what they stand for, why we should read them, and why universities and governments should continue supporting them.