Slow Growth, Destructive Competition, and Low Road Labor Relations: A Keynes - Marx - Schumpeter Analysis of Neoliberal Globalization

This paper argues that institutions and policies deeply embedded in neoliberal structures have created conditions that make it difficult for large nonfinancial corporations to operate effectively. Important globally-contested industries are understood to be "natural oligopolies" that require what Schumpeter called "corespective competition" to function efficiently. However, neoliberal globalization has slowed global aggregate demand growth and lowered cross-border barriers to competition, unleashing destructive competitive practices. In response to declining profit rates, nonfinancial firms have adopted short-term "survivalist" strategies such as downsizing, outsourcing, wage cuts, anti-union policies and so forth that weaken aggregate demand, creating a vicious circle. Firms also undertake "coerced" investment that makes excess capacity chronic.