Neoliberal Economic Trends, Wealth, Class, and Ownership in the USA by Dumenil and Levy – Book Report/Review Example
The paper "Neoliberal Economic Trends, Wealth, Class, and Ownership in the USA by Dumenil and Levy" is an outstanding example of a book review on macro and microeconomics.
In this text, Dumenil and Levy discuss a social order whose main objective is the increase of income and power of the capitalist class. The central social actor in the transformation is the upper classes who make up the upper factions of the capitalist class and top wage earners such as business managers. Dumenil and Levy coin the term Finance to relate to the upper echelon of the capitalist class and their financial institutions.
Dumenil and Levy reveal the class objective of neoliberalism, which is obvious in the change of income distribution in America. It is evident from the statistics that Dumenil and Levy present that the total income received by households in the 1% top echelon increases from 8% to 18 % of the GDP from 1970 into the years of neoliberal decades. This trend signifies a sharp concentration of income to the top of the income echelon. Dumenil and Levy attribute the increase in income to the top income echelon to several historical factors. Business managers strived to increase the income of corporations. The use of sub-contraction by organizations was successful in the stagnation of the purchasing power of wage earners as it diminished the cost of labor while increasing flexibility. The capital class also shifted their investments to countries where the costs of labor were low.
The industrialization period brought new management and production technologies that firms adopted increasing the proceeds of the capitalists. Dumenil and Levy explain how the 1979 Federal Reserve increases in interest rates were beneficial to lenders who earned huge inflows of interest. Additionally, transformations in corporate governance led to the distribution of dividends, which together with hikes in stock-market indices led to increases in income for the upper-class capitalists. Dumenil and Levy argue that Capitalism in the US has transformed into traditional foundations of globalization including global financial mechanisms, free trade, and cross-border investments.