Unequal Exchange and the Rentier Economy

Ron Baiman
Additional contact information
Ron Baiman: Graduate Business Administration, Benedictine University, Lisle, IL, USA

Review of Radical Political Economics, 2014, vol. 46, issue 4, 536-557

Abstract: Detailed analysis of BEA methodology and data strongly suggests that U.S. GDP is overvalued on the output side. The ability to generate income without producing real value-added output is a key characteristic of a “rentier economy.†Broader indicators include a massive increase in financial activity and “finance, insurance, and real estate†(FIRE), declining manufacturing share, declining real investment in plant and equipment, increased outsourcing of production and rising trade deficits, declining employment and real wage growth, rising profits, growing inequality, and increasing aggregate demand dependency on private (household and business) and public sector debt. Based on these indicators, relative to other advanced countries like Germany, the U.S. has since the mid-1970’s increasingly become a “rentier economy.†Grafting a schematic “rentier economy†onto a simple “free trade unequal exchange†model from Baiman (2006) highlights the labor exchange, inequality, and efficiency characteristics of rentier United States, unequal exchange (German), and developing country (China), economies. Reviving the U.S. economy and restoring full employment will require a public policy induced reallocation of resources away from rentier activity back to productive high-value added “unequal exchange†production.

Keywords: full employment; unequal exchange; rentier economy; national income and product accounts; federal deficit; trade deficit (search for similar items in EconPapers)
JEL-codes: E01 E11 E12 F16 F41 J21 (search for similar items in EconPapers)
Date: 2014
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://rrp.sagepub.com/content/46/4/536.abstract (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sae:reorpe:v:46:y:2014:i:4:p:536-557

Access Statistics for this article

More articles in Review of Radical Political Economics from Union for Radical Political Economics
Bibliographic data for series maintained by SAGE Publications ().