Journal Articles by Joseph Baines
New Political Economy, 2021
The COVID-19 pandemic has amplified longstanding concerns about mounting levels of corporate debt... more The COVID-19 pandemic has amplified longstanding concerns about mounting levels of corporate debt in the United States. This article places the current conjuncture in its historical context, analysing corporate indebtedness against the backdrop of increasing corporate concentration. Theorising leverage as a form of power, we find that the
leverage of large non-financial firms increased in recent decades, while their debt servicing burdens decreased. At the same time, smaller firms experienced sharp deleveraging alongside increasing debt servicing costs. Crucially, smaller corporations also registered severe losses over this period, while large corporations remained profitable, and in fact doubled their net profit margins from the early-1990s to the present.
Taken together, the results from our mapping exercise uncover a series of dramatic changes in the financial fortunes of large versus smaller firms in recent decades, a phenomenon we refer to as the great debt divergence. We explain this divergence with reference to the dynamics of power in the era of ‘shareholder capitalism,’ and we argue that the US political economy in the post-COVID 19 world is likely to resemble the pre-COVID 19 one, only with more market turmoil, more concentration, more inequality, and even less investment.
Review of International Political Economy, 2021
Commodity trading firms occupy a central position in global supply chains and their activities ha... more Commodity trading firms occupy a central position in global supply chains and their activities have been associated with financial instability, social upheaval and manifold forms of ecological devastation. This paper examines these companies in the context of debates regarding corporate financialization. We find that since the 2003-2011 commodity boom, trading firms have become less financialized in terms of the source of their profits as they have shifted away from financial activities. However, they have become more financialized in terms of the destination of profits, with dividend and share repurchase commitments reaching new heights after 2015. In view of this finding, we inquire into whether trading firms’ growing commitment to shareholder payouts will
encourage them to continue to prioritize short-term returns, or whether instead these
firms’ linkages to financial markets will lend clout to financial activists concerned by the
long-term environmental and social consequences of their operations. Ultimately, we
find several sources of commodity trader resilience which insulate them from
shareholder resolutions and divestment campaigns aimed at curbing ecological
destruction and human rights abuses in their supply chains. We accordingly suggest that
pressures from activist investors must be complemented with more wide-ranging efforts
to defend living systems across the planet.
Politics & Society , 2020
Corporate concentration in the United States has been on the rise in recent years, sparking a hea... more Corporate concentration in the United States has been on the rise in recent years, sparking a heated debate about its causes, consequences, and potential remedies. In this study, we examine a facet of public policy that has been largely neglected in current debates about concentration: corporate taxation. As part of our analysis we develop the first empirical mapping of the effective tax rates (ETRs) of nonfinancial corporations disaggregated by size and broken down by jurisdiction. Our findings reveal a striking and persistent tax advantage for big business. Since the mid-1980s, large corporations have faced lower worldwide ETRs relative to their smaller counterparts. The regressive worldwide ETR is driven by persistent regressivity in the domestic ETR and a marked drop in the progressivity of the foreign ETR over the past decade. We go on to show how persistent regressivity in the worldwide tax structure is bound up with the increasing relative power of large corporations within the corporate universe, as well as a shift in firm-level power relations. As large corporations become less disposed to investments that may indirectly benefit ordinary workers, they become more disposed to shareholder value enhancement that directly benefits the asset-rich. What this means is that the corporate tax structure is connected not only to rising corporate concentration, but also to widening household inequality.
New Political Economy, 2019
The relationship between inequality and financial instability has become a thriving topic of rese... more The relationship between inequality and financial instability has become a thriving topic of research in heterodox political economy. This article offers the first critical engagement with one specific framework within this wider literature: the Capital as Power (CasP) model of the stock market developed by Shimshon Bichler and Jonathan Nitzan. Specifically, we extend the CasP model to other advanced capitalist countries, including Germany, France, the United Kindgom, and Japan. Our findings affirm the core prediction of the CasP model, showing that unequal power relations reliably predict future stock market performance. Yet when it comes to the CasP model's explanation of why power relations predict stock market returns, our findings are more ambiguous. We find little empirical support for the claims that capitalist power is dialectically intertwined with systemic fear, and that systemic fear and capitalized power are mediated through strategic sabotage. The main lesson of our analysis is that any model of the stock market must be attentive to the geographical unevenness and continued national diversity in capitalist development.
This paper considers the domestic and international ramifications of financialization and grain p... more This paper considers the domestic and international ramifications of financialization and grain price instability in the US agri-food sector. It finds that during the recent period of high and volatile prices, the average income of large-scale farms reached the earnings threshold of the top percentile of US households, and agricultural commodity traders markedly outperformed other major corporate groups. In contrast, small-scale farms, particularly those involved in cattle and wheat production, have struggled to manage the uncertainty brought by price tumult. The paper goes on to examine the role that these uneven distributional dynamics play in debates around how hedging and speculation should be defined and regulated in the wake of the food crisis of 2007-08. It shows that a coalition of small-scale farmers has actively pushed for a far-reaching definition of speculation and concomitantly wide-ranging curbs on what they deem to be speculative activity. Conversely, the major commodity traders and a plurality of organizations representing large-scale grain producers have called for a narrower interpretation of speculation which leaves the extant regulatory regime largely in place. With these insights I suggest that financialization and associated price volatility tend to reinforce inequality in rural America while possibly exacerbating social instability and hardship abroad.
The Journal of Peasant Studies, Jan 2015
The agrofuel boom has brought about some of the most significant transformations in the world foo... more The agrofuel boom has brought about some of the most significant transformations in the world food system in recent decades. A rich and diverse body of agrarian political economy research has emerged that elucidates the conflicts and redistributional shifts engendered by these transformations. However, less attention has been given to differences within agri-food capital. This paper contributes to the existing literature on agrofuels, by showing how one cluster of agri-food corporations and farmers within the US has benefited from soaring ethanol production at the expense of another cluster. More specifically, I delineate and chart the pecuniary trajectories of two corporate-led coalitions that have vied over the course taken by the US ethanol sector: the ‘Agro-Trader nexus’ and the ‘Animal Processor nexus’. My main finding is that the US ethanol boom has been a vector of redistribution: increasing the earnings of the Agro-Trader nexus and corn growers while reducing the earnings of the Animal Processor nexus and livestock farmers. This finding points to the limits and contradictions of agrofuels capitalism and the acute tensions that exist at the heart of the corporate food regime.
New Political Economy, Jan 2014
This paper outlines the contours of a new research agenda for the analysis of food price crises. ... more This paper outlines the contours of a new research agenda for the analysis of food price crises. By weaving together a detailed quantitative examination of changes in corporate profit shares with a qualitative appraisal of the restructuring in business control over the organisation of society and nature, the paper points to the rapid ascendance of a new power configuration in the global political economy of food: the Agro-Trader nexus. The agribusiness and grain trader firms that belong to the Agro-Trader nexus have not been mere ‘price takers’, instead they have actively contributed to the inflationary restructuring of the world food system by championing and facilitating the rapid expansion of the first-generation biofuels sector. As a key driver of agricultural commodity price rises, the biofuels boom has raised the Agro-Trader nexus's differential profits and it has at the same time deepened global hunger. These findings suggest that food price inflation is a mechanism of redistribution.
Review of Capital as Power, Apr 2014
This article offers a power theory of value analysis of Wal-Mart’s contested expansion in the ret... more This article offers a power theory of value analysis of Wal-Mart’s contested expansion in the retail business. More specifically, it draws on, and develops, some aspects of the capital as power framework so as to provide the first clear quantitative explication of the company’s power trajectory to date. After rapid growth in the first four decades of its existence, the power of Wal-Mart appears to be flat-lining relative to dominant capital as a whole. The major problems for Wal-Mart lie in the fact that its green-field growth is running into barriers, while its cost cutting measures seem to be approaching a floor. The article contends that these problems are in part born out of resistance that Wal-Mart is experiencing at multiple social scales. The case of Wal-Mart may tell us about the wider limits of corporate power within contemporary capitalism; and the research methods outlined here may be of use to scholars seeking to conduct political-economic research on the pecuniary trajectories of other major firms.
Book Chapters by Joseph Baines
in Van der Pijl, ed. (forthcoming) Handbook of the International Political Economy of Production
Papers by Joseph Baines
Commodity trading firms occupy a central position in global supply chains and their activities ha... more Commodity trading firms occupy a central position in global supply chains and their activities have been associated with financial instability, social upheaval and manifold forms of ecological deva...
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Journal Articles by Joseph Baines
leverage of large non-financial firms increased in recent decades, while their debt servicing burdens decreased. At the same time, smaller firms experienced sharp deleveraging alongside increasing debt servicing costs. Crucially, smaller corporations also registered severe losses over this period, while large corporations remained profitable, and in fact doubled their net profit margins from the early-1990s to the present.
Taken together, the results from our mapping exercise uncover a series of dramatic changes in the financial fortunes of large versus smaller firms in recent decades, a phenomenon we refer to as the great debt divergence. We explain this divergence with reference to the dynamics of power in the era of ‘shareholder capitalism,’ and we argue that the US political economy in the post-COVID 19 world is likely to resemble the pre-COVID 19 one, only with more market turmoil, more concentration, more inequality, and even less investment.
encourage them to continue to prioritize short-term returns, or whether instead these
firms’ linkages to financial markets will lend clout to financial activists concerned by the
long-term environmental and social consequences of their operations. Ultimately, we
find several sources of commodity trader resilience which insulate them from
shareholder resolutions and divestment campaigns aimed at curbing ecological
destruction and human rights abuses in their supply chains. We accordingly suggest that
pressures from activist investors must be complemented with more wide-ranging efforts
to defend living systems across the planet.
Book Chapters by Joseph Baines
Papers by Joseph Baines