Publications

Books

Bortis, H. 1997, Institutions, Behaviour and Economic Theory - A Contribution to Classical-Keynesian Political Economy

Cambridge, New York and Melbourne (Cambridge University Press), electronic edition through netLibrary service (eBook) 2002, digital reprinting 2003, paperback edition 2006; Ukrainian edition 2007, Russian edition 2009.

(slightly revised version of chapters 6 and 7: PDF chapter 6 and PDF chapter 7.)

This book is about the conceptual foundations of a humanist middle way between capitalism and socialism which could be called Social Liberalism, i.e. Liberalism on a social - fair distribution and full employment - basis (the social philosophy of Social Liberalism can be associated to Liberal Socialism since a mixed economy with flexible proportions between public and private ownership is considered here). From a standpoint of economic theory, this intermediate way is conceived of as a synthesis of classical (Ricardian) and Keynesian political economy. While the former deals with proportional relations between individuals or collectives and society in tackling the problems of distribution and value on the basis of the surplus principle of distribution and of the labour value principle respectively, the latter is concerned with the scale of economic activity as explained by the principle of effective demand. Political economy pictures the economic aspects of the functioning of the institutional system within which the behaviour of individuals is embedded. The economy considered is, primarily, neither a market nor a planned economy, but, rather, a monetary production economy. To establish an alternative to liberalism and socialism requires setting up a system of the social sciences, based upon an appropriate social philosophy taking account of the individual and social dimensions of human nature. In this work suggestions are made for linking political economy with other social sciences, i.e. sociology, law and politics in the traditional sense, contributing thus to enhance the unity of the social sciences. In a Keynesian vein, the social sciences are conceived of as moral sciences, a view which gives rise to a specific philosophy of history. To complete the picture, issues of method associated with the theory of knowledge in the social sciences and the problem of linking theory with historical reality are also covered.

Bortis, H. 2017, Zurück zur Politischen Ökonomie – 250 Jahre bewegte Geschichte der Wirtschaftstheorie, Abschiedsvorlesung am Freitag, 2. Oktober 2015, an der Universität Fribourg Schweiz, herausgegeben von Barbara Hallensleben, Guido Vergauwen und Nikolaus Wyrwoll, Münster (Aschendorff Verlag).

Bortis, H. 2009. Institutsii, povedenie i ekonomicheskaya teoriya. Vklad v klassiko-keynsianskuyu politicheskuyu ekonomiyu (Institutions, Behaviour and Economic Theory - A Contribution to Classical-Keynesian Political Economy). Translated into Russian by Elena Pervukhina and Tamara Bardadym, Kyev: Vydavnychyi dim "Kyevo-Mohylyanska Academiya", 2009, 598 c.

Bortis, H. 2007. Instituzii, Povedinka ta Ekonomijna Teorija - Vnesok do Klasiko-Keynsianskoi Polititschnoi Ekonomii (Institutions, Behaviour and Economic Theory - A Contribution to Classical-Keynesian Political Economy). Translated into Ukrainian by Tamara Bardadym, Kyiv, Vydavnijii Dim "Kyevo - Mogyljanska Akademija".

Bortis, H. 1992. EWR und EG: Irrwege in der Gestaltung Europas - Ein theoretischer und historischer Essay zu den europäischen Integrationsbestrebungen. Freiburg/Schweiz (Universitätsverlag Freiburg/Schweiz).

Bortis, H. 1979. Foreign Resources and Economic Development from the Early Fifties to the Oil Crisis. Fribourg: University Press.

Bortis, H. 1971. Produkttechnischer Fortschritt und Profite - Eine mikroökonomische Darstellung. Berlin: Duncker/Humblot.

A Note on Financialization: Two types of wealth management

The two types of wealth management are active and passive wealth management. The first type of wealth management is not familiar, the second is familiar.

1. Active wealth management is related to normal bank activities.

On the liabilities side of the bank sheet are wealth items, for example company capital (share capital for joint stock companies), bonds (borrowed by the bank), saving deposits.

On the asset side there are, for example, investment credits to firms, small and big. Hence investment credits go into the productive sector where values are created. Productive investments may be risky. Profits and losses on productive investment increase or reduce company capital. Money circulates in the real (productive) sector.

2. With passive wealth management investment goes into already existing investment objects (gold, real estate, land, shares (transactions at the stock exchange), objects of art). It is not production which dominates, but transactions; there is no risk for the banks, although there is risk for the wealth owners, for example with speculation at the stock exchange.

Money circulates in the financial sector; no values are created.

3. The interaction of the two types of wealth management together with money creation by the banks brings about the process of financialization. The consequence is that the financial sector increasingly dominates the productive sector:

Banks refrain from financing risky investments in the productive sector, above all investment projects of small and medium-sized enterprises and prefer to move financial resources to the no-risk financial sector (passive wealth management). Investment credits for the productive sector are mainly provided to large enterprises, enjoying dominating market positions, because risk is small or non-existent. This leads on to an increasing polarisation in the productive sector, and also in society, because the middle class (Mittelstand) is gradually weakened.

These themes are taken up mainly in Bortis (2015) below:

Bortis, H. 2015, Capital mobility, [financialization] and natural resources dynamics: a classical-Keynesian perspective, in: Mauro Baranzini, Claudia Rotondi and Roberto Scazzieri (eds.): Resources, Production and Structural Dynamics, Cambridge: Cambridge University Press, pp.155-173.

This paper illustrates the crucially important distinction between active and passive wealth management. See also: Bortis (2013), Post-Keynesian Principles and Economic Policies, vol. 2, pp. 346-52.