An Introduction to Political Economy
Under contract with Polity Press.
Contents
1 An unexpected introduction to capitalism
1.1 The problem of complexity
1.2 A monster summoned from the depths of human nature
1.3 What is political economy
2 What is “capitalism”?
2.1 Criteria for a good definition
2.2 Socialism is not the only alternative to capitalism
2.3 The transition to mass flourishing has occurred under capitalism
2.4 Thick concepts of capitalism
2.5 Capitalism and its alternatives
2.6 Capitalism as a process
2.7 Capitalism in one picture
3 Before capitalism
3.1 The early growth of commerce in Europe
3.2 From feudalism to mercantilism
3.3 The failure of Italian city states
3.4 What was so special about Britain?
3.5 The birth of American capitalism
3.6 Proto-capitalism in China
3.7 Bourgeois dignity
3.8 Mass production and mass consumption
4 Entrepreneurship and the scarcity of capital
4.1 The limits of moral philosophy
4.2 The role of entrepreneurs
4.3 Capitalism is more than capital accumulation
4.4 Entrepreneurship is everywhere, but capitalism isn’t
4.5 From traditional patronage to modern stock markets
4.6 New tools for financing new ideas
4.7 Where do good ideas come from?
5 Competition and economic disruption
5.1 The price system as a coordination device
5.2 Why techno-socialism is not possible
5.3 Competition as a discovery procedure
5.4 Creative destruction
5.5 Negative externalities, good and bad
6 How capitalism creates its own institutions
6.1 Capitalism is not a set of government-enforced rules
6.2 Clubs and signaling
6.3 The spread of women’s rights in 19th century United States
6.4 Industrial safety from 19th century pressure vessels to modern day
skyscrappers
7 The sustainability of capitalism
7.1 The Solow growth model
7.2 The recent decline of growth on the frontier
7.3 Baumol’s cost disease
7.4 The importance of fossil fuels
8 Productivity, equality, and conflict
8.1 The escape from the Malthusian Trap
8.2 The importance of distributional conflict
8.3 The paradox of power
8.4 Two problems with class conflict theories
8.5 The legitimacy problems of capitalism
9 The world according to Adam Smith
9.1 Specialization and the emergent structure of the economy
9.2 Specialization as a source of anti-capitalist frustration
9.3 The value of human life and the limits of economic logic
9.4 The extent of the market
9.5 A critical assessment of Smith’s model
10 Economic convergence
10.1 Mass-production and the expansionary nature of capitalism
10.2 Movements of capital are conditional on institutions
10.3 Economic freedom and growth
10.4 Democracy and growth
10.5 Development under poor institutions: the example of Vietnam
10.6 How institutions and norms interact
10.7 How China got rich
11 Individualism and meaningful work
11.1 Opportunity and responsibility
11.2 Personal authenticity in the middle of a capitalist economy
11.3 Bullshit jobs
11.4 Poverty as injustice
11.5 Meaningful work
11.6 How much happiness does money bring?
11.7 Uncertainty and the entrepreneurial mindset
12 Does capitalism corrupt our morals and destroy our culture?
12.1 The morality of capitalism
12.2 Norms that are morally indifferent to markets
12.3 The age of nihilism
12.4 Altruism vs generosity
13 Varieties of capitalism
13.1 Competing narratives about the last 50 years
13.2 Structural changes
13.3 Policy outcomes and institutional diversity
13.4 The performance of different capitalist varieties
13.5 Freer markets, more rules
Description
This book provides an introduction to the study of capitalism. To understand capitalism we need to understand both its history and its alternatives. The economic and political institutions that underpin modern capitalism have a long and difficult history, and some of them have faced and continue to face fierce contestation. This book explains the role these institutions play in enabling economic progress and continued prosperity, and identifying the nature of the challenges that one must face when thinking about alternatives to capitalism or, more modestly, about reforms to capitalism.
Almost since its inception, capitalism has experienced periodic crises of legitimacy. Each time the concerns about the basic justice and equity of the system have reached their peaks, a re-evaluation of the system has followed, usually accompanied by various policy and institutional changes. We are once again in a period of low legitimacy and high doubt, partly as a consequence of the long shadow left by the 2008 financial crisis, partly due to longer term problems, such as the decline in productivity and low growth in real wages since mid-1970s, and partly due to broader changes in culture, such as the increased attention paid to gender and race issues. It is thus time for another re-evaluation of the system, but what I propose in this book is a broader re-evaluation, taking into account the entire history of capitalism and its challenges. Rather than focusing too narrowly on the present crisis of legitimacy, which risks over-emphasizing transient issues, we should consider the bigger questions: Why is capitalism suffering from such periodic crises of legitimacy? Is there a viable alternative to the system? What have we learned from the failure of socialism? Is China’s “state capitalism” a genuine threat to democratic capitalism? Can the system be reformed such that it becomes more robustly stable while maintaining its capacity for growth, or is a life of perpetual disruption and uncertainty the best we can hope for? Are certain varieties of capitalism inherently more desirable than others or are we stuck forever arguing about difficult trade-offs? Are the capitalist systems moving in some predictable direction or is the future entirely open-ended?
Vlad Tarko 