Sunday, April 10, 2016

Nick Johnson — What I am reading – Capitalism: Competition, Conflict, Crises

Anwar Shaikh on Capitalism.

The Political Economy of Development
What I am reading – Capitalism: Competition, Conflict, Crises
Nick Johnson


Brian Romanchuk said...

Actually, I am reading it too. Extremely comprehensive, and interesting.

John said...


Other than the size, is Shaikh's book similar in any way to Lavoie's book "PK Economics New Foundations"? From what I can gather, a good portion of the content in Shaikh seems to be looking at economics as some sort of emergence phenomena (something I'm sympathetic to) and novel treatment of microeconomics (minimal but realistic constraints producing the usual microeconomic outcomes) rather than the traditional PK and structuralist angle, although there's no reason the two can't be part of a more sophisticated treatment. Anyway, will you do a review in due course?

The proverbial London bus! You wait an age for a good book, and three or more come out at nearly the same time: Lavoie, Shaikh and Mitchell-Wray-Watts! Unlike those who had to learn this stuff the hard way, at long last the heterodox community are making life easy for this generation and the next.

nivekvb said...

I sit in my home and my Hi-Fi is made by a small company that does not advertise or get it's products reviewed by magazines. It sells direct to public and used to rely on word of mouth and recommendation, but they now use social media as well. For the price the quality is staggering. The designers used to win top awards for their Hi-Fi products in Hi-Fi magazines until they went direct to public. I really admire the company.

But competition can cause real stress on individuals; lose your job and you could lose your home. The kids then get stressed and you may have to move and they will have to go to a new school. It is well documented that if children keep changing schools it has a profound negative effect on their personality. Some may grow up as chronic depressives, or drink too much, etc.

I think the stress that capitalism places on individuals is too much. Competition should occur between very clever people designing products, and those who have spare money to invest.

People just accept the status quo thinking this type of capitalism is normal, as Anwar Shaikh says it is. And yes it is, in a way, but if war is normal too, does that mean we have to put up with it?

When we were tribal people and someone got their house blown down everyone in the village would help them build a new home. People did not barter, as Adam Smith said - he just made that up - people just gave each other stuff. Yeah, for free. If your needed some new shoes and your friend had a spare pair he would just give them to you. The next day you might help him in his field, and so on.

This is how we evolved for millenia. It has been shown that primitive people are much happier than us. If the goal of life is to achieve happiness, then capitalism fails abysmally. Kids on Ritalin, 20% of the population on SSRI's, people spending a fortune on counselling, the Middle Class knocking back a bottle of wine at night, and billions of people in the third world as slaves. Which is the only reason why capitalism appears to work.

I think that Answer Shaikh is missing something from his calculations.

Brian Romanchuk said...


Yes , I will be doing a review. I may or may not use the "what I am reading now" title, as I have not yet finished it, but I think I can at least describe the parts that I am most interested in. I might then return to various topics he raises later.

The parts about "emergence" is the most interesting, but he also has a lot of "history of economic thought" in there. That's what pushes it up to 1000 pages. His first chapter summary is probably a significant fraction of the length that I am targeting for my reports...

andy blatchford said...

Started reading it over the weekend, only just through the introduction which is 55 pages long! As said by Brian very comprehensive.

Tom Hickey said...

I think the stress that capitalism places on individuals is too much.

This is the psychological side. Socially it is divisive and disruptive. Politically it results in power and control trips and tends toward government capture. Economically it is staggeringly inefficient chiefly because it is based on economic rent, a form of free ride. The neoclassical model on which it is based is wildly unrealistic, and the so-called "imperfections" occur naturally on one hand, as a result of pursuit of self-interest, and also institutionally due to social stratification and inequality of wealth that tip power and control toward those who control institutional design and operation.

In the course of evolutionary development, humans have not just let nature take its course, but rather have managed outcomes through intentional and organization. Human being are "intentional" as philosophers like to say, which allows for the crucial distinction between natural and artificial — that which occurs by nature and that which occurs by artifice.

Capitalism was a developmental strip forward from feudalism and democratic republicanism a step forward from hereditary nobility. But it is not the end of history. We can do better.

That is the challenge the left faces as the radical forward looking force in society that strike out into the future. This is opposed by the reactionary backward looking force that seeks to conserve the past. This conflict is the basis for the historical dialectic.

Parentally, the trend is reactionary, but there are signs of the rise of radicalism, too. The reactionary wave may be cresting sooner than later.