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Shaikh - Capitalism: competition, conflict, crises

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Shaikh Capitalism: competition, conflict, crises
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Orthodox economics operates within a hypothesized world of perfect competition in which perfect consumers and firms act to bring about supposedly optimal outcomes. The discrepancies between this model and the reality it claims to address are then attributed to particular imperfections in reality itself. In Capitalism, Shaikhs approach demonstrates that most of the central propositions of economic analysis can be derived without any reference to standard devices such as hyperrationality, optimization, perfect competition, perfect information, representative agents, or so-called rational expectations. In every case, Shaikhs innovative theory is applied to modern empirical patterns and contrasted with neoclassical, Keynesian, and Post-Keynesian approaches to the same issues. Shaikhs object of analysis is the economics of capitalism, and he explores the subject in this expansive light. This is how the classical economists, as well as Keynes and Kalecki, approached the issue. Anyone interested in capitalism and economics in general can gain a wealth of knowledge from this ground-breaking text.--Amazon.com.

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Capitalism

Capitalism competition conflict crises - image 1

Oxford University Press is a department of the University of Oxford. It furthers the Universitys objective of excellence in research, scholarship, and education by publishing worldwide. Oxford is a registered trade mark of Oxford University Press in the UK and certain other countries.

Published in the United States of America by Oxford University Press 198 Madison Avenue, New York, NY 10016, United States of America.

Oxford University Press 2016

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, without the prior permission in writing of Oxford University Press, or as expressly permitted by law, by license, or under terms agreed with the appropriate reproduction rights organization. Inquiries concerning reproduction outside the scope of the above should be sent to the Rights Department, Oxford University Press, at the address above.

You must not circulate this work in any other form and you must impose this same condition on any acquirer.

Library of Congress Cataloging-in-Publication Data

Names: Shaikh, Anwar, author.

Title: Capitalism : competition, conflict, crises / Anwar Shaikh.

Description: Oxford; New York, NY : Oxford University Press, [2016] | Includes bibliographical references and index.

Identifiers: LCCN 2015034905 | ISBN 9780190298340 (ebook)

Subjects: LCSH: Capitalism. | Competition.

Classification: LCC HB501 .S5696 2016 | DDC 330.12/2dc23

LC record available at http://lccn.loc.gov/2015034905

135798642

Printed by Sheridan Books, USA.

Appedices

Appendices

This book has been in the making for fifteen years. An earlier attempt was abandoned in 1998 after a decade because it was riven by competing goals: a genealogy of the tenets of classical economics; and the repair, refinement, and application of these to modern capitalism. The central object of investigation of the present volume is capitalism itself.

Many people have helped and supported me over this long haul. My wife Maria Jos and stepdaughter Paula, who met me when I began this project, have sustained me with their love and patience. My sister Farida and brother Asif believed in me from the start and have always encouraged me to keep on going.

Dimitri Papadimitriou and Rob Johnson provided me with great personal and material support. Major parts of this book were shaped during sojourns in the Levy Economics Institute of Bard College, and the final draft was underwritten by two grants from the Initiative for New Economic Thinking (INET). I would not have been able to complete this task without their crucial support.

Ahmet Tonak, Howard Botwinick, Mary Malloy, Katherine Kazanas, Charles Post, Bettina Cetto, Rania Antonopoulos, Pablo Ruiz Npoles, Olga Alexakos, Lefteris Tsoulfidis and Persefoni Tsaliki, Thanassis Maniatis, Andriana Vachlou, Jamee Moudud, Manuel Roman and Ascension Mejorado, and Malcolm Dunn became my friends over the many years of our collaborations, and their support has been invaluable.

Jamee Moudud, Ascension Mejorado, Gennaro Zezza, Amr Ragab, Jon Cogliano, Jan Keil, and Francisco Martinez Hernandez also helped me on countless occasions with research and data handling. And in the last stage Ilker Aslantepe has been unstinting in his dedication and tireless in his efforts to bring this work to fruition.

My dear, now deceased friends Jos Ricardo Tauile and Jonas Zoninsein were in my corner from the earliest of days. We shared many hours in theoretical discussion and equally many in laughter. John Weeks and Liz Dore adopted both my project and my person when I lived with them in London in 1998. Vivek Chibber urged me on again and again when I faltered. Paul Altesman has never failed to cheer for me. Juan Santarcangelo and Andres Guzman provided moral support as well as detailed feedback on the first draft. Vela Velupillai became a supporter and guide, and dear friend, in the last few years. Most recently, Andrew Mazzone has helped me over the finish line through his vocal appreciation and personal support.

Capitalism

Currents of time swirling and eddying all about us, on the battlefields and in the military headquarters, in the factories and on the streets, in boardrooms and cabinet chambers, murkily at first, yet tending ever towards a moment of transfiguration in which pattern is born from chaos.

(, 158)

The economic history of the developed capitalist world appears to be one of almost constant progress: inexorable growth, rising standards of living, rising productivity, and ever-improving health, well-being, and welfare. Seen from afar, it is the systems order, its internal coherence, which stands out.

Yet the closer one looks, the more haphazard it all seems. Individuals wander along entangled paths, propelled by obscure motivations toward some dimly imagined ends, crisscrossing and colliding as they act out their economic roles as buyers and sellers, bosses and workers, producers and speculators, employed and unemployed. Information, misinformation, and disinformation hold equal sway. Ignorance is as purposeful as knowledge. Private and public spheres are entwined throughout, as are wealth and poverty, development and underdevelopment, conquest and cooperation. And everywhere there appears a characteristic unevenness: across localities, regions, and nations; and across time, in the form of booms, busts, and breakdowns. Seen up close, it is the systems disorder that is most striking.

How does one address these two, equally real, aspects?

Neoclassical economics, the present-day orthodoxy, provides one answer. It seizes on the first aspect, and purges, or least exiles to theoretical backwaters, the second. The perceived order of the system is recast as the supreme optimality of the market, of the ever-perfect invisible hand. This optimality is in turn projected back onto microscopic units, so-called representative agents, from whose superlatively rational choices it is said to derive. And so we arrive at a particular vision. In its perfectly ordered form, the system equalizes all prices for comparable goods, all wage rates for comparable labors, and all profit rates for comparable degree of risk. Moreover, it fully utilizes all available resources, including available plant, equipment, and labor. All of this without error, instability, or crisis. Only then, after this has been firmly established as the ruling conception, is potential disorder allowed into the story, sotto voce, in grudging concession to the obstinate indifference of the regrettably imperfect real.

Heterodox economics, most notably post-Keynesian economics, generally takes the opposite tack. It emphasizes the inefficiencies, inequalities, and imbalances generated by the system. In the place of perfect competition, we get imperfect competition; in the place of automatic full employment, we get persistent unemployment. Market outcomes now appear as conditional, on history, culture, politics, chance, and most of all, on power: oligopoly power, class power, and, of course, state power. From this point of view, what others may perceive as ordered economic patterns are really contingent paths, arising from historically specific constellations of forces. Desired social outcomes are not automatic, and automatic outcomes are not always desired. Unemployment is more probable than full employment, while inflation and crises are always possible. Hence, there exists an ever-present need for social and economic intervention to fill in the spaces between the actual and the desired. What neoclassical economics promises through the workings of the invisible hand of the market, Keynesian and post-Keynesian economics promises though the visible hand of the state.

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