Economics as a Social Science: Readings in Political Economy
George Argyrous and Frank Stilwell (eds)
Sydney: Pluto Press, 1996. $39.95
Reviewed by Peter Harkness
The book contains 56 short articles divided into four categories: "Economics as a Social Science" (which stresses the need to study power, class, inequality, gender and race); "Frameworks of Economic Analysis" (which demonstrates the importance of paradigms other than neoclassical economics, e.g. post-Keynesian, institutional, Marxist); "Alternative Political-Economic Perspectives" (such as green, feminist and development economics); and "From Economic Analysis to Economic Policy" (which includes a disturbing description of the social cost to New Zealand of economic rationalism).
On the whole the articles are very accessible and enlightening. The authors include famous names from the past like Marx, Engels, Polanyi and Kalecki and many contemporary ones like Heilbroner, Wheelwright, Stilwell, Trainer, Thurow, Coombs, Stretton and Galbraith.
In the opening piece, Ted Wheelwright succinctly describes the awesome spectre of globalisation unrestrained by the Cold War: transnational corporations are now able to move capital and production anywhere in the world, including the old Eastern Bloc, to minimise labour and other costs (e.g. Swissair and Lufthansa now have their accounts done in India).
National governments grow weaker, while consumerism, which fuels it all, grows ever stronger and more pervasive. Wheelwright suggests that anticommunism held capitalism together; now there are no limits to competition. Nation states prostitute themselves to attract transnational corporations on almost any terms, trading off the welfare of their own citizens. Workers in First World countries have a lot to lose. (And with the labour market deregulation legislation of Kennett and Reith, we see it happening right now.)
Other very good articles are a few showing that inequality is growing worse both within and between countries; one in which Evan Jones shows that government intervention is a silly and loaded term (because capitalism couldn't exist without government intervention), while Hugh Stretton points out that right-wing governments (like Thatcher's) are frequently the most interventionist, but for the benefit, of course, of the upper class. There is a good old article by Bob Connell and Terry Irving explaining that there is a ruling class.
After some solid and very important pieces explaining the essence of Marxist economics, there are several views put about neoclassical economics: an interesting one on its origins by William Barber, in which he indicates why it has focused so narrowly on allocation; and famous pieces by the Friedmans and by Radford, both of which praise the market for its efficiency and naturalness; plus several other good ones.
The section on institutional economics, which is obviously of crucial importance today, was a little slow going. But the following sections on Keynesian and Post-Keynesian economics were lively and interesting, and included useful articles by Phyllis Deane, Argyrous, Kalecki and Nell.
There are too many articles to discuss here; many of those not mentioned (on green, feminist and development economics, and public choice theory) are excellent, and are exactly the sort of thing that economics undergraduates desperately need to be taught if the discipline is to regain the breadth, humanity and educational value which, according to Professor Butlin (in Pusey's article), it used to have.
If all universities would set this text for their Economics I courses, we might not be subjected to the selfish and uncivilised economic rationalist policies being implemented by our current leaders. Those leaders and their advisers need to re-learn economics from a book like this. They need to learn, at least, that the economy is there to serve society, not vice versa.
[The writer is a senior lecturer in economics at Swinburne University of Technology.]