Theories of Political Economy.

Caporaso and Levine provide an interesting, well written, and provocative survey of alternative conceptions of political economy. The book treats the classical, Marxian, neoclassical, and Keynesian traditions, as well as the contemporary approaches referred to as the power-centered, state-centered, justice-centered, and purely economic models. The book's primary theme reflects the authors' view that many difficulties in understanding political economy result from a propensity to gloss over the distinct nature of the domains of economics and politics. As such, the authors emphasize the desirability of treating economics and politics as categorically distinct concepts with political economy then being conceived of as the relationship between the two.

The analytical framework employed is based on alternative notions of politics and economics. The authors provide three distinct but overlapping conceptions of politics. The first views politics as government, referring to the activities, structure, and processes of government. The second conception centers on the public, meaning activities that involve people in non-exchange situations. This approach includes a distinction between those that define the public in terms of self-interest and those who recognize a public interest, which transcends individual satisfaction. Finally, the authors discuss politics as concerned with the authoritative allocation of values, with economic and political processes serving as alternative allocation mechanisms. Given these alternatives the authors conclude by defining politics as the activities and institutions that relate to making authoritative public decisions for society as a whole.

Three conceptions of economics are also presented, which in combination with their notion of politics, provide the authors' model for discussing alternative approaches to political economy. One concept of economics focuses on the method of economic "calculation." This notion posits a mode of thought or analysis which links individuals to the world, and has individual preferences as its starting point. The focus here is on constrained optimization and individual decision making: the goal being allocative efficiency. A second notion of economics centers on what the author's term "material reproduction" or "provisioning." The emphasis here is on the type of activity that is economic in nature, meaning individual participation in activities resulting in collective reproduction. Preferences are determined socially and objectively in terms of social classes and their relation to the means of production, rather than individually and subjectively. The interdependent processes of production and circulation are emphasized and economic growth is the goal. Finally, economics is defined in terms of the economy itself as a socially and historically specific entity, which is distinct, although related to the polity. While the authors emphasize the separateness of the economy this does not imply that it must be independent of other aspects of the social order. The economy is seen as a unique set of economic institutions and relations independent of individual preferences. As such, the economy has a social reality of its own capable of influencing, shaping, and even determining motivations and modes of analysis, hence has its own social purpose or rationale.

Despite Caporaso and Levine having provided an important and stimulating survey of alternative notions of political economy, the book appears to gloss over two separate, but closely related, distinctions. First, the authors appear to confuse the issues of what different economists attempted to achieve with the actual content of their analysis and policy agendas. For example, their discussion of classical economics confuses the emergence of economics as a separate discipline with the question of the separateness and supremacy of economics over the politics. We agree with the authors that economics as a discipline emerged with the work of the classical political economists in England and France in the middle and late eighteenth century. As we have previously shown the classical economists were the first to have an "objective" or "purposive function" |7; 6~ that was economic rather than theological or political in nature |7; 6; 4; 2; 1; 10~. Recognizing that economics as a separate discipline began with the political economists does not, however, warrant Caporaso and Levine's claim that these writers saw economics as separate from and/or dominant to politics. The Physiocrats' early and incomplete argument for the supremacy of market-capitalism rested squarely on the need for Crown intervention to implement agricultural and fiscal reforms. While the Physiocrats agreed that the economy was regulated by natural law providing the bridge by which conflicting class interests and social welfare could be harmonized, it was the Crown's function to implement policies that were in accord with the natural order. Adam Smith, in turn, argued that market directed capitalism was the most consistent with the rule of nature, and that the self-regulating market could harmonize conflicting class interests and social welfare. However, it is not clear that Smith viewed the economic was separate and apart, much less supreme over the political. Such a conclusion could only be reached by examining portions of "Book I" in isolation from the other four books of the Wealth of Nations. Moreover, Smith was not arguing for replacing a non-market economic system with market-capitalism, rather for replacing of a form of monopoly-capitalism with competitive market-capitalism in its ideal form. His entire analysis was thorough going analytical, historical, and policy attack on British mercantilism. As such, he was amply aware of the interdependency that existed between the political and economic. Finally, can we really believe that the debate over the Poor Laws was unrelated to Malthus's Essay on Population, or that the Corn Law controversy was unrelated to both Malthus's and Ricardo's Principles? In fact, the competitive market, as a mechanism for resource allocation played a remarkably minor role in Ricardo's analysis |5; 3; 1~.

The distinction and resulting interrelationships between the market as one institutional response to resource allocation and capitalism as one means for determining the ownership and control of society's resources is also seemingly minimized in this work. The authors often use the two concepts synonymously, which may lead to much confusion. For example, in their comparative analytical model, they separate economics as reproduction and economics as the economy. This distinction has little basis in substance in any body of economic analysis of which we are aware, and is in part, a reflection of the authors' failure to separate the institution of the market from that of capitalism, which results in a tendency to minimize their economic and political interdependences. What is at stake here is not whether economists think of economics as reproduction or the economy, but whether the economic system is, or is not, taken as a given parameter in the analysis. In classical economics it is not, while in neoclassical and Keynesian economics it is |6; 9; 8; 10~. Caporaso and Levine themselves implicitly recognize that the analysis of reproduction in classical economics, Marx (whom they incorrectly separate from the classical paradigm), and Schumpeter later, can be understood only in terms of the particular economic system with which they were concerned.

The failure to distinguish between the market and capitalism also creates difficulties in the authors' appraisal of the meaning of political economy in classical economics. On the one hand, they conclude that economics was both separate from and dominant over the political in classical theory if the focus is on the self-regulating market mechanism. However, they further contend that quite a different conclusion results if the emphasis is placed on the economic surplus, class conflict, and distribution. To separate the role of the market from capitalism, hence, the surplus, class conflict, and the issue of income distribution makes as little sense as separating the issue of income distribution from growth and social welfare in classical analysis. It is an artificial contrivance resulting from the tendency to slip over the distinction and interdependence between the market mechanism and capitalism, both of which were part and parcel of the classical analysis.

Despite need for some conceptual clarification and inevitable interpretive disagreements, Caporaso and Levine have produced an excellent survey of alternative notions of political economy. They raise a number of important issues and their views should both stimulate and provoke the general economist. Those interested in the history of economic theory, and/or those having a specialized interest in political economy, should find this work of particular interest.

References

1. L. E. Johnson, "Professor Arrow's Ricardo." Journal of the History of Economic Thought, Spring, 1993, 54-71.

2. -----, "The Source of Value and Ricardo: An Historical Reconstruction." Atlantic Economic Journal, December 1992, 21-31.

3. -----. "Ricardo's Labor Theory of the Determinant of Value," in Pioneers in Economics, Volume II, edited by Mark Blaug. London: Edward Elgar Publishing Limited, 1991.

4. -----, "The Legacy of Ricardo: A Review Article." Rivista Internazionale De Scienze Economiche E Commerciali (International Review of Economics and Business), August 1988, 781-96.

5. -----, "Ricardo's Labor Theory of the Determinant of Value." Atlantic Economic Journal, March 1984, 50-59.

6. -----, "Economic Paradigms: A Missing Dimension." Journal of Economic Issues, December 1983, 1097-111.

7. -----, "A Neo-Paradigmatic Model for Studying the Development of Economic Reasoning." Atlantic Economic Journal, December 1980, 52-61.

8. -----, W. S. Gramm, and David J. Hoaas. "The Falling Rate of Profit Debate in Marx: Alternative Lines of Interpretation," in Marx and Modern Economic Analysis, Volume II, edited by Giovanni A. Caravale. London: Edward Elgar Publishing Limited, 1991.

9. -----, "Marx's Law of Profit: The Current State of the Controversy," (with Warren S. Gramm and David J. Hoaas). Atlantic Economic Journal, December 1989, 55-62.

10. -----, and Robert D. Ley. Origins of Modern Economics: A Paradigmatic Approach. Lexington, Massachusetts: Ginn Press, 1988.

L. E. Johnson Bemidji State University