Economics for Everyone: A Short Guide to the Economics of Capitalism

Abstract

Economics for Everyone: A Short Guide to the Economics of Capitalism Jim Stanford Pluto Press, London, 2008, pp. 350, RRP $42.00 Economics for Everyone is an important new offering by Jim Stanford a progressive economist who works for the Canadian Auto Workers union. Amongst the plethora of academic texts concerning political economy, Economics for Everyone is notable for its general use of accessible language. Also commendable is the book's systemic treatment of economic issues of concern to ordinary workers, activists, and citizens. Jim Stanford's book addresses essential questions. In whose interests does the economic system work? What is the personal role and stake of workers and capitalists in the system? What are the values and assumptions underlying the system? Can we trust the expertise of professional economists who are the high priests of competition, deregulation and privatisation? Stanford observes that most economists 'fully believe that competition, inequality, economic advantage and the accumulation of private wealth are central, natural and desirable features of a vibrant, efficient economy' (p 3). Ideology, however, infuses their arguments. As he argues, 'the elitism of economics disempowers and silences the voices of non-experts'. The 'opinion makers' imply that people who question neoliberal orthodoxies such as free trade 'must either be acting from ignorance, or else are pursuing some narrow vested interest' (p 2). This is what Stanford sets out to challenge. The process of empowerment begins with becoming aware of our own interests. This awareness then needs to be complemented with an understanding of how the economy works and how (conceivably) it can be transformed. Finally, there is the matter of combining such knowledge with values, so that we might propose a real alternative--argued for on the basis of both common interest and moral right. Capitalism Deconstructed In his preliminary analysis, Stanford portrays a system based on the production and distribution of goods and services. In addition to production for the market, there is the 'domestic' economic sector, comprising household work that does not factor into most measured economic activity, but which is crucial to social reproduction, quality of life and our very survival. To this category may also be added the important area of voluntary work (pp 20-21). Later in the text other aspects are considered: innovation, economic growth driven by the profit dynamic, inequality, class struggle, and cycles of 'boom and bust' (pp 34-35). The foundations laid down by Stanford provide the basis for an analysis that gathers in pace and complexity as the book progresses. He notes that the word 'capitalism' is rarely used in popular discourse. To name the system, and thus identify it as relative to others, is considered 'radical' (p 5). Stanford, however, considers the economy with a historian's eye to 'the long term'. The capitalist system can be understood as arising from the 18th Century onwards, having been preceded by other different modes of production (hunter-gatherer, slavery, feudalism) (pp 40-44). That said, capitalism need not be considered 'timeless' or 'eternal'. What is more, 'pre-capitalist economies also had markets': there is no unique nexus between capitalism and markets. Stanford notes that 'Most forms of socialism...rely on markets to distribute end products and even, in some cases, to organise investment and production' (p 36). This 'flexible' socialism, balancing planning with democratic markets, is a prospective successor to the capitalist system as we know it. Historical Context It is instructive to trace the development of capitalism since its inception in 18th Century Britain. Forced off the land with the development of more efficient agricultural techniques, workers were 'driven into the cities' where they experienced 'intolerable conditions' (e. …