excerpt of the Annotated bibliography for What is Political economy?
One of the main initiatives of the Political Economy Project (PEP) is the annotated bibliography project, which is designed to complement PEP’s other pedagogy resources, and which will be disseminated through the network and published online for others to use. The project seeks to compile and annotate key political economy texts and classify them in ways that are easily accessible and useful to both scholars and educators. The texts range from classic and seminal texts to historical case studies, to contemporary political economy analysis within the Middle East. The selections we have included here are a sub-set of the total number of annotations completed so far. In the first section, we selected a few citations from the essays included in the volume that we thought were representative of that essay in some way. The second section contains suggestions that were submitted by PEP network members. In both cases, we could not include all the excellent citations that the annotated bibliography now contains. The development of the annotated bibliography is being overseen by Kareem Rabie, Max Ajl, and Omar S. Dahi. We owe a special thanks to Raymond Caraher and Tomer Stern who spent many hours annotating most of the citations you read below and many others not included.
Section 1: Selected Annotations from Essays
Submitter: Omar Dahi
Hyman P. Minsky, “The financial instability hypothesis: an interpretation of Keynes and an alternative to “standard” theory,” Challenge: The Magazine of Economic Affairs 20, no.1 (1977), 20–27.
In this piece, Minsky constructs a theory for a “financially sophisticated” capitalist economy which shows why such an economy is inherently unstable. By focusing on an interpretation of Keynes derived from a rebuttal of his “classical” critics, Minsky demonstrates that his theory is both consistent with the General Theory, as well as better suited to explain our economy than the “standard” theory of the neoclassical synthesis. Instead of focusing on the rational, utility maximizing individuals of the “village fair paradigm,” Minsky puts uncertainty of the future at the heart of his analysis. This radical—but realistic—uncertainty coupled with increasingly risky debt-financing makes stable growth impossible. During boom times, “a period in which the economy is doing well, views about acceptable debt structure change. In the deal-making that goes on between banks, investment bankers, and businessmen, the acceptable amount of debt to use in financing various types of activity and positions increases.” This in turn inspires further investment and riskier debt-structures. This pro-cyclical momentum represents the tendency of the financially advanced capitalist economy to transform a period of “doing well” into a “speculative investment boom,” bound to bring an economy to the brink of crisis. After suggesting that this systemic financial instability debunks the validity of the neoclassical synthesis, Minsky concludes that it is up to policy makers to constrain speculative finance in order to establish a “good financial society.”
Raul Prebisch, “Commercial Policy in the Underdeveloped Countries,” American Economic Review 49, no.2 (1959), 251.
This essay is a response to the standard argument for commercial policy in Latin America. Prebisch summarizes the conventional narrative as being “let the peripheral countries increase productivity in their primary activities through much-needed technical progress and thus expand their exports. Their rate of development will then be accelerated on sound basis.” However, Prebisch argues, policies adopting this framework will never allow the underdeveloped world to bridge the income gap with the core countries for two main reasons. First, technical progress in primary commodity production will not generate enough employment within the underdeveloped world. Secondly, the income elasticity of demand for underdeveloped countries’ primary commodities are consistently lower than for Northern manufactures. Thus, Prebisch argues, import substitution—defined as the “increase in the proportion of goods that is supplied from domestic sources”—provides the only mechanism through which disparities in foreign trade elasticities can be corrected. The author then justifies this policy on theoretical grounds, addressing critics of this policy, as well as outlining the main mechanisms through which it could generate development.
Stephen A. Marglin, “What Do Bosses Do? The Origins and Functions of Hierarchy in Capitalist Production,” Review of Radical Political Economics 6, no. 2 (1974), 60–112.
Is hierarchical authority a necessity dictated by our level of technological advancement, or is it produced, reproduced, and legitimized by our social and economic institutions? Marglin argues that if the answer is the former, then “self-expression in work must at best be a luxury reserved for the very few regardless of social and economic organization.” Worker alienation would be unavoidable, as the exogenously determined level of technology would be what imposed the hierarchy. In order to investigate these premises, Marglin discusses the circumstances which gave rise to the boss-worker hierarchy, and thus transferred control of the work process from the actual producer to the capitalist. He argues that the two major movements which deprived workers of their means of production—the development of the “minute division of labor characterized by the putting out system,” and the “development of the centralized organization of the factory system”—were innovations designed to transfer a larger share of the “pie” from workers to capitalists. The “subsequent growth in the size of the pie” obscures the class interests fundamental to innovations in organization. Therefore, Marglin argues, the “social function of hierarchical work organization is not technological efficiency, but accumulation.”
Submitter: Max Ajl
Jonathan Nitzan & Shimshon Bichler, Capital as Power : A Study of Order and Creorder (Milton Park, Abingdon, Oxon; New York, NY: Routledge, 2009).
In a departure from both mainstream economics and Marxist political economy, Nitzan and Bichler present a theory of capital removed from the imagined units of utils or abstract labor. They propose a theory that positions capital as the “symbolic representation of power.” Drawing on Veblen’s distinction between “industry” and “business,” they argue that finance, rather than being “fictitious capital,” is the only form of capital. Thus, “the firm’s expected earnings and their associated risk perceptions represent neither the productivity of the owned artefacts nor the abstract labor socially necessary to produce them, but the power of a corporation’s owners.” Unlike Liberal ideology and Marxist political economy, which views the state and capital as distinct entities, Nitzan and Bichler suggest that the “legal-organizational” entities of the corporation and the institutional networks of the government are “part and parcel of the same encompassing mode of power.” From this point of view, capitalists’ relative earnings represent a process of differential accumulation whereby the size of earnings relative to other capitalists denotes greater relative power. They emphasize that their view of power extends beyond the economy and politics, and acts as “organizational power at large,” encompassing ideology, culture, violence, gender, conflict, and beyond—bringing society under a totalizing “logic of capital.”
Karl Kautsky, The agrarian question: in two volumes (London; Winchester, Mass.: Zwan Publications, 1988).
In this work, Kautsky presents a study on the impact of capital on peasant societies, and the role of peasants in socialist revolution. He emphasizes that peasant production, while not specific to any historical mode of production, must be placed within the framework of capitalist development. Discussing the impact of capital on class within peasant society, Kautsky suggests that the small farms of the peasantry provide a source of labor-power for large capitalist farms, and thus growth in the number of large farms both reduces the supply of labor-power while at the same time increasing the demand for it. This contradiction, according to him, ensures the survival of small farms and the peasantry. This relationship of subservience of the small farms is exacerbated by the highly exploitable nature of the peasants themselves, from whom surplus-value is intensely extracted. However, Kautsky argues that the survivability of the peasant plays little role in the revolution, as technological advancement will eventually render the peasant obsolete—under either capitalism or socialism. In the revolution, the peasantry would either be eliminated or marginalized to the point of numerical and political insignificance. Thus, Kautsky suggests that socialists should waste no time in mobilizing peasants for the revolution; peasants, as a conservative force, could prove to be counter-revolutionary, and even mobilize against the proletariat.
Sandra Halperin, War and social change in modern Europe : the great transformation revisited (Cambridge, UK; New York: Cambridge University Press, 2004).
In a critical re-evaluation of Polanyi’s The Great Transformation, Halperin seeks to explain the changing social order in Europe from the nineteenth century through World War II and how it relates to modern day “globalization.” While Halperin agrees with much of the spirit of The Great Transformation, she argues that Polanyi’s account of European history brushed over hundreds of bloody wars and conflicts: most of them class struggles. What was called the “Hundred Years’ Peace” of seemingly little war between European states was actually marked by incredible conflict, and Polanyi’s failure to recognize this places his analysis within the current of liberal thought that equates high finance with peace. Halperin traces the implications of this omission to argue that because Polanyi ignored the role of these class struggles, he “assigns them no role in shaping the development and operation of the market system and its central institutions,” and thus fails to capture the reality of how societal processes and relationships shape the actions of states. These bloody conflicts were only resolved through the establishment of social democracies and the relative shift of power towards labor in the post-war era, which according to Halperin created relative peace and stability. However, Halperin suggests that this class compromise is now in danger of being usurped at the hands of neoliberal globalization.
Submitter: Joel Beinin
Beshara Doumani, Rediscovering Palestine: Merchants and Peasants in Jabal Nablus, 1700-1900 (Berkeley: University of California Press, 1995).
In an attempt to “write the inhabitants of Palestine into history,” Doumani utilizes local sources such as Islamic court registers and family newspapers to uncover the social histories of the merchants and peasants in Jabal Nablus. This social history is told through the “social lives” of four commodities: textiles, cotton, olive oil, and soap. Referring to the linkages between economic, political, and cultural factors embedded within the production, consumption, and exchange of these commodities, the author emphasizes how the “stories” behind these commodities illuminates the political economy of both the regional urban-rural relation and the larger political economy of the Ottoman Empire. The trade networks created through the production and transportation of these goods connected Nablus with Egypt, Beirut, Damascus, and its surrounding rural regions. These networks, Doumani argues, allowed Jabal Nablus to be fused “into a single fabric and its inhabitants into a single social formation.” Focusing on different time periods for each commodity, Doumani sheds light upon the “convoluted journey of Jabal Nablus from a semi-autonomous existence under the umbrella of Ottoman rule” to a region deeply integrated and interconnected locally, regionally, imperially, and internationally under the capitalist world economy. Without knowledge of the social and economic relationships under Ottoman rule, Doumani argues that current Palestinian political identity cannot be adequately understood.
Joel Beinin, Workers and peasants in the modern Middle East (Cambridge, UK; New York: Cambridge University Press, 2001).
In this subaltern history of the Middle East, which Beinin defines as the area formerly ruled by the Ottoman Empire, a narrative concerned with of the majority of the population—namely, working class and peasantry—is advanced. Tracing the conditions of these classes from the eighteenth century, the author suggests that the workers and peasants constrained—or in certain cases, enhanced—the “power of state builders, entrepreneurs, and elite intellectuals as production processes, consumption patterns, political and social institutions, associational patterns, gender relations, public and private practices, experiences, and consciousnesses were transformed.” After starting his discussion with the peasantry as the Ottoman Empire attempted to cope with increasing global pressures in the eighteenth and nineteenth century, Beinin then examines the Tanzimat reforms of the Ottoman Empire: how they affected the common people, and how the interference of European powers extinguished the coexistence between religious sects in the region. The rise of class consciousness and working-class mobilization in the twentieth century is also analyzed, particularly with regards to the nationalist movements and that elites that sought to employ, and as Beinin suggests, subvert and subordinate the interests of the working class.
Joel Beinin & Zachary Lockman, Workers on the Nile: nationalism, communism, Islam, and the Egyptian working class, 1882-1954 (Princeton, NJ: Princeton University Press, 1987).
Drawing from the records of workers themselves, Beinin and Lockman provide a sweeping account of Egyptian labor history from the end of the nineteenth century to the regime of Nasir. They are particularly concerned with the “dialectic of class and nation,” or the forms of consciousness and actions taken by workers within the context of foreign domination and the “struggle for national independence.” Placing Egypt within the context of dependent capitalist development, the authors seek to uncover the barriers to class-based organization and the extent to which they were overcome. Given the uneven development amongst Egypt’s industries, class-consciousness and labor organizing remained concentrated in a handful of large sectors: specifically, those tied to the cotton industry, such as transport workers before the World War II and textile workers afterwards. The authors trace the rise of working class movements and the different political organizations that sought their support, arguing that their objectives were hampered in the 1950s through a “historical compromise” that ended with a capitulation of the workers movement to the paternalistic states’ economic benefits. Instead of continued mobilization, the workers movement was absorbed into the state in a corporatist manner under the banner of “Arab socialism.” The authors argue that while recognizing the legitimacy of class, Arab socialism restricted the autonomy of the workers, forcing them into a position of subordinance and quiescence within the Nasirist state.
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Section 1: Selected Annotations from Essays
Submitter: Omar Dahi
Hyman P. Minsky, “The financial instability hypothesis: an interpretation of Keynes and an alternative to “standard” theory,” Challenge: The Magazine of Economic Affairs 20, no.1 (1977), 20–27.
In this piece, Minsky constructs a theory for a “financially sophisticated” capitalist economy which shows why such an economy is inherently unstable. By focusing on an interpretation of Keynes derived from a rebuttal of his “classical” critics, Minsky demonstrates that his theory is both consistent with the General Theory, as well as better suited to explain our economy than the “standard” theory of the neoclassical synthesis. Instead of focusing on the rational, utility maximizing individuals of the “village fair paradigm,” Minsky puts uncertainty of the future at the heart of his analysis. This radical—but realistic—uncertainty coupled with increasingly risky debt-financing makes stable growth impossible. During boom times, “a period in which the economy is doing well, views about acceptable debt structure change. In the deal-making that goes on between banks, investment bankers, and businessmen, the acceptable amount of debt to use in financing various types of activity and positions increases.” This in turn inspires further investment and riskier debt-structures. This pro-cyclical momentum represents the tendency of the financially advanced capitalist economy to transform a period of “doing well” into a “speculative investment boom,” bound to bring an economy to the brink of crisis. After suggesting that this systemic financial instability debunks the validity of the neoclassical synthesis, Minsky concludes that it is up to policy makers to constrain speculative finance in order to establish a “good financial society.”
Raul Prebisch, “Commercial Policy in the Underdeveloped Countries,” American Economic Review 49, no.2 (1959), 251.
This essay is a response to the standard argument for commercial policy in Latin America. Prebisch summarizes the conventional narrative as being “let the peripheral countries increase productivity in their primary activities through much-needed technical progress and thus expand their exports. Their rate of development will then be accelerated on sound basis.” However, Prebisch argues, policies adopting this framework will never allow the underdeveloped world to bridge the income gap with the core countries for two main reasons. First, technical progress in primary commodity production will not generate enough employment within the underdeveloped world. Secondly, the income elasticity of demand for underdeveloped countries’ primary commodities are consistently lower than for Northern manufactures. Thus, Prebisch argues, import substitution—defined as the “increase in the proportion of goods that is supplied from domestic sources”—provides the only mechanism through which disparities in foreign trade elasticities can be corrected. The author then justifies this policy on theoretical grounds, addressing critics of this policy, as well as outlining the main mechanisms through which it could generate development.
Stephen A. Marglin, “What Do Bosses Do? The Origins and Functions of Hierarchy in Capitalist Production,” Review of Radical Political Economics 6, no. 2 (1974), 60–112.
Is hierarchical authority a necessity dictated by our level of technological advancement, or is it produced, reproduced, and legitimized by our social and economic institutions? Marglin argues that if the answer is the former, then “self-expression in work must at best be a luxury reserved for the very few regardless of social and economic organization.” Worker alienation would be unavoidable, as the exogenously determined level of technology would be what imposed the hierarchy. In order to investigate these premises, Marglin discusses the circumstances which gave rise to the boss-worker hierarchy, and thus transferred control of the work process from the actual producer to the capitalist. He argues that the two major movements which deprived workers of their means of production—the development of the “minute division of labor characterized by the putting out system,” and the “development of the centralized organization of the factory system”—were innovations designed to transfer a larger share of the “pie” from workers to capitalists. The “subsequent growth in the size of the pie” obscures the class interests fundamental to innovations in organization. Therefore, Marglin argues, the “social function of hierarchical work organization is not technological efficiency, but accumulation.”
Submitter: Max Ajl
Jonathan Nitzan & Shimshon Bichler, Capital as Power : A Study of Order and Creorder (Milton Park, Abingdon, Oxon; New York, NY: Routledge, 2009).
In a departure from both mainstream economics and Marxist political economy, Nitzan and Bichler present a theory of capital removed from the imagined units of utils or abstract labor. They propose a theory that positions capital as the “symbolic representation of power.” Drawing on Veblen’s distinction between “industry” and “business,” they argue that finance, rather than being “fictitious capital,” is the only form of capital. Thus, “the firm’s expected earnings and their associated risk perceptions represent neither the productivity of the owned artefacts nor the abstract labor socially necessary to produce them, but the power of a corporation’s owners.” Unlike Liberal ideology and Marxist political economy, which views the state and capital as distinct entities, Nitzan and Bichler suggest that the “legal-organizational” entities of the corporation and the institutional networks of the government are “part and parcel of the same encompassing mode of power.” From this point of view, capitalists’ relative earnings represent a process of differential accumulation whereby the size of earnings relative to other capitalists denotes greater relative power. They emphasize that their view of power extends beyond the economy and politics, and acts as “organizational power at large,” encompassing ideology, culture, violence, gender, conflict, and beyond—bringing society under a totalizing “logic of capital.”
Karl Kautsky, The agrarian question: in two volumes (London; Winchester, Mass.: Zwan Publications, 1988).
In this work, Kautsky presents a study on the impact of capital on peasant societies, and the role of peasants in socialist revolution. He emphasizes that peasant production, while not specific to any historical mode of production, must be placed within the framework of capitalist development. Discussing the impact of capital on class within peasant society, Kautsky suggests that the small farms of the peasantry provide a source of labor-power for large capitalist farms, and thus growth in the number of large farms both reduces the supply of labor-power while at the same time increasing the demand for it. This contradiction, according to him, ensures the survival of small farms and the peasantry. This relationship of subservience of the small farms is exacerbated by the highly exploitable nature of the peasants themselves, from whom surplus-value is intensely extracted. However, Kautsky argues that the survivability of the peasant plays little role in the revolution, as technological advancement will eventually render the peasant obsolete—under either capitalism or socialism. In the revolution, the peasantry would either be eliminated or marginalized to the point of numerical and political insignificance. Thus, Kautsky suggests that socialists should waste no time in mobilizing peasants for the revolution; peasants, as a conservative force, could prove to be counter-revolutionary, and even mobilize against the proletariat.
Sandra Halperin, War and social change in modern Europe : the great transformation revisited (Cambridge, UK; New York: Cambridge University Press, 2004).
In a critical re-evaluation of Polanyi’s The Great Transformation, Halperin seeks to explain the changing social order in Europe from the nineteenth century through World War II and how it relates to modern day “globalization.” While Halperin agrees with much of the spirit of The Great Transformation, she argues that Polanyi’s account of European history brushed over hundreds of bloody wars and conflicts: most of them class struggles. What was called the “Hundred Years’ Peace” of seemingly little war between European states was actually marked by incredible conflict, and Polanyi’s failure to recognize this places his analysis within the current of liberal thought that equates high finance with peace. Halperin traces the implications of this omission to argue that because Polanyi ignored the role of these class struggles, he “assigns them no role in shaping the development and operation of the market system and its central institutions,” and thus fails to capture the reality of how societal processes and relationships shape the actions of states. These bloody conflicts were only resolved through the establishment of social democracies and the relative shift of power towards labor in the post-war era, which according to Halperin created relative peace and stability. However, Halperin suggests that this class compromise is now in danger of being usurped at the hands of neoliberal globalization.
Submitter: Joel Beinin
Beshara Doumani, Rediscovering Palestine: Merchants and Peasants in Jabal Nablus, 1700-1900 (Berkeley: University of California Press, 1995).
In an attempt to “write the inhabitants of Palestine into history,” Doumani utilizes local sources such as Islamic court registers and family newspapers to uncover the social histories of the merchants and peasants in Jabal Nablus. This social history is told through the “social lives” of four commodities: textiles, cotton, olive oil, and soap. Referring to the linkages between economic, political, and cultural factors embedded within the production, consumption, and exchange of these commodities, the author emphasizes how the “stories” behind these commodities illuminates the political economy of both the regional urban-rural relation and the larger political economy of the Ottoman Empire. The trade networks created through the production and transportation of these goods connected Nablus with Egypt, Beirut, Damascus, and its surrounding rural regions. These networks, Doumani argues, allowed Jabal Nablus to be fused “into a single fabric and its inhabitants into a single social formation.” Focusing on different time periods for each commodity, Doumani sheds light upon the “convoluted journey of Jabal Nablus from a semi-autonomous existence under the umbrella of Ottoman rule” to a region deeply integrated and interconnected locally, regionally, imperially, and internationally under the capitalist world economy. Without knowledge of the social and economic relationships under Ottoman rule, Doumani argues that current Palestinian political identity cannot be adequately understood.
Joel Beinin, Workers and peasants in the modern Middle East (Cambridge, UK; New York: Cambridge University Press, 2001).
In this subaltern history of the Middle East, which Beinin defines as the area formerly ruled by the Ottoman Empire, a narrative concerned with of the majority of the population—namely, working class and peasantry—is advanced. Tracing the conditions of these classes from the eighteenth century, the author suggests that the workers and peasants constrained—or in certain cases, enhanced—the “power of state builders, entrepreneurs, and elite intellectuals as production processes, consumption patterns, political and social institutions, associational patterns, gender relations, public and private practices, experiences, and consciousnesses were transformed.” After starting his discussion with the peasantry as the Ottoman Empire attempted to cope with increasing global pressures in the eighteenth and nineteenth century, Beinin then examines the Tanzimat reforms of the Ottoman Empire: how they affected the common people, and how the interference of European powers extinguished the coexistence between religious sects in the region. The rise of class consciousness and working-class mobilization in the twentieth century is also analyzed, particularly with regards to the nationalist movements and that elites that sought to employ, and as Beinin suggests, subvert and subordinate the interests of the working class.
Joel Beinin & Zachary Lockman, Workers on the Nile: nationalism, communism, Islam, and the Egyptian working class, 1882-1954 (Princeton, NJ: Princeton University Press, 1987).
Drawing from the records of workers themselves, Beinin and Lockman provide a sweeping account of Egyptian labor history from the end of the nineteenth century to the regime of Nasir. They are particularly concerned with the “dialectic of class and nation,” or the forms of consciousness and actions taken by workers within the context of foreign domination and the “struggle for national independence.” Placing Egypt within the context of dependent capitalist development, the authors seek to uncover the barriers to class-based organization and the extent to which they were overcome. Given the uneven development amongst Egypt’s industries, class-consciousness and labor organizing remained concentrated in a handful of large sectors: specifically, those tied to the cotton industry, such as transport workers before the World War II and textile workers afterwards. The authors trace the rise of working class movements and the different political organizations that sought their support, arguing that their objectives were hampered in the 1950s through a “historical compromise” that ended with a capitulation of the workers movement to the paternalistic states’ economic benefits. Instead of continued mobilization, the workers movement was absorbed into the state in a corporatist manner under the banner of “Arab socialism.” The authors argue that while recognizing the legitimacy of class, Arab socialism restricted the autonomy of the workers, forcing them into a position of subordinance and quiescence within the Nasirist state.
[See more inside...]
