Book Review from the May 2001 issue of the Socialist Standard
Capitalism and Its Economics: A Critical History. By Douglas Dowd. Pluto Press, 2000.
Douglas Dowd is a radical American political economist who has written extensively about both the development of modern capitalism and its shortcomings. This, his latest book, presents a radical critique of the capitalist system and of the economists who have sought to understand it over the last two centuries and more. Dowd uses some of the analytical tools of Marxism to pursue his critique but in other respects he more closely occupies the territory of left-Keynesianism than Marxism, being something of an acolyte of the late Joan Robinson, who was a key figure in the post-war "Cambridge School" of economics combining Marxian phrases and concepts with a radical Keynesian and interventionist outlook.
Because of this there is a sense that Dowd's radical critique has been refracted too much through the distorting prism provided by Robinson and other writers like Paul Baran. Some of Marx`s key concepts which would have served him well enough-on matters such as inflation, credit and taxation-have been superseded by a more Keynesian framework of analysis to which economic history has, frankly, been rather less kind.
To the extent that he does utilise Marx and the Marxian critique of political economy there can be little doubt that Dowd is at his best as a cogent critic of "conventional" economics and he does a particularly good job exposing some of the ridiculous assumptions bequeathed to the latter-day practictioners of the dismal science. In this sense his book can be seen as a useful companion to Paul Ormerod`s insightful work, The Death of Economics, from 1994.
One of the best sections of the book sees Dowd describing what he calls "The New World Order [of] Globalization and Financialization" and the "Decadent Economics" associated with it. This really is a tour de force through the recent history of the global economy with its heightened concentration of capital, massive trans-national corporations and US economic (and cultural) hegemony. But well-written as this particular section is, it is Dowd`s general preoccupation with the economic history of global capitalism which paradoxically causes the text as a whole to lose some of its focus. Sometimes political economy and economic theory are lost in a potted History of the World-type discourse with large swathes of text on phenomena such as the rise to power of the fascist parties and on the Second World War. This is a shame, for what could have been a useful adjunct to a critique of the economists becomes instead the main focus of attention-and there are already more than enough books about with this type of theme.
Despite this particular shortcoming there is no denying that Dowd is an entertaining enough writer and all things considered there is probably more here for socialists to agree with than to excoriate him for. His analysis of the state of the world economy at present is especially praiseworthy and is prescient indeed given the recent turmoil on the financial markets. In addition, his concern for the wider environmental damage that the market economy is doing to the planet is both justified and relevant. The only great problem with all this-and he is not alone here-lies in his lack of a coherent answer to the apparently insurmountable problems the capitalist economy creates. He calls for a lessening of global inequalities and for "a movement toward economic, political and social democracy" but his readings of Marx should have told him that there can be no such thing if the dictates of the profit system are allowed to hold sway. Unfortunately, when it comes to tackling the problems that capitalism creates, Keynes and Robinson obviously carry more weight in his mind than does Marx, and the solutions he hints at amount, unfortunately, to little more than their own failed suggestions from the last century.