Economics and Utopia: Why the learning economy is not the end of history
Clarke, Pete
Geoffrey M. Hodgson
Economics and Utopia: Why the learning economy is not the end of history
Routledge, St. Ives, 1999, pp.337. ISBN 0-415-07506-8 (hbk) 55.00 ISBN 0-415-19685-X (pbk) 17.99 This is a book that deserves to be widely read, and should be by anybody with an interest in the discipline of economics. It is an ambitious work that seeks to question the current state and direction of the subject, and raises questions which the current mainstream of economics does not even consider. In some ways it is a return to topics that have been the concern of economists in the past, but it is a book that is very much concerned with the future. It challenges the Fukuyama `End of History hypothesis and suggests economies are not static but dynamic. History then, does not end. Hodgson is concerned with the processes of change, and considers future possible social organisation.
The main theme of the book is that the `desired utopias of both the traditional left and of the neo-liberal right are unfeasible’ (p.9). The claim is that both of them fail to understand the role of knowledge and learning in a modern economy. `History has no pre-ordained path’ (p.10) and there are a number of directions in which evolution could take capitalism. So, Hodgson does suggest that capitalism will evolve into something else and then goes on to explore the possibilities.
Clearly mainstream economics with its equilibrium analysis cannot analyse dynamic change. The starting point for this book is Marx, and the preface to the book states, `Capital remains one of the greatest achievements in economic theory since Adam Smith’ (p.xviii). However, although influenced by Marx, this is an institutionalist rather than a Marxist analysis. The ambitious aim is to transcend Marx. Clearly this aim will not appeal to the committed Marxist, but even they should find the book challenging and thought provoking.
The book is split into three parts. Parts one and two are a critique of the traditional approaches of both left and right, and an introduction to institutional economics. In part three possible future directions are considered. The left will find much more to agree with than the right, but a major point of disagreement is likely to be the definition of socialism that is used. Hodgson sees ‘traditional’ socialism as being synonymous with central planning, which is perhaps questionable, especially in a book entitled Economics and Utopia. It seems to confuse a method of attempting to achieve a socialist utopia with the vision of that utopia. The writer does quote Polanyi in the book and so he must be aware of his more elegant definition of socialism as a system that seeks the primary of the social system over the economic system, rather than vice versa, as occurs under capitalism. However, equating socialism with central planning does make it an easier target.
It is the attempt to transcend Marx though, that is particularly interesting. The analysis has much in common with that of Marx, but departs from it in two important ways. The first is concerned with Marx’s belief that `commodity and market relations could grow to the eventual exclusion of all non-capitalist features’ (p.147). Hodgson argues that no pure socio-economic system can ever exist. There are, in this analysis, different types of capitalism because different ‘impurities’ existed in the different precapitalist societies. It further argues that the existence of non-capitalist structures within capitalism is a functional necessity. So, for example, will the family ever come to be dominated by market relations? For Marx this would be the case, but for Hodgson such areas that are outside of such relations will and must exist for the continuation of capitalism. If capitalism does destroy such non-market relationships, then it destroys itself. Hodgson suggests that they will always exist, and `some degree of variety will always be with us’ (p. 147). In defence of Marx though, the fact that they currently do exist does not mean that they always will. We do seem to have experienced over the last 20 years or so, the extension of market relationships into areas where they did not previously exist. It would also seem that the Marxist would have no problem with the notion that capitalism will destroy the very thing that its existence relies upon. For Hodgson though, the differences will also exist in whatever comes after capitalism.
The second way in which this work differs from Marx is concerned with what does replace capitalism, as Hodgson does believe that something else will evolve. In a section provocatively entitled `Where Marx Got it Wrong’ (p.184), he suggests that the growing complexity of the socioeconomic system, and the need for knowledge based skills, will lessen the power of capital over labour. The more skill is required, the argument runs, the more independent the worker becomes. The effect of this will, for Hodgson, lead to the end of capitalism as it changes the capital/labour relationship. It is seen as leading to the end of employer/employee relationships and their replacement with the situation where `the degree of control of the work process by the employer becomes closer to that of a contract for services’ (p.219), which effectively means that the worker is now self-employed and has control over their own working lives. This is a direct denial of the de-skilling hypothesis of Braverman, for which Hodgson argues there is no empirical evidence. Crucially though, we cannot determine the outcome of this process, and a number of possible scenarios are discussed. One of these does correspond with traditional Marxism, but this is seen as only one possibility.
There is much to like about this book. It is well argued, stimulating and thought provoking, and deserves to be widely read. The political right will find little to their liking but there is much here for the left. It is an optimistic work. Ultimately though, this may actually be its weakness. It concludes with the comment, `Once we realise that we are not at the end of history then we can begin, with eyes open, the task of making it’ (p.262). That may well be the case, but will it be of our own choosing?
Pete Clarke is a lecturer in Economics at the University of Lincolnshire and Humberside, Lincoln.
Copyright Conference of Socialist Economists Autumn 2000
Provided by ProQuest Information and Learning Company. All rights Reserved
