Understanding Capitalism: Competition, Command, and Change / Edition 3

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Understanding Capitalism: Competition, Command, and Change, Third Edition, is an introduction to economics that explains how capitalism works, why it sometimes does not work as well as we would like it to, and how over time it not only changes but also revolutionizes the world around us. The "three-dimensional approach" of the text focuses on competition in markets; command in firms, governments, and international relations; and change as a permanent feature of a capitalist economy driven by technical innovation and conflict over the distribution of income.

The book covers the standard topics of supply and demand, market competition, imperfect competition, aggregate demand, inflation, and unemployment. It emphasizes the extraordinary dynamism and material productivity of the capitalist economy; the psychological foundations of human behavior; the logic and limitations of Adam Smith's invisible hand; technical change and the new information-based economy; global economic integration and its impact on national economies; the impact of economic activity on the environment; and inequality both within and among nations. In addition, it provides a critical evaluation of the tenets of neoclassical economics, a clear introduction to contract theory, and material drawn from new research in behavioral, institutional, and information economics.

Understanding Capitalism, Third Edition, is ideal for undergraduate courses in economics and political economy. An Instructor's Manual is available to adopters.


·Offers a new chapter on the behavioral foundations of economics, showing that the selfishness of the "economic man" leaves out the important role of other social motives and how individual tastes and values evolve in response to experiences

·Includes a new chapter that examines how economic success (and poverty) are passed on from parents to children and also looks at the increasing inequality of income and wealth along lines of race and gender

·Presents a completely revised and expanded treatment of the revolutionary changes that have been associated with capitalism over the past three centuries

·Provides boxed treatments of issues that can serve as the basis of classroom discussions

·Defines important terms in the margins throughout the text

·Contains a section entitled "Sources of Economic Information" that helps readers locate relevant outside data, both in print and online

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Product Details

  • ISBN-13: 9780195138658
  • Publisher: Oxford University Press
  • Publication date: 3/10/2005
  • Edition description: New Edition
  • Edition number: 3
  • Pages: 608
  • Sales rank: 99,015
  • Product dimensions: 9.00 (w) x 7.30 (h) x 1.30 (d)

Meet the Author

Samuel Bowles is Research Professor at the Santa Fe Institute, U.S.A., and Professor of Economics at the University of Siena, Italy.

Richard Edwards is Professor of Economics at the University of Nebraska-Lincoln.

Frank Roosevelt is Professor of Economics at Sarah Lawrence College.

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Table of Contents

List of Figures
Sources of Economic Information
1. Capitalism Shakes the World
The Permanent Technological Revolution
The Enrichment of Material Life
Growing Inequality
The Population Explosion and the Growth of Cities
The Changing Nature of Work
The Transformation of the Family
Threats to the Ecosystem
New Roles for Government
2. People, Preferences, and Society
Constraints, Preferences, and Beliefs
'Economic Man' Reconsidered
Human Nature and Cultural Differences
The Economy Produces People
Conclusion: The Cooperative Species
3. A Three-Dimensional Approach to Economics
Economic Systems and Capitalism
Three-Dimensional Economics
Neoclassical Economics
Values in Political Economy
4. Political Economy, Past and Present
Adam Smith
Karl Marx
Joseph Schumpeter
John Maynard Keynes
Ronald Coase
Amartya Sen
5. The Surplus Product: Conflict and Change
Economic Interdependence, Production, and Reproduction
The Surplus Product
A Grain Model of Production and Reproduction
International Exchange and the Surplus Product
The Surplus Product and Conflict
The Surplus Product and Change
6. Capitalism as an Economic System
Class and Class Relationships
Classes and Economic Systems
Capitalism, the Surplus Product, and Profits
7. American Capitalism: Accumulation and Change
Accumulation as a Source of Change
Capitalism Becomes the Dominant Economic System in the United States
Social Structures of Accumulation
The Stages of American Capitalism
American Capitalism Today: Economic Dualism
American Capitalism Today: Globalism
8. Supply and Demand: How Markets Work
The Nature of Markets
Supply and Demand
Supply and Demand Interacting
Shifts in Demand or Supply
9. Competition and Coordination: The Invisible Hand
Coordination by Rules and by Command
The Invisible Hand
The Invisible Hand in Action
Problems with the Invisible Hand
10. Capitalist Production and Profits
What Are Profits?
Calculating the Rate of Profit
The Determinants of the Profit Rate
The Rate of Profit per Worker Hour
The Labor Determinants of the Profit Rate
Materials and Capital Goods as Profit Rate Determinants
The Role of Capital Goods (Again)
Conclusion: Understanding the Profit Rate
11. Competition and Concentration
Competition for Profits
The Forms of Competition
Investing to Compete
The Dynamics of Competition
Toward Equal Profit Rates?
Toward Economic Concentration?
12. Wages and Work
Work, Sloth, and Social Organization
The Capitalist Firm As a Command Economy
The Conflict Between Workers and Employers
Labor Discipline: Carrots and Sticks
The Labor Market, the Wage, and the Intensity of Labor
13. Technology, Control, and Conflict in the Workplace
The Social Organization of the Workplace
Technology and the Labor Process
Conflict in the Workplace
Profitability Versus Efficiency
Markets and Hierarchies
Democratic Firms
14. The Mosaic of Inequality
Measuring Well-Being and Inequality
Growing Inequality
Wealth Inequality
Unequal Chances
Race and Inequality
Women's Work, Women's Wages
Conclusion: Explaining the Mosaic of Inequality
15. Progress and Poverty on a World Scale
Poverty and Progress
Productivity and Income
Productivity, Incentives, and the Surplus Product
Capitalism and Uneven Development
Government and the Development Process
Investment and Production on a World Scale
16. Aggregate Demand, Employment, and Unemployment
Aggregate Supply and Aggregate Demand
Unemployment and Government Fiscal Policy
The Business Cycle and the Built-in Stabilizers
Investment, Aggregate Demand, and Monetary Policy
Wages, Aggregate Demand, and Unemployment
17. The Dilemmas of Macroeconomic Policy
The High-Employment Profit Squeeze
Exports, Imports and Aggregate Demand
International Trade and Macroeconomic Policy
Monetary and Fiscal Policy at Odds
Institutions for Achieving Full Employment
18. Inflation
Two Types of Inflation
Why Worry About Inflation?
19. Government and the Economy
The Rules of Government Organization
The Economic Activities of the Government
The Expansion of Government Economic Activity
Government and the Profit Rate
The Limits of Democratic Control of the Capitalist Economy
20. The Future of Capitalism
The Limits to Growth
The Weightless Economy: From Grain and Steel to Information and Ideas
The New Economy
Can the Invisible Hand Tame Fugitive Resources?
List of Variables

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