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Manuela Mosca (ed.), Power in Economic Thought

Amitava Krishna Dutt
p. 881-886
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Manuela Mosca (ed.), Power in Economic Thought, London: Palgrave Macmillan, 2018, xi + 393 pages, ISBN 978-331994038-0

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Crédits : Palgrave Macmillan

1As the book Power in Economic Thought is part of a series entitled “Palgrave Studies in the History of Economic Thought”, one would expect it to be about how the concept of power, its sources, and its implications, have been examined in the history of economic thought. The editor, however, makes it clear in her introduction that the book does not present a systematic examination of the notion or theories of power in the history of economic thought, but aims instead at “consider[ing] some significant examples of the way economists of the past have used the concept of power in its different meanings, considering it as pertaining to their realm of inquiry” (7). Since the concept of power and the role of power in the economy are highly complex, it is wise to pursue this limited objective because it can help better understanding power in the economy—a still poorly understood theme, despite the attention given to it by both mainstream and especially heterodox economists. The brief and well-written introduction helps the reader go down this road with a useful review of the treatment of power in the economy.

2In addition to the introduction, the book contains twelve papers presented at a 2016 conference on economics and power from a historical perspective. They are four parts containing three papers each. This organization in itself is an editorial feat since most conference papers are very difficult to put together into a coherent volume, as different authors typically march to different beats. The four parts are concerned, respectively, with the power of the state, focusing on the opposition between state authoritarian power and private market freedom; asymmetries of power within society or the economy, examining how power affects income and wealth distribution and social legislation and policy; market power and power in other institutions in terms of theory and policy; and the ideas of some specific economists on policy-making in relation to their views on power. The introduction states that this organization reflects the different themes of the papers published in the three leading economics journals in the last twenty years with the word “power” used (in the relevant sense) in their titles. While this method of grouping the texts is ingenious, it is also potentially problematic because only mainstream journals are considered. As noted in the introduction of the book and many other studies, there has been a tendency in mainstream or neoclassical economics (rooted in marginalist analysis involving optimizing agents who are atomistic insofar as they operate under perfectly competitive market conditions) to neglect power altogether, or to understand it as arising only from market distortions.

3In essence, the book can be judged on how much its chapters contribute to a better understanding of power in the economy and society. In addition to the introduction, several of the chapters substantially improve on our current understanding, namely those by Bruna Ingrao, Manuela Mosca and Eugenio Somaini, Heinz Kurz, and Raphaël Fèvre.

4Ingrao starts with a general definition of power and focuses on the arbitrary and capricious use of it by an authoritarian state, which is likely to have adverse effects on the freedom and wellbeing of the members of society. The chapter provides a broad-ranging and insightful examination of writing on power (and its absence) in economics and beyond. It reviews the ideas of Hobbes, the Enlightenment philosophers and economists including Smith, Cournot, Walras (whose model of perfectly competitive markets ignored power), Arendt, Canetti, Schumpeter, Hayek, and some recent development economists. Although the paper recognizes the importance of the power of elites in society and acknowledges that political power and economic interests mingle even in market democracies, these themes are given short shrift in this paper because of its emphasis on state power.

5Mosca and Somaini provide an overview of the ideas of Italian marginalists on power and democracy during the period 1882-1924. The authors’ discussion reveals how Maffeo Pantaleoni, for instance, eulogized the role of the small, educated and ‘civilized’ elite in making societies flourish (with coercion if necessary). Vilfredo Pareto was concerned about the possibility that such elites would abuse their power, but argued that social mobility due to the circulation of the elites would overcome the problem. This well-organized and insightful paper shows that Pantaleoni and Pareto were suspicious of democracy because they believed that it would lead to decision-making by the less educated and less intelligent (lower-income) classes and to a greater centralization of authority due to demagoguery. (The latter belief seems prescient of today’s world.) However, the authors could have done more to highlight the elitism of some of these writers based on their class interests and their blind opposition to all socialist ideas, and to show that the confluence of democratic and economic problems often is responsible for the rise of authoritarian tendencies and the emergence of nativism and fascism.

6Kurz’s paper on Thomas Hobbes, Adam Smith and David Ricardo provides a brief and interesting discussion of general definitions of power. Kurz proposes, albeit without elaborating, a formalization of the structure of power analogous to Sraffa’s distinction between basic and non-basic goods. He uses the concept of basic agents who—directly or indirectly through other agents—exert some influence on all non-basic agents without being influenced by them. The paper contrasts Hobbes’ from Smith’s views on power. While Hobbes argued that the struggle for power between people led to perpetual conflict and war (which could be overcome only by ceding power to the Leviathan, the absolutist state), Smith questioned the implied view of humans as being devoid of moral virtues and argued that the Leviathan could oppress most of its subjects. Instead, he advocated a socio-economic order in which much of economic life is coordinated by free competitive markets. Nevertheless, Smith accepted some of Hobbes’s views on power, especially on the dependence of power on wealth. Kurz shows how this led Smith to argue that power in society as a whole is asymmetrically distributed among the classes, between which there is little mobility. The power of capitalists over workers is based not only on the ownership of wealth, but also on their consequent access to political power, knowledge and information, and their small numbers by contrast with the multitude of workers. Therefore, wages are kept low unless the growth of the economy—and hence the demand for labor—outstrips the labor supply growth. The comparison between Hobbes and Smith is very insightful, and the paper shifts the focus from the importance of the invisible hand and alleged eulogy of free markets without government intervention—which Kurz (2015) has questioned elsewhere—to Smith’s discussion of the sources and consequences of power of different classes, which anticipates later, especially Marxian, insights.

7Fèvre’s paper, comparing the views of John M. Keynes and Walter Eucken on the problems of capitalism and the role of power in society, shows that both economists advocated a middle ground between laissez-faire and socialism. Keynes recommended discretionary government policies, while Eucken recommended a rule- and institution-based approach, for instance through the establishment of an independent Monopoly Office monitoring monopolies. While Keynes focused on the economic problems of unemployment due to deficient aggregate demand and economic inequality, Eucken emphasized the “social question” related to the economic power of industrial capitalists, due to industrial concentration, with its adverse effects on freedom and justice. Although Eucken is presented as coming out ahead in placing power at the center of his analysis, Fèvre does not recognize that neither Eucken nor Keynes seems to come to grips with how the state can overcome political economy obstacles for the implementation of its policies (an issue that was examined more carefully by Keynes and Eucken’s contemporary, Michal Kalecki, 1943). The chapter also fails to point out that Keynes did not ignore the role of power entirely when he referred to the influence on government policy of the “academic scribbler” and claimed, perhaps with professional overconfidence, that “the power of vested interests is vastly exaggerated compared with the gradual encroachment of ideas” (Keynes, 1936, 383).

8While these contributions are directly related to power, some other interesting papers are concerned with issues regarding power more indirectly. A fascinating paper by Marion Dieudonné recounts the debate on whether business training should be done under the aegis of university academics or business corporations. It explores the views of institutionalist economists, especially Thorstein Veblen, on this issue. We learn that Veblen was strongly in support of control over business education by academics. This is because he believed that education needs to be concerned with promoting critical thought and an understanding of society, rather than vocational training and furthering business and financial interests. Contrary to Veblen’s views, the increasingly powerful business interests prevailed. While the paper focuses on business education, it provides a useful basis for understanding the power of money and the process of corporatization of academia as a way of shaping the content of knowledge by the elites in society through the education system. This illustrates the Foucauldian idea of power-knowledge.

9Another contributor, Stephen Martin, usefully reminds us that the intent of the Sherman Antitrust Act and subsequent US legislation was not—as those less critical of mergers and acquisitions argue—to address the inefficiency of imperfect competition in the narrow sense of increased prices and the resulting dead-weight losses, but to attempt to disperse economic and other kinds of power in private hands. Martin tries to show that a concern for the centralization of power can be demonstrated using a standard model of market in which people have preferences about market structure, so that welfare does not depend only on standard consumer and producer surpluses. However, it is not clear how this analysis helps in understanding issues about power, since anything can be justified by making individual welfare depend upon that thing.

10The other papers, although interesting, deal with power only tangentially; it seems that the editor tried to push the authors to discuss power, with little success. The remaining papers mostly discuss the views of some economists on economic theory, policy and social organization, such as: Francesca Dal Degan on Sismondi’s espousal of the combination of individual liberties and capabilities with a shared social contract or will; Cosma Orsi on Adam Smith’s opposition to the utility of the poor doctrine, and his advocacy for fair wages, public education for the masses, and the Poor Law reform; Joachim De Paoli on the views of French liberal economists on social insurance and pensions; and Mario Pomini on the early contributions of Italian economists to the theory of market power in the narrow sense of price-setting behavior under duopoly. Piero Bini provides an interesting discussion of economic analysis and economic trends in Italy since 1970, but his analysis would have benefited from bringing in international economic and intellectual influences. Emmanuel Blanc and André Tiran provide an illuminating analysis of the ideas of Jean-Baptiste Say on utility, who, in contrast to other utilitarians, stresses more its ethical and social dimensions. This chapter complicates a common one-dimensional perception of Say as the free-market liberal who propagated the doctrine that aggregate supply creates its own demand.

11The weaknesses of the volume spring from already-noted problems that plague many conference collections. First, its papers frequently do not substantially address the notion of power and sometimes pay only lip service to that concept. Second, there are shortcomings in the coherence of the volume as a whole, despite its clever organization or, indeed, because of its roots in mainstream writing. As regards the second problem, the fact that the book is divided into separate parts dealing with political (or state) power, economic (or distributional) power, market power, and the ideas of economists (or what can be called knowledge power), has some unfortunate implications. For one, it leads to neglecting the interrelation between these different kinds of power (although some papers very briefly addressed these interrelations). This is a pity because the book pays little or no attention to the interaction between political and economic power (as well as knowledge power), and to global power (see Strange, 1988), which are central to the understanding of past and present capitalist economies. Dealing with these issues would have required going more systematically beyond the boundaries of economics in a narrow sense. Second, and as a consequence, it is regrettable that little or no attention is given to Marx and his followers (see Palermo, 2016), who are only briefly mentioned in the introduction, and who analyzed how power arising in the economic sphere, especially in the social relations of production, affects the superstructure, which includes the state, knowledge, and other aspects of society, and imperialism. Also unfortunate is the neglect of institutionalists (the book only focuses on one aspect of Veblen’s ideas), post-Keynesians, who emphasize the interaction between institutions, uncertainty and power (see Dutt, 2015), and mercantilists, who examined the relation between power and plenty in terms of international relations. Finally, there are too many papers discussing the policy proposals of particular economists making scant contributions to our understanding of power (even knowledge power). Therefore, one wonders why these papers are not placed—notwithstanding the symmetry between the papers in each section—in the final part of the book.

12Despite these weaknesses, the book makes a very useful contribution to the literature on power from the perspective of the history of economic thought. As I previously noted, several papers take interesting and major steps towards improving our understanding of this important and elusive concept, and other less compelling papers still provide valuable insights. Moreover, even when not closely or directly related to power, most of the remaining papers are interesting and stimulating in their own right. Two additional features of the book also deserve praise: its consideration of different views on power, coming from mainstream or neoclassical approaches, but also from heterodox approaches; and its geographical spread, examining the history of thought in non-English speaking European countries such as France, Germany or Italy (although the book does not consider non-western Europe). Overall, the volume is highly recommended to scholars of the history of economic thought and any economist interested—as any economist should be—in power.

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Dutt, Amitava Krishna. 2015. Uncertainty, Power, Institutions and Crisis: Implications for the Future of Capitalism. Review of Keynesian Economics, 3(1): 9-28.

Kalecki, Michal. 1943. Political Aspects of Full Employment. The Political Quarterly, 14(4): 322-331.

Keynes, John Maynard. 1936. The General Theory of Employment, Interest and Money. London: Macmillan.

Kurz, Heinz. 2015. Adam Smith on Markets, Competition and Violation of Liberty. Cambridge Journal of Economics, 40(2): 615-638.

Palermo, Giulio. 2016. Economics and Power. A Marxist Critique. London: Routledge.

Strange, Susan. 1988. States and Markets. An Introduction to International Political Economy. Oxford: Basil Blackwell.

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Amitava Krishna Dutt, « Manuela Mosca (ed.), Power in Economic Thought », Œconomia, 9-4 | 2019, 881-886.

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Amitava Krishna Dutt, « Manuela Mosca (ed.), Power in Economic Thought », Œconomia [En ligne], 9-4 | 2019, mis en ligne le 01 décembre 2019, consulté le 25 janvier 2020. URL :

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Amitava Krishna Dutt

Department of Political Science, University of Notre Dame.

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