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Political Economy: The Contest of Economic Ideas
In this second edition of Political The Contest of Economic Ideas , Frank Stilwell provides a fully updated overview of the political economy and its connection with social concerns. The book investigates the main traditions of economic ideas and provides a 'big picture' overview of
the analytical tools and value judgements associated with competing schools of economic thought.
Political The Contest of Economic Ideas features a clear and engaging writing style which makes the complexities of contesting economic ideas--such as classical political economy and Marxist economics, neoclassical economies and neo-liberalism--easier to grasp.
the analytical tools and value judgements associated with competing schools of economic thought.
Political The Contest of Economic Ideas features a clear and engaging writing style which makes the complexities of contesting economic ideas--such as classical political economy and Marxist economics, neoclassical economies and neo-liberalism--easier to grasp.
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First published December 18, 2002
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About the author
Frank Stilwell
12 books5 followersFrank Stilwell is professor emeritus in political economy at the University of Sydney, where he began teaching in 1970. He is a well-known critic of conventional economics and an advocate of alternative economic strategies for social justice and ecological sustainability. Frank has written a dozen books on political economic issues and co-edited half a dozen others. His next book is The Political Economy of Inequality. He is a fellow of the Academy of Social Sciences in Australia, the coordinating editor of the Journal of Australian Political Economy, vice president of the Evatt Foundation and executive member of the Council for Peace with Justice.
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Displaying 1 - 5 of 5 reviews
November 24, 2016
Have you ever been confused by the concept of "political economy?" Australian professor Frank Stilwell can help.
Dr. Stilwell begins this book with an overview of the basic language and concepts of political economy. If you've read economics before, these first chapters will seem a bit simplistic and perhaps even dull. But Stilwell then builds on this foundation to take his reader through a history of political economic thought, from Smith and Ricardo to Marx and Keynes and beyond. Major sections cover neo-classical economics, Marxist economics, Keynesian economics and institutional economics. He explains how various political ideologies have specific economic implications and then frames the whole concept of political economy as a contest between these ideas as they vie to see which one actually matches "real world" conditions best and/or can provide the best economic outcomes.
Two things make this textbook stand apart from others I have read. First, Stilwell has broken the material down into about 40 bite-sized chapters. He doesn't cover too much in each chapter, instead allowing his readers to absorb just one or two key concepts each time. Second, this book is written from a non-American perspective and that is really helpful. So many of the textbooks in the US don't provide significant international context. Stilwell doesn't come from the US, so his point of view is always more global. And even when he deals with the US economy, he describes it as an outsider - an interested observer, but not a participant.
The second distinctive (the non-US point of view) also leads to a more measured and even critical approach to the various economic concepts. Stilwell makes it clear that capitalism has, at some level, "won the battle" as to what kind of economic system provides the best outcomes. However, he is quick to point out that other theories and critiques are not without merit and that we, as a global community, are still deciding what the limits of capitalism are and to what extent other voices need to be heard. His final chapters leave us with more questions about the global economy than they answer. The implication is that the contest of economic ideas is far from over.
This is a very worthwhile primer on political-economic thought.
Dr. Stilwell begins this book with an overview of the basic language and concepts of political economy. If you've read economics before, these first chapters will seem a bit simplistic and perhaps even dull. But Stilwell then builds on this foundation to take his reader through a history of political economic thought, from Smith and Ricardo to Marx and Keynes and beyond. Major sections cover neo-classical economics, Marxist economics, Keynesian economics and institutional economics. He explains how various political ideologies have specific economic implications and then frames the whole concept of political economy as a contest between these ideas as they vie to see which one actually matches "real world" conditions best and/or can provide the best economic outcomes.
Two things make this textbook stand apart from others I have read. First, Stilwell has broken the material down into about 40 bite-sized chapters. He doesn't cover too much in each chapter, instead allowing his readers to absorb just one or two key concepts each time. Second, this book is written from a non-American perspective and that is really helpful. So many of the textbooks in the US don't provide significant international context. Stilwell doesn't come from the US, so his point of view is always more global. And even when he deals with the US economy, he describes it as an outsider - an interested observer, but not a participant.
The second distinctive (the non-US point of view) also leads to a more measured and even critical approach to the various economic concepts. Stilwell makes it clear that capitalism has, at some level, "won the battle" as to what kind of economic system provides the best outcomes. However, he is quick to point out that other theories and critiques are not without merit and that we, as a global community, are still deciding what the limits of capitalism are and to what extent other voices need to be heard. His final chapters leave us with more questions about the global economy than they answer. The implication is that the contest of economic ideas is far from over.
This is a very worthwhile primer on political-economic thought.
May 30, 2023
"Coming from a different political perspective, but arriving at a similar conclusion, are the proponents of public choice theory within orthodox economics. These are strange bedfellows indeed." I'm dead
Precise, wide-ranging, prescient. A tremendous introduction to political economy.
Precise, wide-ranging, prescient. A tremendous introduction to political economy.
July 11, 2025
An extremely helpful survey of the main currents of political economic thought, what the subject is about, and how it is different from standard economic theory. He touches on everything from classical and Marxist economics, and the rise of neoclassical economics, through to institutional economics, Keynesian economics, and finally modern political economy: environmental, feminist, and new-socialist economics(?). So far, I’ve just been throwing words around so I suppose I should now attempt to go into a bit more depth (though I am likely to drown in my own confusion).
By ‘political economy’ Stilwell is emphasising that the economic system (the system governing the allocation and distribution of goods and services amongst members of society) *cannot* be understood without reference to politics, sociology, history and the actions of the state (a collection of institutions consisting of the government, the public service, the judiciary and so on). It should also be noted that the particular schools of thought that he discusses are best understood as responses to *capitalism* as this seems to have been the dominant form of economic (and political?) organisation for at least the past two centuries. We can roughly understand capitalism as a system of economic organisation with two primary classes (though things are obviously far more complex in reality), the capitalist and the working class. The former owns the means of production, like land, technology, materials and so on, and uses this, along with the labour of the working class to produce goods and services for consumption, with the capitalists absorbing the profits, and using them to produce further goods and services.
So, with the above context I will now try saying a thing or two about the actual schools of thought that he looks at.
Classical political economists like Smith, Malthus, Ricardo, Mill and the like, are shown to be thinkers of far more depth then twentieth century neoclassical economists. In the case of Smith, he was not just a theoriser of the market (the whole idea of markets and their logic is deeply fascinating but am setting this aside for the sake of time), but also in providing social commentary on some of the more unpleasant consequences associated with its rise. He realised that though the market naturally let to the division of labour and specialisation, which in turn, ought to lead to increased productivity, and concurrently, through competition, created incentives for innovation, there were also many who could not benefit from the losers: the thousands of people stuck in mines and factories, performing exploitative and dull work. And here Smith saw that the market could not be left to its own devices: what was needed was conscious reflection on the part of society on the conditions needed for human flourishing, and how best to check this tendency of the market.
Then, of course, you have Karl Marx. Marx is a fascinating figure and still seems to be worshipped on university campuses though I don’t know why: he was an intellectual with many brilliant ideas but was no prophet. Why then are his ideas treated by some with such reverence? Are they not doing an injustice to Marx? Returning to his contributions to political economy, I’d like to focus on his analysis of capitalism, and set aside his work on the nature of historical change and alternative political/economic systems to capitalism. From my understanding (haven’t read any of Marx’s original works) there were three tendencies that he noted in capitalism, and which would go on to be developed further by later political economists: 1) the tendency of capitalist societies to create vast amounts of inequality through the continual enrichment of the capitalist class at the expense of the working class; 2) the instability/self-destructive tendency of capitalist systems through the processes that lead to 1): the idea here being that through capitalists’ tendencies to accumulate profits, workers would receive smaller and smaller wages, work would increasingly be automated, and capitalists would have no one to buy their products; 3) a problem of perverse incentives: unchecked competition doesn’t just lead to increasing innovation, but also incentivises the destruction of competitors, and therefore, to the increasing concentration of wealth and power (related to 1)). There’s also his sociological analysis in which he talks about worker alienation, and the nature of capitalist ideology: super interesting stuff.
These are deep problems indeed and as we look around the world, we can see all these tendencies at work.
There are then the neoclassical economists, with their dream (or delusion?) of providing the discipline of economics with sound and unshakeable foundations. Of transforming the discipline of economics into something akin to the hard sciences. We begin with the famous homo economicus assumption: humans are selfish utility maximisers with unchanging preferences. And we extend this by creating a world of perfectly competitive markets with homogenous products. And from this, we conclude that human flourishing simply requires the market to be left to its own devices. Of course, its assumptions are plainly false, as any sociologist, psychologist, or anthropologist will tell you that this anything but true… And the other assumptions, well, need I even say anything? The economists will retort that they are simply building models in order to provide rough descriptions of how economic systems actually work, and not providing normative guidance, but this is deceiving. In practice, the ideas of the neoclassical economists infect all our minds and guide governments and public servants in ways that may not even know about. And of course, there is an implicit philosophical judgement being made as to the nature of economic knowledge and whether or not it can be achieved through their methods.
Now we can say a thing or two about one of the first institutional economists, namely Thorstein Veblen. We can now begin to think about the way in which capitalism economic systems play with our very minds: capitalist systems rely on consumption/growth to stay alive, and this naturally leads to consumerism, and what Veblen calls conspicuous consumption: a world in which people mindlessly consume and compete for social status through buying more and more useless frivolous things, without even understanding why there doing so. And at a slightly higher level of abstraction, we can see a similar tendency at work amongst capitalists themselves: there are the ‘engineer’ capitalists who provide goods and services with a tangible and meaningful effect on material wellbeing, but then you also have the finances and businessmen who are caught up in making profit without adding anything of value at all.
We can finish this brief summary of Stilwell’s book with some remarks on the work of the brilliant John Maynard Keynes: he was a philosopher, mathematician, historian, social critic, public servant, financier, economist, and probably other things too. His thought can be situated in between that of Marx and the neoclassical economists. Capitalism, on his view, is a necessary evil, a system that we just have to live with. So, the question for Keynes, then, is how can we best manage it? How can we create the conditions for human flourishing within the limits proscribed by capitalism? How can we keep its instability in check? And additionally, what is the nature of money and speculation, and what role do they play in capitalist economic systems?
Keynes’ best-known contributions to the discipline of economics, though apparently it is often bastardised (and I’m almost certain that I am about to make that very error), are his solutions to the complementary problems of recession and inflation through government intervention, and of thus giving a greater role to government than desired by neoclassical thinkers. One could say more and more, but this will have to do for now.
Anyhow, from here Stilwell says a little bit about modern developments in political economy, develops a critique of neoclassical economics by drawing on the works of the aforementioned thinkers, as well as contemporary academics and practitioners coming from feminist, ecological and various other traditions, and finishes with an exploration into the varying epistemological assumptions made by varying schools of political economic though and through doing this, raises the possibility that there will never be any consensus as to which politico-economic system would be best for human flourishing.
By ‘political economy’ Stilwell is emphasising that the economic system (the system governing the allocation and distribution of goods and services amongst members of society) *cannot* be understood without reference to politics, sociology, history and the actions of the state (a collection of institutions consisting of the government, the public service, the judiciary and so on). It should also be noted that the particular schools of thought that he discusses are best understood as responses to *capitalism* as this seems to have been the dominant form of economic (and political?) organisation for at least the past two centuries. We can roughly understand capitalism as a system of economic organisation with two primary classes (though things are obviously far more complex in reality), the capitalist and the working class. The former owns the means of production, like land, technology, materials and so on, and uses this, along with the labour of the working class to produce goods and services for consumption, with the capitalists absorbing the profits, and using them to produce further goods and services.
So, with the above context I will now try saying a thing or two about the actual schools of thought that he looks at.
Classical political economists like Smith, Malthus, Ricardo, Mill and the like, are shown to be thinkers of far more depth then twentieth century neoclassical economists. In the case of Smith, he was not just a theoriser of the market (the whole idea of markets and their logic is deeply fascinating but am setting this aside for the sake of time), but also in providing social commentary on some of the more unpleasant consequences associated with its rise. He realised that though the market naturally let to the division of labour and specialisation, which in turn, ought to lead to increased productivity, and concurrently, through competition, created incentives for innovation, there were also many who could not benefit from the losers: the thousands of people stuck in mines and factories, performing exploitative and dull work. And here Smith saw that the market could not be left to its own devices: what was needed was conscious reflection on the part of society on the conditions needed for human flourishing, and how best to check this tendency of the market.
Then, of course, you have Karl Marx. Marx is a fascinating figure and still seems to be worshipped on university campuses though I don’t know why: he was an intellectual with many brilliant ideas but was no prophet. Why then are his ideas treated by some with such reverence? Are they not doing an injustice to Marx? Returning to his contributions to political economy, I’d like to focus on his analysis of capitalism, and set aside his work on the nature of historical change and alternative political/economic systems to capitalism. From my understanding (haven’t read any of Marx’s original works) there were three tendencies that he noted in capitalism, and which would go on to be developed further by later political economists: 1) the tendency of capitalist societies to create vast amounts of inequality through the continual enrichment of the capitalist class at the expense of the working class; 2) the instability/self-destructive tendency of capitalist systems through the processes that lead to 1): the idea here being that through capitalists’ tendencies to accumulate profits, workers would receive smaller and smaller wages, work would increasingly be automated, and capitalists would have no one to buy their products; 3) a problem of perverse incentives: unchecked competition doesn’t just lead to increasing innovation, but also incentivises the destruction of competitors, and therefore, to the increasing concentration of wealth and power (related to 1)). There’s also his sociological analysis in which he talks about worker alienation, and the nature of capitalist ideology: super interesting stuff.
These are deep problems indeed and as we look around the world, we can see all these tendencies at work.
There are then the neoclassical economists, with their dream (or delusion?) of providing the discipline of economics with sound and unshakeable foundations. Of transforming the discipline of economics into something akin to the hard sciences. We begin with the famous homo economicus assumption: humans are selfish utility maximisers with unchanging preferences. And we extend this by creating a world of perfectly competitive markets with homogenous products. And from this, we conclude that human flourishing simply requires the market to be left to its own devices. Of course, its assumptions are plainly false, as any sociologist, psychologist, or anthropologist will tell you that this anything but true… And the other assumptions, well, need I even say anything? The economists will retort that they are simply building models in order to provide rough descriptions of how economic systems actually work, and not providing normative guidance, but this is deceiving. In practice, the ideas of the neoclassical economists infect all our minds and guide governments and public servants in ways that may not even know about. And of course, there is an implicit philosophical judgement being made as to the nature of economic knowledge and whether or not it can be achieved through their methods.
Now we can say a thing or two about one of the first institutional economists, namely Thorstein Veblen. We can now begin to think about the way in which capitalism economic systems play with our very minds: capitalist systems rely on consumption/growth to stay alive, and this naturally leads to consumerism, and what Veblen calls conspicuous consumption: a world in which people mindlessly consume and compete for social status through buying more and more useless frivolous things, without even understanding why there doing so. And at a slightly higher level of abstraction, we can see a similar tendency at work amongst capitalists themselves: there are the ‘engineer’ capitalists who provide goods and services with a tangible and meaningful effect on material wellbeing, but then you also have the finances and businessmen who are caught up in making profit without adding anything of value at all.
We can finish this brief summary of Stilwell’s book with some remarks on the work of the brilliant John Maynard Keynes: he was a philosopher, mathematician, historian, social critic, public servant, financier, economist, and probably other things too. His thought can be situated in between that of Marx and the neoclassical economists. Capitalism, on his view, is a necessary evil, a system that we just have to live with. So, the question for Keynes, then, is how can we best manage it? How can we create the conditions for human flourishing within the limits proscribed by capitalism? How can we keep its instability in check? And additionally, what is the nature of money and speculation, and what role do they play in capitalist economic systems?
Keynes’ best-known contributions to the discipline of economics, though apparently it is often bastardised (and I’m almost certain that I am about to make that very error), are his solutions to the complementary problems of recession and inflation through government intervention, and of thus giving a greater role to government than desired by neoclassical thinkers. One could say more and more, but this will have to do for now.
Anyhow, from here Stilwell says a little bit about modern developments in political economy, develops a critique of neoclassical economics by drawing on the works of the aforementioned thinkers, as well as contemporary academics and practitioners coming from feminist, ecological and various other traditions, and finishes with an exploration into the varying epistemological assumptions made by varying schools of political economic though and through doing this, raises the possibility that there will never be any consensus as to which politico-economic system would be best for human flourishing.
October 9, 2017
Frank Stilwell has an astounding ability to articulate complicated theories in a simple, yet precise manner. Introductory textbooks are often dull and unstimulating, but not this one. I actually found it quite invigorating, at least the parts concerning the slow demise of capitalism ; ) Lacking when it comes to Schumpetarian economics, thus only four stars.
July 9, 2020
Excellent intro on the subject, read it at first year uni, one of the few textbooks I was keen to finish cover to cover, very engaging.
Displaying 1 - 5 of 5 reviews