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How the World Works: The Story of Human Labor from Prehistory to the Modern Day
A sweeping history of the full range of human labor.
Few authors are able to write cogently in both the scientific and the economic spheres. Even fewer possess the intellectual scope needed to address science and economics at a macro as well as a micro level. But Paul Cockshott, using the dual lenses of Marxist economics and technological advance, has managed to pull off a stunningly acute critical perspective of human history, from pre-agricultural societies to the present. In How the World Works, Cockshott connects scientific, economic, and societal strands to produce a sweeping and detailed work of historical analysis. This book will astound readers of all backgrounds and ages; it will also will engage scholars of history, science, and economics for years to come.
Few authors are able to write cogently in both the scientific and the economic spheres. Even fewer possess the intellectual scope needed to address science and economics at a macro as well as a micro level. But Paul Cockshott, using the dual lenses of Marxist economics and technological advance, has managed to pull off a stunningly acute critical perspective of human history, from pre-agricultural societies to the present. In How the World Works, Cockshott connects scientific, economic, and societal strands to produce a sweeping and detailed work of historical analysis. This book will astound readers of all backgrounds and ages; it will also will engage scholars of history, science, and economics for years to come.
440 pages, Hardcover
First published January 1, 2020
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1244 people want to read
About the author
Paul Cockshott
24 books81 followersPaul Cockshott was a computer scientist at the University of Edinburgh, Scotland.
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Displaying 1 - 16 of 16 reviews
March 14, 2020
Hot stuff, full review pending. Every other page has a graph or table you can download to your brain for extra marxism.
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December 19, 2020Paul Cockshott "wrote [this book] because there is a lack, as far as [he is] aware, of a recent introduction to the materialist theory of history." That is indeed a role that some book should play - and after reading How The World Works, I'm not any more aware of a book that fills that role either. HTWW fails at this task, and nevertheless succeeds as a book, for the same reason. To write a catechism or a textbook is a useful thing, but requires a certain erasure of individual personality in writing. One vacates one's idiosyncratic perspective to offer the authority of the Tradition - even when that Tradition is a bit of an Evolving Science - as best as one can. Cockshott is no Engels, Kautsky, or Sunkara - his perspective, while a Marxist one, is very much his own; idiosyncratic, eclectic, and with something fascinating and somewhat underdeveloped on every page.
At the chapter-by-chapter and section-by-section level, this peppering of the fascinating and underdeveloped (citations, references, equations, hypotheses) gives an appearance of incoherence - this is one of those books composed entirely of asides. Zoom out a bit and an ethos and set of guiding themes become clearer. The ethos I find a bit disturbing - but nevertheless one useful to have as part of the conversation or stimulate insights, even if I wouldn't want it to become dominant. The positive hypotheses I'll have to chew on more.
The positive hypotheses typically take the form of hard variables setting constraints within which things tend to vary randomly; most prominently, different levels of technology constrain which modes of production are possible; and the net labor cost of goods constrains decision-making around who produces what for whom, a "law of value" which makes itself known in every mode of production. For all that HTWW is about modes of production, Cockshott seems to de-emphasize their differences: although he is best known in some circles for his defense of the efficiency and calculability of socialist planning, and though he does say that to do so depends on modern computing technology, he goes out of his way to emphasize the rationality and calculability of pre-modern economies as well, against those - both Marxists, liberals, and admiring Catholic communitarians - who saw such relations as dominated by cultural rather than narrowly economic determinants. He deploys some of the bread-and-butter of his own background - some reconstructed input-output matrices - to argue for this, an interesting intervention in a debate that economic historians, anthrologists, &c. have been debating for some time. And if anything he thinks that capitalist and (some historical) socialist accounting mechanisms have had a tendency to under-value labor and thus fail to make proper labor-saving investments.
The ethos that runs through this book is one I would describe as wholist and antihumanist - one concerned with the economy as a whole, as its own unit, for its own purposes. Biological and mechanical metaphors abound; size is success, as in the beginning, where he notes the succcess of termite colonies by virtue of how much biomass they've achieved. Families, gender, and the raising of children are discussed in great detail, but always as a productive activity, creating the next generation of laborers. Prostitution is condemned not out of Victorian sexual morality but out of Victorian economic morality (it is unproductive.) For those who see some of the least appealing aspects of capitalism and (some historical) socialism as being their subordination of humans to The Economy rather than visa-versa, this has a tendency to disturb, even if the concrete suggestions he makes regarding childrearing, and so on, are humane. Of course, this may just be responding to tone, so I don't want to cast aspersions too much on Cockshott himself - much less imply that any of the concrete proposals and hypotheses offered here are incorrect. All are interesting, and if as noted they have a tendency to be underdeveloped, Cockshott is at least generally humble about the provisional nature of scientific theories, and is always eager for suggestive empirical evidence for any claim.
I mentioned in my review of Smil's "Energy and Civilization" that the book had made me much more curious about fossil fuels as the real leapthrough to modern life, not anything institutional or ideational; and that this is disturbing as it implies modernity could be on a timetable. Like Smil, Cockshott seems relatively optimistic about transitioning to a post-fossil fuel world, although perhaps not as optimistic: we could collapse down to a premodern level, and surviving likely would entail much less luxury outside of the electronic bounties of the internet. I don't know enough to judge these views against each other - or against even more pessimistic views - but it is hard to imagine more important questions going forward. I suppose I'll slowly have to work on learning more physical science, if only on a baseline literacy level.
Recommended to anyone who enjoys this sort of thing - you know who you are, and I was.
At the chapter-by-chapter and section-by-section level, this peppering of the fascinating and underdeveloped (citations, references, equations, hypotheses) gives an appearance of incoherence - this is one of those books composed entirely of asides. Zoom out a bit and an ethos and set of guiding themes become clearer. The ethos I find a bit disturbing - but nevertheless one useful to have as part of the conversation or stimulate insights, even if I wouldn't want it to become dominant. The positive hypotheses I'll have to chew on more.
The positive hypotheses typically take the form of hard variables setting constraints within which things tend to vary randomly; most prominently, different levels of technology constrain which modes of production are possible; and the net labor cost of goods constrains decision-making around who produces what for whom, a "law of value" which makes itself known in every mode of production. For all that HTWW is about modes of production, Cockshott seems to de-emphasize their differences: although he is best known in some circles for his defense of the efficiency and calculability of socialist planning, and though he does say that to do so depends on modern computing technology, he goes out of his way to emphasize the rationality and calculability of pre-modern economies as well, against those - both Marxists, liberals, and admiring Catholic communitarians - who saw such relations as dominated by cultural rather than narrowly economic determinants. He deploys some of the bread-and-butter of his own background - some reconstructed input-output matrices - to argue for this, an interesting intervention in a debate that economic historians, anthrologists, &c. have been debating for some time. And if anything he thinks that capitalist and (some historical) socialist accounting mechanisms have had a tendency to under-value labor and thus fail to make proper labor-saving investments.
The ethos that runs through this book is one I would describe as wholist and antihumanist - one concerned with the economy as a whole, as its own unit, for its own purposes. Biological and mechanical metaphors abound; size is success, as in the beginning, where he notes the succcess of termite colonies by virtue of how much biomass they've achieved. Families, gender, and the raising of children are discussed in great detail, but always as a productive activity, creating the next generation of laborers. Prostitution is condemned not out of Victorian sexual morality but out of Victorian economic morality (it is unproductive.) For those who see some of the least appealing aspects of capitalism and (some historical) socialism as being their subordination of humans to The Economy rather than visa-versa, this has a tendency to disturb, even if the concrete suggestions he makes regarding childrearing, and so on, are humane. Of course, this may just be responding to tone, so I don't want to cast aspersions too much on Cockshott himself - much less imply that any of the concrete proposals and hypotheses offered here are incorrect. All are interesting, and if as noted they have a tendency to be underdeveloped, Cockshott is at least generally humble about the provisional nature of scientific theories, and is always eager for suggestive empirical evidence for any claim.
I mentioned in my review of Smil's "Energy and Civilization" that the book had made me much more curious about fossil fuels as the real leapthrough to modern life, not anything institutional or ideational; and that this is disturbing as it implies modernity could be on a timetable. Like Smil, Cockshott seems relatively optimistic about transitioning to a post-fossil fuel world, although perhaps not as optimistic: we could collapse down to a premodern level, and surviving likely would entail much less luxury outside of the electronic bounties of the internet. I don't know enough to judge these views against each other - or against even more pessimistic views - but it is hard to imagine more important questions going forward. I suppose I'll slowly have to work on learning more physical science, if only on a baseline literacy level.
Recommended to anyone who enjoys this sort of thing - you know who you are, and I was.
August 10, 2021
Very interesting, extremely materialist examination of the basics of the development of technologic and demographic foundations of different modes of production. Cockshott is a rather hardcore technological determinist, in an occasionally frustrating manner where he can be somewhat dismissive of the role of subjective and or superstructural factors play in shaping the details of societal development.
However, that aside, this text is a fascinating look at different modes of production, from slave societies to peasant economies, on through capitalist and Socialist ones. Makes the case for the efficiency and superiority of planned economies, including examinations of what went right and what went wrong in the USSR in ways that cut through a lot of the mystification surrounding that extremely ideological topic.
Overall, I definitely recommend this book although I'd recommend reading it with a somewhat critical eye, as there are times his statistical approach can be a bit reductionist.
However, that aside, this text is a fascinating look at different modes of production, from slave societies to peasant economies, on through capitalist and Socialist ones. Makes the case for the efficiency and superiority of planned economies, including examinations of what went right and what went wrong in the USSR in ways that cut through a lot of the mystification surrounding that extremely ideological topic.
Overall, I definitely recommend this book although I'd recommend reading it with a somewhat critical eye, as there are times his statistical approach can be a bit reductionist.
June 5, 2023
Utterly, refreshingly unapologetic, and an absolute beast of a book.
This is a painstakingly materialist examination of modes of production and the context of their transitions and coexistences, technologically and politically. Core to his economic analysis, Cockshott lays out detailed research showing the statistical correlations between labour value and profits which reinforce a Marxist account of the determination of price structures. Building on the legacy of Nobel Prize-winning Soviet economist Kantorovich's exploration of linear optimization, Cockshott argues for the efficiency of planning against the so-called "economic calculation problem" of the Austrian school, and the case he makes really comes across as scientific but definitive. He is by no means fatalistic, though: As with the transition from slavery to proletarianization in the U.S. South, economic and technical forces can heighten tensions to push for change today. Unlike the changes in England's Industrial Revolution, cost-effectiveness from a capitalist standpoint is a barrier to changes in transportation and energy tech, and late capitalist societies need political action to be pushed over the edge.
Chapter 1: Introduction & Chapter 2: Pre-Class Economy
"The key thing about this materialist method in history was to seek the explanation for social institutions in the methods by which societies produced their needs." - p. 27
The most basic need to produce for is clear enough:
"Society is, before all else, a collective effort to ensure its own physical continuity." - p. 15
Way back into our (pre-)history, in the process known anthropologically as the Neolithic Revolution, humans turned from hunter-gatherer subsistence toward farming. The burning question for anthropology is: why? Theories abound, but as Paul Cockshott briefly considers some, a few points are clear:
- "The Neolithic Revolution led to a long period of comparatively egalitarian social development." - p. 38
- "Agriculture introduces, for the first time, a dependence of present labour on past labour (ultimate seed of patronage, ancestor-worship)." - p. 41
- "Class formation requires that at least part of the food surplus goes to support a [hereditary] group of people that no longer engages in physical production." - p. 43
- Drive to reproduce the community & drive to exogamous relations leading into Bronze Age.
- "Religion, magic, ritual, and terrorism based on superstition justified both patriarchy and class hierarchy." - 49
Chapter 3: Slave Economy
"A slave economy is unstable unless it has a political superstructure that uses a substantial free population as a counterpoise to the slaves." - 60
And yet, a defining contradiction: slave economies run on a permanent "deficit" of slaves, replenished from outside to 'outsource' the cost of reproduction. "Slave labour is profitable because the reproduction costs of the slaves are met by the societies from which they are taken." (65)
The key takeaways about slave economy, foreshadowing capital: A.) Well-developed commodity exchange. B.) Dependence on external source of labour.
===
Cockshott turns from this to an argument for the classical theory of prices. In short, this theory states that, "the prices at which commodities sell tend to be in proportion to the labor required to make them." (68)
Not only are hints of this argument for this theory as far back as Cato, and 14th-century scholar Ibn Khaldun, but "Since the 1980s it has been possible to use computer calculations to obtain estimates of just how closely the selling prices of industrial outputs correlate direct and indirect labor used by these industries."...and Cockshott himself has done this, showing correlation consistent with the labour theory of value. (69)
The relevance of this thread is in the way labour power's connection to value is obscured by fetishism---by any point where the labour-price connection is not made directly visible to workers. The way the value form does this is a function of class society and, as he later argues, a complication for planning in transition to a classless one.
With this in mind, in comes the introduction of money as a data-compressing point of value comparison, both for buying and selling and, crucially, for tax liability purposes.
According to an "alternative theory of money", the value of money derives not from its quantity (see "printing more causes inflation lol") but from the state's need to appropriate real social surplus value. Hence, this "idealization" of real value facilitates state administration. In the chapter on AES he'll note how gross targets for industries. as part of cumulative social value, disconnected commodities' value from what labour would determine them as, due to the impracticality at the time of planning price-structures for, say, every distinct item of clothing as opposed to undifferentiated energy KWh or even types of steel.
==
Back to slave economies: driving the perpetuation of systems, "recurrence relations" (108) are often externalized costs but are needed to reproduce the systems. Without going into excess detail about how circumstances changed the recurrence relations of slave economies toward feudalism (see Engels's famous "The Origin of the Family", for a start) there is a key difference:
Chapter 4: Peasant Economy
"The most critical feature that differentiates peasant agriculture from commercial slave economies and capitalist agriculture is that a large part of the working population has access to land on which they can feed themselves." (93)
There was also, of course, the commons as a persistent feature, until enclosure. But Cockshott brings us back to Adam Smith in critique of feudal pomp and circumstance:
Adam Smith realizes: "with the accumulation of capital an increased part of the workforce is engaged in simply replacing and maintaining the capital, and that in consequence the rate of return on capital will fall as the proportion between capital and revenue rises. This, he believed, was a necessary accompaniment to economic progress." - 100
"The objection to feudalism as a social order was not inefficiency, but profligacy and waste." (100)
As it turns out, of course, while steam power and later advancements ditched feudal technology for modern and energy-efficient alternatives, profligacy and waste were no mere feudal phenomenon.
Chapter 5: Capitalist Economy
Here there's an overview of primitive accumulation, the falling rate of profit, and demographic tensions such as systemic gendered inequity. Rather than summarizing what the author already does, we can just note that key to capitalism's rise is more energy-efficient and labour-saving technology, but in-built barriers eventually cause this to peak.
"A condition therefore of capitalist civilization, and the technical advances on which it depends, has been the continuing development of science and the educational and research based on which science relies. These are not something generated internally by capitalist enterprise." (123)
Further,
"Innovations driven just by trial and error…only become rapid when coupled with socially produced and accumulated, non-commodified theory…Scientific advances usually bring their benefit well into the future...So capitalist profit seeking will itself never generate the science needed for substantial technical change." - 124
This fundamental contradiction brings almost-literally earth-shattering consequences in capital's inability thus far to ditch fossil fuels or even to maximally adopt green alternatives, which leads into the next chapter.
Chapter 6: Socialist Economy
Cockshott has no time or patience for the standard ontological hangups over AES being or not being 'real socialism'. He simply takes the ontological step to calling it socialist, as "The politically determined division of the concrete forms of the social product," (210) as a premise and works empirically to assess its functionality and lessons for future democratically-planned economies.
He argues that "A unitary state power was better placed to present a united front to the hostile capitalist world, and best placed to coordinate the economic development of nations at different levels of development." (206) However, splits along nation-state lines undermined this approach.
One point, a callback to the concept of dual-power, using a systems theory approach, argues:
"Socialism may exist as a subsystem within countries that are predominantly capitalist, and capitalism or domestic peasant economy may exist as subsystems in predominantly socialist economies." (210-211)
The practical implications are that socialist revolutions should expect birth pangs of the old system, and that models can be developed within it. He even goes as far as to say in Chapter 7, "The work individual people do posting stuff on the web is communism in action...The existence of these new productive forces gives rise to a new form of communist ethic among those who work them, summarized in the slogan: information wants to be free." (292) This is not to deny the current system's practice of legal enclosure (piracy laws) on public sharing of commercially-protected information, which he cites as limitations.
After all, "Though political revolutions may permit changes in property relations, they are, at least in the short term, powerless to affect a change in the mode of production." (211) That, it turns out, is a longer-term project with context-driven roadblocks.
If the author's positions on the Chinese critique of Khrushchev's "state of the entire people" reforms are an indication of where he draws the boundaries, then sorry to say that---and I'm not just being an ultraleft puritan here---this is a big leap too far. Khrushchev was not Yeltsin, but the claim that, "the economic changes introduced by Khrushchev were fairly minimal" (208) downplays the reverberating effects laid out for example by Keeran and Kenny in Socialism Betrayed: Behind the Collapse of the Soviet Union. Even if we call his changes minimal, even the short-term political or economic effects were not. What's all the more frustrating is Cockshott is clearly aware of the black market's influence on the consumer economy (207), but if Soviet policymakers had an excuse for downplaying it, then there's no excuse for this in hindsight. Cockshott rightly says Gorbachev went too far, but he was able to do so for reasons of earlier precedents.
In other respects, Cockshott's application of systems theory insightfully contextualizes an evolving situation:
With the notion of a socialist "subsystem" (think dual-power) in mind, consider:
"The long lags associated with any demographic feedback means that social relations may change considerably before the feedback takes effect." (227)
China's one-child policy was introduced to limit birth rates in an earlier, different economic context. That approach, combined with investment in China, put demand for workers in a position that raised wages significantly. Yet a declining-birth rate + declining-mortality rate trend, drifting toward an increase in older dependents, will require maternity-friendly reforms (he cites the former DDR's policies).
In short, as Soviet history also shows us, policies suitable for earlier stabilization will need to adapt in time to avoid "stability of the cadres" becoming lag or ossification. This applies beyond party membership to the society-at-large.
On that point, the latter parts of the chapter are a deep dive, using Eastern-bloc case studies, into the operation of value in socialist economies. Cockshott's key argument is that the 20th-century eastern European experiments demonstrate the indispensability of an esoteric interpretation of the law of value. In short, this socialist law of value expresses "the proportions in which the social workforce is distributed between different concrete activities" (262)---because only an accurate measure of labour value can avoid the distortions between relative prices and relative labour value that led to hoarding of workers by factories, overinflated estimates of cost of capital-intensive labour-saving technology, and the resultant bottlenecks, consumer-sector gluts, and shortages (257-259).
Ironically and revealingly, it was political factors limiting central planning that played no small role in later problems. Gorbachev and Yeltsin get passing mentions of obligatory disdain (again, see Keeran and Kenny's book) but of all people Gomulka of postwar Poland gets a shoutout. Cockshott, who visited the region in its socialist era, recalls the decades-lasting differences between on the one hand Poland, where Gomulka abandoned agricultural collectivization, and on the other hand socialist Bulgaria. Data shows "Bulgaria had a much smaller disparity between agricultural prices and agricultural values."(260) The combination of much more labour-intensive (time-consuming) smaller-scale agriculture in Poland and protests against raising controlled prices culminated in bare shop shelves in Poland but much less so in Bulgaria's socialist collectives.
In spite of problems, the tragic ironies in hindsight of the potentials in Soviet history are beautifully explored in the final chapter, while laying out requirements for a future model.
Chapter 7: Future Economies
In spite of aforementioned problems and technical limitations due to limited or absent computing power for planning purposes, Cockshott cites some examples of long-term rational planning in the Soviet economy that one can't help lamenting as bittersweet. The Energiya launcher, designed to launch orbital solar-power plants, and the massive multinational decades-long project for the ITER thermonuclear reactor, are two examples of the immense capacity for progress through long-term planning unconstrained by a need for immediate ROI in high-investment projects.
Cockshott isn't completely starry-eyed about the possibilities, arguing "the industrial mode of production that underlies both capitalism and socialism has its own inherent limitation." (288)
Nevertheless, "The implementation of a transition to a non-fossil fuel economy progresses most rapidly when the entire energy economy is publicly owned, as in China." (298) This has implications for transportation, among other key economic factors.
Finally, laying out principles for a future economic model:
"An economy that is publicly owned and planned using modern computer technology to handle the sheer volume of data…Within this model, the labour theory of value occupies a crucial position [allowing cost differential analysis]." (298)
"In our proposal people would be paid not in money but with non-transferable electronic work accounts…Goods in the shops would then be priced in hours, and the exchange principle is basically one for one." (298-299)
"Contrary to the dreams of futurists, human labour remains essential to the economy. It is humanity's fundamental resource limit." (299)
Ultimately, this book by a computer engineer is one of the most soberly materialist critiques of contemporary political economy I've yet had the pleasure of reading. I am in no way a mathematician and some of the formulaic presentation of linear regression takes a lot of focus and close reading and re-reading to follow, but if you have questions like, "How did farming start?", "Why didn't the Romans have an Industrial Revolution?", "Where are the flying cars and 15-hour work weeks we were promised?", or the ultimate question, "What might socialism look like?"...this is a must-read for you.
(Note: There are a couple of appendices to read which I might add thoughts on in the comments. I'm just getting this all down so I can revisit it afterwards.)
This is a painstakingly materialist examination of modes of production and the context of their transitions and coexistences, technologically and politically. Core to his economic analysis, Cockshott lays out detailed research showing the statistical correlations between labour value and profits which reinforce a Marxist account of the determination of price structures. Building on the legacy of Nobel Prize-winning Soviet economist Kantorovich's exploration of linear optimization, Cockshott argues for the efficiency of planning against the so-called "economic calculation problem" of the Austrian school, and the case he makes really comes across as scientific but definitive. He is by no means fatalistic, though: As with the transition from slavery to proletarianization in the U.S. South, economic and technical forces can heighten tensions to push for change today. Unlike the changes in England's Industrial Revolution, cost-effectiveness from a capitalist standpoint is a barrier to changes in transportation and energy tech, and late capitalist societies need political action to be pushed over the edge.
Chapter 1: Introduction & Chapter 2: Pre-Class Economy
"The key thing about this materialist method in history was to seek the explanation for social institutions in the methods by which societies produced their needs." - p. 27
The most basic need to produce for is clear enough:
"Society is, before all else, a collective effort to ensure its own physical continuity." - p. 15
Way back into our (pre-)history, in the process known anthropologically as the Neolithic Revolution, humans turned from hunter-gatherer subsistence toward farming. The burning question for anthropology is: why? Theories abound, but as Paul Cockshott briefly considers some, a few points are clear:
- "The Neolithic Revolution led to a long period of comparatively egalitarian social development." - p. 38
- "Agriculture introduces, for the first time, a dependence of present labour on past labour (ultimate seed of patronage, ancestor-worship)." - p. 41
- "Class formation requires that at least part of the food surplus goes to support a [hereditary] group of people that no longer engages in physical production." - p. 43
- Drive to reproduce the community & drive to exogamous relations leading into Bronze Age.
- "Religion, magic, ritual, and terrorism based on superstition justified both patriarchy and class hierarchy." - 49
Chapter 3: Slave Economy
"A slave economy is unstable unless it has a political superstructure that uses a substantial free population as a counterpoise to the slaves." - 60
And yet, a defining contradiction: slave economies run on a permanent "deficit" of slaves, replenished from outside to 'outsource' the cost of reproduction. "Slave labour is profitable because the reproduction costs of the slaves are met by the societies from which they are taken." (65)
The key takeaways about slave economy, foreshadowing capital: A.) Well-developed commodity exchange. B.) Dependence on external source of labour.
===
Cockshott turns from this to an argument for the classical theory of prices. In short, this theory states that, "the prices at which commodities sell tend to be in proportion to the labor required to make them." (68)
Not only are hints of this argument for this theory as far back as Cato, and 14th-century scholar Ibn Khaldun, but "Since the 1980s it has been possible to use computer calculations to obtain estimates of just how closely the selling prices of industrial outputs correlate direct and indirect labor used by these industries."...and Cockshott himself has done this, showing correlation consistent with the labour theory of value. (69)
The relevance of this thread is in the way labour power's connection to value is obscured by fetishism---by any point where the labour-price connection is not made directly visible to workers. The way the value form does this is a function of class society and, as he later argues, a complication for planning in transition to a classless one.
With this in mind, in comes the introduction of money as a data-compressing point of value comparison, both for buying and selling and, crucially, for tax liability purposes.
According to an "alternative theory of money", the value of money derives not from its quantity (see "printing more causes inflation lol") but from the state's need to appropriate real social surplus value. Hence, this "idealization" of real value facilitates state administration. In the chapter on AES he'll note how gross targets for industries. as part of cumulative social value, disconnected commodities' value from what labour would determine them as, due to the impracticality at the time of planning price-structures for, say, every distinct item of clothing as opposed to undifferentiated energy KWh or even types of steel.
==
Back to slave economies: driving the perpetuation of systems, "recurrence relations" (108) are often externalized costs but are needed to reproduce the systems. Without going into excess detail about how circumstances changed the recurrence relations of slave economies toward feudalism (see Engels's famous "The Origin of the Family", for a start) there is a key difference:
Chapter 4: Peasant Economy
"The most critical feature that differentiates peasant agriculture from commercial slave economies and capitalist agriculture is that a large part of the working population has access to land on which they can feed themselves." (93)
There was also, of course, the commons as a persistent feature, until enclosure. But Cockshott brings us back to Adam Smith in critique of feudal pomp and circumstance:
Adam Smith realizes: "with the accumulation of capital an increased part of the workforce is engaged in simply replacing and maintaining the capital, and that in consequence the rate of return on capital will fall as the proportion between capital and revenue rises. This, he believed, was a necessary accompaniment to economic progress." - 100
"The objection to feudalism as a social order was not inefficiency, but profligacy and waste." (100)
As it turns out, of course, while steam power and later advancements ditched feudal technology for modern and energy-efficient alternatives, profligacy and waste were no mere feudal phenomenon.
Chapter 5: Capitalist Economy
Here there's an overview of primitive accumulation, the falling rate of profit, and demographic tensions such as systemic gendered inequity. Rather than summarizing what the author already does, we can just note that key to capitalism's rise is more energy-efficient and labour-saving technology, but in-built barriers eventually cause this to peak.
"A condition therefore of capitalist civilization, and the technical advances on which it depends, has been the continuing development of science and the educational and research based on which science relies. These are not something generated internally by capitalist enterprise." (123)
Further,
"Innovations driven just by trial and error…only become rapid when coupled with socially produced and accumulated, non-commodified theory…Scientific advances usually bring their benefit well into the future...So capitalist profit seeking will itself never generate the science needed for substantial technical change." - 124
This fundamental contradiction brings almost-literally earth-shattering consequences in capital's inability thus far to ditch fossil fuels or even to maximally adopt green alternatives, which leads into the next chapter.
Chapter 6: Socialist Economy
Cockshott has no time or patience for the standard ontological hangups over AES being or not being 'real socialism'. He simply takes the ontological step to calling it socialist, as "The politically determined division of the concrete forms of the social product," (210) as a premise and works empirically to assess its functionality and lessons for future democratically-planned economies.
He argues that "A unitary state power was better placed to present a united front to the hostile capitalist world, and best placed to coordinate the economic development of nations at different levels of development." (206) However, splits along nation-state lines undermined this approach.
One point, a callback to the concept of dual-power, using a systems theory approach, argues:
"Socialism may exist as a subsystem within countries that are predominantly capitalist, and capitalism or domestic peasant economy may exist as subsystems in predominantly socialist economies." (210-211)
The practical implications are that socialist revolutions should expect birth pangs of the old system, and that models can be developed within it. He even goes as far as to say in Chapter 7, "The work individual people do posting stuff on the web is communism in action...The existence of these new productive forces gives rise to a new form of communist ethic among those who work them, summarized in the slogan: information wants to be free." (292) This is not to deny the current system's practice of legal enclosure (piracy laws) on public sharing of commercially-protected information, which he cites as limitations.
After all, "Though political revolutions may permit changes in property relations, they are, at least in the short term, powerless to affect a change in the mode of production." (211) That, it turns out, is a longer-term project with context-driven roadblocks.
If the author's positions on the Chinese critique of Khrushchev's "state of the entire people" reforms are an indication of where he draws the boundaries, then sorry to say that---and I'm not just being an ultraleft puritan here---this is a big leap too far. Khrushchev was not Yeltsin, but the claim that, "the economic changes introduced by Khrushchev were fairly minimal" (208) downplays the reverberating effects laid out for example by Keeran and Kenny in Socialism Betrayed: Behind the Collapse of the Soviet Union. Even if we call his changes minimal, even the short-term political or economic effects were not. What's all the more frustrating is Cockshott is clearly aware of the black market's influence on the consumer economy (207), but if Soviet policymakers had an excuse for downplaying it, then there's no excuse for this in hindsight. Cockshott rightly says Gorbachev went too far, but he was able to do so for reasons of earlier precedents.
In other respects, Cockshott's application of systems theory insightfully contextualizes an evolving situation:
With the notion of a socialist "subsystem" (think dual-power) in mind, consider:
"The long lags associated with any demographic feedback means that social relations may change considerably before the feedback takes effect." (227)
China's one-child policy was introduced to limit birth rates in an earlier, different economic context. That approach, combined with investment in China, put demand for workers in a position that raised wages significantly. Yet a declining-birth rate + declining-mortality rate trend, drifting toward an increase in older dependents, will require maternity-friendly reforms (he cites the former DDR's policies).
In short, as Soviet history also shows us, policies suitable for earlier stabilization will need to adapt in time to avoid "stability of the cadres" becoming lag or ossification. This applies beyond party membership to the society-at-large.
On that point, the latter parts of the chapter are a deep dive, using Eastern-bloc case studies, into the operation of value in socialist economies. Cockshott's key argument is that the 20th-century eastern European experiments demonstrate the indispensability of an esoteric interpretation of the law of value. In short, this socialist law of value expresses "the proportions in which the social workforce is distributed between different concrete activities" (262)---because only an accurate measure of labour value can avoid the distortions between relative prices and relative labour value that led to hoarding of workers by factories, overinflated estimates of cost of capital-intensive labour-saving technology, and the resultant bottlenecks, consumer-sector gluts, and shortages (257-259).
Ironically and revealingly, it was political factors limiting central planning that played no small role in later problems. Gorbachev and Yeltsin get passing mentions of obligatory disdain (again, see Keeran and Kenny's book) but of all people Gomulka of postwar Poland gets a shoutout. Cockshott, who visited the region in its socialist era, recalls the decades-lasting differences between on the one hand Poland, where Gomulka abandoned agricultural collectivization, and on the other hand socialist Bulgaria. Data shows "Bulgaria had a much smaller disparity between agricultural prices and agricultural values."(260) The combination of much more labour-intensive (time-consuming) smaller-scale agriculture in Poland and protests against raising controlled prices culminated in bare shop shelves in Poland but much less so in Bulgaria's socialist collectives.
In spite of problems, the tragic ironies in hindsight of the potentials in Soviet history are beautifully explored in the final chapter, while laying out requirements for a future model.
Chapter 7: Future Economies
In spite of aforementioned problems and technical limitations due to limited or absent computing power for planning purposes, Cockshott cites some examples of long-term rational planning in the Soviet economy that one can't help lamenting as bittersweet. The Energiya launcher, designed to launch orbital solar-power plants, and the massive multinational decades-long project for the ITER thermonuclear reactor, are two examples of the immense capacity for progress through long-term planning unconstrained by a need for immediate ROI in high-investment projects.
Cockshott isn't completely starry-eyed about the possibilities, arguing "the industrial mode of production that underlies both capitalism and socialism has its own inherent limitation." (288)
Nevertheless, "The implementation of a transition to a non-fossil fuel economy progresses most rapidly when the entire energy economy is publicly owned, as in China." (298) This has implications for transportation, among other key economic factors.
Finally, laying out principles for a future economic model:
"An economy that is publicly owned and planned using modern computer technology to handle the sheer volume of data…Within this model, the labour theory of value occupies a crucial position [allowing cost differential analysis]." (298)
"In our proposal people would be paid not in money but with non-transferable electronic work accounts…Goods in the shops would then be priced in hours, and the exchange principle is basically one for one." (298-299)
"Contrary to the dreams of futurists, human labour remains essential to the economy. It is humanity's fundamental resource limit." (299)
Ultimately, this book by a computer engineer is one of the most soberly materialist critiques of contemporary political economy I've yet had the pleasure of reading. I am in no way a mathematician and some of the formulaic presentation of linear regression takes a lot of focus and close reading and re-reading to follow, but if you have questions like, "How did farming start?", "Why didn't the Romans have an Industrial Revolution?", "Where are the flying cars and 15-hour work weeks we were promised?", or the ultimate question, "What might socialism look like?"...this is a must-read for you.
(Note: There are a couple of appendices to read which I might add thoughts on in the comments. I'm just getting this all down so I can revisit it afterwards.)
November 24, 2025
I really enjoyed this book. It starts by going through various stages of human society (hunter-gatherers, agriculture, slave economy, peasant economy, etc.) from a historical materialism point of view. Despite being familiar with the concept it was an eye-opening experience for me to read in-depth analysis of past modes of production.
When it starts talking about the capitalist economy, though, it changes the tone and tries to get into a lot of details. Even though the most interesting parts are about the capitalist economy (domestic economy and wage gap, energy, development of steam turbines), it felt like the author lost the structure and just wanted to tell everything. The book also gets very math-heavy in random places - like you're reading about the gender wage gap and BAM you're reading about probability density.
The chapter about socialist economies also had its highlights. One that stood out to me is the suppression of bread prices (way below its labor value) in Poland led by workers' political power. It looks like a good thing on the surface, but it hindered the development of agriculture and in the end led to shortages.
In the end, Cockshott reiterates some points from Towards a New Socialism about the possibility of a consensus-based planned economy with modern technologies and tries to predict some developments of the future society.
All in all definitely worth a read if you're into this kind of stuff.
When it starts talking about the capitalist economy, though, it changes the tone and tries to get into a lot of details. Even though the most interesting parts are about the capitalist economy (domestic economy and wage gap, energy, development of steam turbines), it felt like the author lost the structure and just wanted to tell everything. The book also gets very math-heavy in random places - like you're reading about the gender wage gap and BAM you're reading about probability density.
The chapter about socialist economies also had its highlights. One that stood out to me is the suppression of bread prices (way below its labor value) in Poland led by workers' political power. It looks like a good thing on the surface, but it hindered the development of agriculture and in the end led to shortages.
In the end, Cockshott reiterates some points from Towards a New Socialism about the possibility of a consensus-based planned economy with modern technologies and tries to predict some developments of the future society.
All in all definitely worth a read if you're into this kind of stuff.
January 31, 2020
Excellent book and something I would highly recommend to any Marxist or Materialist that wants to understand the history of labour throughout the world.
Cockshott starts in pre-capitalist times and describes the process of how this developed into eventually feudalism and then capitalism. He also analyzes the previously existing socialist states and the pros and cons of their systems.
However, the most important part was the future economic systems which is something more Marxists need to consider. Cockshott separates himself from the pack of most contemporary Marxist economists with this.
Cockshott starts in pre-capitalist times and describes the process of how this developed into eventually feudalism and then capitalism. He also analyzes the previously existing socialist states and the pros and cons of their systems.
However, the most important part was the future economic systems which is something more Marxists need to consider. Cockshott separates himself from the pack of most contemporary Marxist economists with this.
October 11, 2021
Excellent book I strongly recommend it!
June 15, 2020
How the World Works takes the reader through all the basic modes of production of human history — lengthy chapters each on “pre-class society,” slave economy, peasant economy, capitalist economy and socialist economy, plus a final brief chapter on “future economy” that revolves around the impending exhaustion of fossil fuels and the decrease in available energy that post-fossil fuel societies will likely face.
Highly interesting was a demonstration that agriculture required more work hours than did hunting-gathering and an answer to why the transition was made: hunters wiped out big game and the population of hunter-gatherers became too large for available land to support. The transition to agriculture enabled surpluses to be accumulated, and thus the beginnings of class stratifications.
In the chapter on capitalist economy, the book’s longest, it is argued that where capitalism differs from feudal and slave economies is far greater use of mechanical energy and scientific research. In contradiction to a commonly accepted theory that the use of slave labor in the Roman Empire prevented the primitive steam engine that was developed then from being introduced into production because using machines would have been much more expensive than continuing to use slave labor, Professor Cockshott argues that Hero’s turbine was vastly inefficient to be of any industrial use. Even the first steam engines of the 18th century were exponentially more powerful and could greatly expand industrial capacity. He argues that it was this new capacity that was the catalyst for industrial capitalism: “Existence of commodity relations and wage labor would not have been sufficient to generate the capitalist mode of production.”
Limitations on productive capacity were overcome with the rise of fossil fuels and in turn advances in technology arising from more efficient fossil fuels led to innovation and new products that beget more new products. In turn, the capital required to build and operate large industrial factories was beyond the reach of workers and previously independent artisans, forcing small independent producers out of business due to the scale of competition. “[T]he application of powered machines and fossil fuels allowed rising labor productivity that closed off whole branches of production from the self-employed artisan,” the author writes.
The chapter on “socialist economies” is likely to be the most controversial for many readers; certainly is was for myself. The chapter opens by noting, quite correctly, that there is no uniform definition of socialism. How the World Works argues that “as social scientists, we cannot judge the real world by the standards of an ideal one. It is not the job of reality to materialize our ideals. Reality just is in all its glories, horrors, and contradictions.” To that, there is nothing to do except agree. Material reality is what we have to go by.
Interpreting that reality, on the other hand, leaves room for debate. The book shoots down various theories of why the Soviet Union and the model it imposed on Central European countries wasn’t socialist, including that is used money, you can’t have socialism in a single country and there was scarcity rather than the plenty that socialism is supposed to provide. So far so good, although these arguments are presented in a somewhat cartoonish fashion rather than in their full complexity. Having ably dispensed with these arguments, and reiterating that there was a “common understanding” that those countries were socialist, the author offers his concept of what socialism actually is, based on what did exist.
Although he writes that “What distinguishes them are the forms of property and the way in which the surplus product is determined,” he concludes that socialism is characterized by machine industry and agriculture, the same as capitalism. His definition rests on, inter alia, a mix of technical achievements such as “widespread use of electricity” and “widespread use of machinery and applied science” interspersed with social relations such as “the absence of a class of wealthy private proprietors” and “public or cooperative ownership of most of the economy.”
To be sure, claims that the Soviet Union was “capitalist” is ultra-left phrase-mongering that sheds little light. But is socialism simply expropriation and building industry? If so, then one would have to agree with Josef Stalin’s boast in the 1930s that socialism had been built and Nikita Khrushchev’s follow-up boast in the 1950s that the Soviet Union was in the process of building communism, the successor to socialism. But is that all there is? A fuller definition of socialism mandates that democracy be extended to economic matters and strengthened in political matters, beyond what is possible in capitalism. It would follow then that expropriating capitalists and establishing state or cooperative ownership of most of the economy is a precursor to socialism, not the actual content in itself.
The foregoing were not the only disagreement I had with the book, but disagreements are inevitable in a book so full of interesting ideas. What is pertinent is stimulation of thought and the challenge of worthy ideas. A book that intends nothing less than to reveal the workings of the world from the earliest prehistory to the present day and beyond has set itself a sweeping goal. How the World Works succeeds marvelously.
(A full review of this book can be found at this link.)
Highly interesting was a demonstration that agriculture required more work hours than did hunting-gathering and an answer to why the transition was made: hunters wiped out big game and the population of hunter-gatherers became too large for available land to support. The transition to agriculture enabled surpluses to be accumulated, and thus the beginnings of class stratifications.
In the chapter on capitalist economy, the book’s longest, it is argued that where capitalism differs from feudal and slave economies is far greater use of mechanical energy and scientific research. In contradiction to a commonly accepted theory that the use of slave labor in the Roman Empire prevented the primitive steam engine that was developed then from being introduced into production because using machines would have been much more expensive than continuing to use slave labor, Professor Cockshott argues that Hero’s turbine was vastly inefficient to be of any industrial use. Even the first steam engines of the 18th century were exponentially more powerful and could greatly expand industrial capacity. He argues that it was this new capacity that was the catalyst for industrial capitalism: “Existence of commodity relations and wage labor would not have been sufficient to generate the capitalist mode of production.”
Limitations on productive capacity were overcome with the rise of fossil fuels and in turn advances in technology arising from more efficient fossil fuels led to innovation and new products that beget more new products. In turn, the capital required to build and operate large industrial factories was beyond the reach of workers and previously independent artisans, forcing small independent producers out of business due to the scale of competition. “[T]he application of powered machines and fossil fuels allowed rising labor productivity that closed off whole branches of production from the self-employed artisan,” the author writes.
The chapter on “socialist economies” is likely to be the most controversial for many readers; certainly is was for myself. The chapter opens by noting, quite correctly, that there is no uniform definition of socialism. How the World Works argues that “as social scientists, we cannot judge the real world by the standards of an ideal one. It is not the job of reality to materialize our ideals. Reality just is in all its glories, horrors, and contradictions.” To that, there is nothing to do except agree. Material reality is what we have to go by.
Interpreting that reality, on the other hand, leaves room for debate. The book shoots down various theories of why the Soviet Union and the model it imposed on Central European countries wasn’t socialist, including that is used money, you can’t have socialism in a single country and there was scarcity rather than the plenty that socialism is supposed to provide. So far so good, although these arguments are presented in a somewhat cartoonish fashion rather than in their full complexity. Having ably dispensed with these arguments, and reiterating that there was a “common understanding” that those countries were socialist, the author offers his concept of what socialism actually is, based on what did exist.
Although he writes that “What distinguishes them are the forms of property and the way in which the surplus product is determined,” he concludes that socialism is characterized by machine industry and agriculture, the same as capitalism. His definition rests on, inter alia, a mix of technical achievements such as “widespread use of electricity” and “widespread use of machinery and applied science” interspersed with social relations such as “the absence of a class of wealthy private proprietors” and “public or cooperative ownership of most of the economy.”
To be sure, claims that the Soviet Union was “capitalist” is ultra-left phrase-mongering that sheds little light. But is socialism simply expropriation and building industry? If so, then one would have to agree with Josef Stalin’s boast in the 1930s that socialism had been built and Nikita Khrushchev’s follow-up boast in the 1950s that the Soviet Union was in the process of building communism, the successor to socialism. But is that all there is? A fuller definition of socialism mandates that democracy be extended to economic matters and strengthened in political matters, beyond what is possible in capitalism. It would follow then that expropriating capitalists and establishing state or cooperative ownership of most of the economy is a precursor to socialism, not the actual content in itself.
The foregoing were not the only disagreement I had with the book, but disagreements are inevitable in a book so full of interesting ideas. What is pertinent is stimulation of thought and the challenge of worthy ideas. A book that intends nothing less than to reveal the workings of the world from the earliest prehistory to the present day and beyond has set itself a sweeping goal. How the World Works succeeds marvelously.
(A full review of this book can be found at this link.)
December 6, 2022
An impressive analysis of how human society has changed and evolved from hunting and gathering to modern capitalism from the standpoint of work. Easy to read except for some quite complicated mathematical formulas (though they are explained at length). An accessible application of historical materialism, definitely worth reading to learn about why things happen, and why they change in the ways that they do
September 13, 2024
I found great answers for my questions in this book. First I thought it's a massive 500+ pages book, but in fact it's much thinner. Paul as an academic or shouldn't say economic scientist put phrases in a concise and straight on point manner. I found myself learning more from a few pages than entire chapters or books by other authors. I admit I entirely skipped the communistic economics part which is like 30%of the book as I found it purely theoretical and I was looking for some other aspects from this book. That's why only 4 star.
July 20, 2021
The 'How World Works' is a bit overambitious title, and this book does not deliver quite that. It is an analysis of economic systems. Namely, slavery, feudalism, capitalism and socialism. First two have a short introduction while latter two had more attention addressed. But even in those two it didn't get much in depth, regarding the title. It writes only about some aspects of these systems. The most interesting premise in the book is explaining economy through workforce regeneration.
July 19, 2021
Claro, preciso e com bons exemplos históricos, o Dr. Cockshott volta a brindar-nos com uma obra genial. Sendo este um livro de economia ter por pressuposto um certo nível de conhecimento matemático e político.
April 9, 2024
It's Marxism from the perspective of a computer scientist. What's not to love?
July 20, 2025
good shit
August 31, 2022
Great book on the history of social formations from the standpoint of how different societies reproduce themselves. Cockshott takes the term 'social reproduction' quite literally, he starts from physical principles and shows the energetic basis of different societies. He reviews hunter-gatherer, slave-owning, feudal, capitalist and socialist societies. Also some analysis on future possibilities of socialism and what mistakes future socialist experiments must avoid (inflationary policies undermining exchange at labour values).
I'm not 100% convinced about the labour theory of value that Cockshott susbscribes to but this book is a more convincing presentation of it than most Marxist economics, as Cockshott is much more rigorous and quantitative than most M'ist authors.
A small issue with the book is the poor quality of the graphs - this should be improved imo.
I'm not 100% convinced about the labour theory of value that Cockshott susbscribes to but this book is a more convincing presentation of it than most Marxist economics, as Cockshott is much more rigorous and quantitative than most M'ist authors.
A small issue with the book is the poor quality of the graphs - this should be improved imo.
September 2, 2022
Fantastic, succinct and modern description of the development of production from the beginning of agriculture, to speculations on a socialist society. A bit of moralising in the section on sex-work, but I see his point. Nonetheless, still an informative read.
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