Economics and Power: A Marxist critique, 1st Edition (Hardback) book cover

Economics and Power

A Marxist critique, 1st Edition

By Giulio Palermo


168 pages | 2 B/W Illus.

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In the economic debate, power is defined and studied mainly as an interpersonal relation occurring out of perfect competition. This is a consequence of the combination of methodological individualism and the assumption of competition as a natural and everlasting coordinating mechanism, operating without any sort of coercion. This methodology, however, is not adequate to analyze the forms of social coercion that characterize capitalism.

Economics and Power criticizes the main theories of power developed in economic literature, analyzing ultraliberal contractualism to radical political economics, and ultimately suggesting a Marxist conception of power and coercion in capitalism. Palermo’s ontological argument is rooted in the philosophy of ‘critical realism’.This unique volume presents his main finding as being that the essential coercive mechanism of capitalism is competition. Capitalist power is not caused by a lack of competition, but by the central role it plays in this mode of production. Following this, the chapters reconstruct a Marxian conception of power where it is analyzed as a social relation and argues that perfect competition does in fact exist under the disguise of capitalist power. This book criticizes the construct of power and the underlying ideas surrounding perfect competition.

This book is of interest to those who study political economy, as well as economic theory and philosophy.

Table of Contents

Foreword and acknowledgements

1. Introduction

The dimensions of power in social sciences

The unidimensional view of power in economics

Methodological choices and ontological necessities

Historical materialism, exploitation and social coercion

Marx's critique of capital and the critique of power

Structure of the book



2. The economic debate on power

The contractual approach of Alchian and Demsetz

Williamson's transaction costs economics

The property rights approach of Hart and Moore

The radical political economics of Bowles and Gintis

Golfberg's institutional perspective

The terms of the debate

3. Power and post Walrasian economics

Post Walrasian economics

From Walrasian to post Walrasian economics

The theoretical results of Walrasian economics

The role of perfect competition in the debate on power


4. Power demystification

The categories of post Walrasian economics

As-if economic history

History and efficiency

Free contracting, imperfections and class relations

Exchange without production

Production, circulation, and the free trader vulgaris

Scientific research and cultural hegemony




5. Marx’s critique of capital and competition

Competition in Marx's work

Total social capital and competition between individual capitals

The origins of competition

Competition and the contradictions of capital

The development of competition and the process of capital subsumption

Association against competition

The end of competition

Bourgeois economics and the myth of perfect competition


6. Capitalism as a system of power

Critical realism

Critical realism and Marxism

The ontology of power

The ontology of capitalist power


7. Final remarks

Scientific goals, methodology and ontology

Formal similarities within opposite conceptions

Economists as servant of power

Reorienting the struggle

About the Author

Giulio Palermo is Researcher in Economics at the University of Brescia, Italy.

About the Series

Routledge Frontiers of Political Economy

In recent years, there has been widespread criticism of mainstream economics. This has taken many forms, from methodological critiques of its excessive formalism, to concern about its failure to connect with many of the most pressing social issues. This series provides a forum for research which is developing alternative forms of economic analysis. Reclaiming the traditional 'political economy' title, it refrains from emphasising any single school of thought, but instead attempts to foster greater diversity within economics.

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Subject Categories

BISAC Subject Codes/Headings:
BUSINESS & ECONOMICS / Economic History
BUSINESS & ECONOMICS / Economics / Theory