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International Socialism, Autumn 2009


Christakis Georgiou

A welcome overview


From International Socialism 2 : 124, Autumn 2009.
Copyright © International Socialism.
Copied with thanks from the International Socialism Website.
Marked up by Einde O’Callaghan for ETOL.


Bill Dunn
Global Political Economy: A Marxist Critique
Pluto, 2008, £19.99

Political economy is as old as capitalism itself. It emerged in the late 18th century and its object of study was the way capitalist production and exchange were to be organised on a national scale – hence its name, derived from the Greek word oikos meaning the household and polity to denote the state’s central role in the organisation of these activities. Originally, then, thinkers such as Adam Smith – one of the founding figures of economic liberalism – did not distinguish between the spheres of economics and politics in the way that contemporary neoclassical economics and rational choice theories of political science do.

With the development of industrial capitalism in the 19th century and the subsequent development of an organised labour movement, some of the central tenets of classical political economy such as the labour theory of value, especially the version of it developed by Marx, became ideological weapons in the hands of those who were challenging the existing order.

In the face of this, a new school of thought emerged in the 1870s – the marginalists, whose aim was to rid the study of capitalism from its associations with politics and to give it an apparently objective and scientific character. Their main representatives, such as Eugen von Bohm-Bawerk, Frank Fetter or Stanley Jevons (who recommended replacing the term political economy with “economics”), each made the point that classical political economy had evolved to become a potential weapon in the hands of radical critics of capitalism.

The legacy of the “marginalist revolution” is the fragmentation of the academic study of society. This legacy is so powerful that for a long time little space existed in universities for alternative or critical approaches. This was reinforced during the post-war period by the long spell of economic expansion of the 1950s and 1960s.

The end of the boom, however, created new space for approaches that sought to reintegrate politics and economics, not least because the crisis seemed to have been caused by overtly political events such as the creation of Opec and the oil price spikes. Political economy regained ground in the 1970s. The argument about the separation of politics and economics is not simply an academic one. Neoliberal policy-making has been legitimised by such arguments. Perhaps the most striking example is the argument for the virtue of independent central banks because of the alleged necessity to protect “technical” decisions from “political” influence. The counter-arguments have a political importance, therefore, because they attack one of the foundations on which neoliberalism has been developed.

Bill Dunn’s book attempts to provide a Marxist overview of the debates that have punctuated the development of this discipline during the past 30 years or so. The book’s scope is vast and this is both its strength and its weakness. It covers a huge amount of material and addresses a large number of debates. As such, it is a brilliant introduction to the debates raised by the study of capitalism. However, for the same reason, some of the issues are only insufficiently covered or are discussed in a way that requires some familiarity with the subject.

In the first of the three sections in the book, Dunn starts off with a discussion of the shortcomings of liberalism both in terms of the discrepancy between its theoretical models and the world as it really exists, and the methodological individualism on which it is founded. Dunn shows how liberalism managed to adapt to changing social circumstances, especially during periods of crisis, and how each time it served to legitimise the status quo.

Dunn then considers realism and institutionalism – two traditions that challenge liberalism’s claim that capitalism is a harmonious system of self-regulating markets by trying to incorporate power into their analyses. But both of these traditions fail to integrate questions of class and class antagonism in a consistent way. The following chapter is dedicated to more critical approaches such as constructivism, green political economy and feminism, whose main contribution has been to push political economy beyond the simplistic dualism of states versus markets and to bring under examination issues that traditionally would not feature in economic or political analysis.

The final chapter in this section deals with “Marxisms”, with the plural referring to debates that have divided Marxists. The chapter’s main concern is to refute the accusation of structural determinism that has so frequently been thrown at Marxists.

The second section of the book deals first with the transition from feudalism to capitalism and the historical development of the system. It shows how the various stages of development were the product of the dynamic of capitalist development. The last chapter of this part discusses the post-war boom and US hegemony.

The third section deals with some of contemporary political economy’s favourite themes and deconstructs many myths about the world economy. [1] So, for example, concerning production, “the evidence does not support characterisations of a runaway world of manufacturing relocation from rich to poorer countries”. Regarding international trade, Dunn shows that “neither openness nor closure are unqualified goods” and that global poverty cannot simply be attributed to free trade and hence that “opposition to free trade alone does not adequately challenge the roots of global inequalities and poverty”.

The chapter on finance provides evidence to counter-claims that “finance trashes state powers to tax and provide welfare” and argues that “financial globalisation should be seen firstly as a political achievement”. The role of labour in the “new economy” is also considered and Dunn argues that “recent transformations do not require new conceptualisations nor do political strategies have to be re-imagined from scratch”. In a particularly interesting chapter entitled The Political Economy of the Non-Economic Dunn considers a series of issues that are excluded by mainstream economics because they escape commodification, such as the natural environment, non-commodified forms of work or the alienation generated by the organisation of the labour process.

It is the third section that forms the lengthiest and in many respects the most valuable part of the book. The patterns of inter-imperialist rivalry that have emerged since the mid-1970s and the collapse of Stalinism could have been covered in more detail in this section. The final chapter of the book is dedicated to debates about “global governance” and the “new imperialism” but it only considers the various Marxist theories without providing the same breadth of empirical material given in other chapters.

Despite some weaknesses stemming from the vast amount of material that the author engages with, this book is a brilliant introduction to debates that have animated Marxists and provides a strong critique of alternative approaches to the study of capitalism. It is recommended reading to anyone, student of political economy or otherwise, who wishes to gain an overall understanding of the way capitalism has developed and of the position it finds itself in.

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1. As he did in his article in International Socialism

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