Geoffrey M. Hodgson
Economics and Utopia: Why the learning economy is not the end of history
Routledge, St. Ives, 1999, pp.337. ISBN 0-415-07506-8 (hbk) 55.00 ISBN 0-415-19685-X (pbk) 17.99 This is a book that deserves to be widely read, and should be by anybody with an interest in the discipline of economics. It is an ambitious work that seeks to question the current state and direction of the subject, and raises questions which the current mainstream of economics does not even consider. In some ways it is a return to topics that have been the concern of economists in the past, but it is a book that is very much concerned with the future. It challenges the Fukuyama `End of History hypothesis and suggests economies are not static but dynamic. History then, does not end. Hodgson is concerned with the processes of change, and considers future possible social organisation.
The main theme of the book is that the `desired utopias of both the traditional left and of the neo-liberal right are unfeasible' (p.9). The claim is that both of them fail to understand the role of knowledge and learning in a modern economy. `History has no pre-ordained path' (p.10) and there are a number of directions in which evolution could take capitalism. So, Hodgson does suggest that capitalism will evolve into something else and then goes on to explore the possibilities.
Clearly mainstream economics with its equilibrium analysis cannot analyse dynamic change. The starting point for this book is Marx, and the preface to the book states, `Capital remains one of the greatest achievements in economic theory since Adam Smith' (p.xviii). However, although influenced by Marx, this is an institutionalist rather than a Marxist analysis. The ambitious aim is to transcend Marx. Clearly this aim will not appeal to the committed Marxist, but even they should find the book challenging and thought provoking.
The book is split into three parts. Parts one and two are a critique of the traditional approaches of both left and right, and an introduction to institutional economics. In part three possible future directions are considered. The left will find much more to agree with than the right, but a major point of disagreement is likely to be the definition of socialism that is used. Hodgson sees 'traditional' socialism as being synonymous with central planning, which is perhaps questionable, especially in a book entitled Economics and Utopia. It seems to confuse a method of attempting to achieve a socialist utopia with the vision of that utopia. The writer does quote Polanyi in the book and so he must be aware of his more elegant definition of socialism as a system that seeks the primary of the social system over the economic system, rather than vice versa, as occurs under capitalism. However, equating socialism with central planning does make it an easier target.
It is the attempt to transcend Marx though, that is particularly interesting. The analysis has much in common with that of Marx, but departs from it in two important ways. The first is concerned with Marx's belief that `commodity and market relations could grow to the eventual exclusion of all non-capitalist features' (p. …