Social Structures of Accumulation: A "Punctuated" View of Embeddedness

By McDonough, Terrence | The American Journal of Economics and Sociology, November 2011 | Go to article overview

Social Structures of Accumulation: A "Punctuated" View of Embeddedness


McDonough, Terrence, The American Journal of Economics and Sociology


By now it is almost uncontroversial that the capitalist economy is embedded in a range of institutions. Further, it is recognized that the market economy cannot function without the effective functioning of its embedding institutions. This insight is, of course, one of the founding principles of the Institutional school of economics. Marxian economics has always seen capitalism as an historical mode of production in a complex dynamic relationship with various institutional conditions of existence at the economic, political, and ideological levels. Post Keynesian economics is rooted in the recognition of the essential importance of money and accompanying financial institutions, demand and consumption, and the institutional responses to the inevitable uncertainty of economic decision-making. Even the neoclassical mainstream has interpreted the failure of "shock therapy" in Eastern Europe as due to insufficient attention to the institutional context of markets.

Thus it is widely accepted within economics that capitalism exists in relationship to a number of conditioning institutions. (1) It would be possible to adopt a strictly static approach to this relationship. Indeed, there is a strong temptation within some wings of the neoclassical, Post Keynesian and Marxian tradition to conceptualize capitalism in a "pure form" and then conceptualize the somewhat invariant institutional preconditions that must accompany this pure form. This facilitates both mathematical modelling and the hypothesizing of teleological trajectories to optimal equilibrium in the case of the neoclassicals, to socialist transition in the case of some Marxists. Nevertheless, much of the theorizing about embeddedness in economics assumes that institutions change over time and that this change contributes to the creation of a more concrete history of capitalist development than more abstract theoretical models allow. Thus both the embeddedness of capitalism in social institutions and a development of this relationship over time are widely accepted. (2) The question I wish to address is whether or not it is possible to say something more specific than this about the relationship between capitalism and its institutional environment.

I will situate the proposed answers within the Marxian tradition and more specifically within the Marxian tradition of stage theory. Marxism was never proposed primarily as a theory of what we characterize today as "economics." Rather, it was a theory of history in general with a "political economic" aspect of that history, the class struggle, as its principal dynamic force. (3) Thus Marxism is a significant current in historiography and Marx is widely regarded as one of the founders of both modern sociology and political science. A comprehensive presentation of cultural studies cannot afford to ignore the Marxian tradition. Arguably, the bulk of the work in the Marxian tradition exists outside of efforts to further Marx's treatment of the economy strictly speaking. (4)

Thus a concrete consideration of the capitalist mode of production quickly becomes a consideration of the broader "social formation," including its political, ideological, and cultural aspects. Marx himself had at one time included a volume on the state as one of the six-book plan for what later became the series on Capital. Wolff and Resnick (1987) have elaborated a conception of subsumed classes, groups characterized by the supply of one of the conditions of the capitalist class process. This includes political and ideological conditions, thus bringing the institutional embedding of capitalism into class analysis itself. The Marxian tradition of capitalist stage theory brings these factors into the heart of the Marxian analysis of the capital accumulation process.

There is a fundamentally continuous tradition of Marxian stage theory from the beginning of the 20th century until the present day. The Marxian stage theory tradition is intimately linked to turning points in the historical process of capital accumulation. …

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Social Structures of Accumulation: A "Punctuated" View of Embeddedness
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