Mayo Toruno's Book

["RICHARD P.F. HOLT" <holtri@xxxxxxxxxxxxx>]

Gary Langer mentioned Mayo Toruno's book _The Political Economics of
Capitalism_ as a book to look at for an intro class. What I've read
I think it is a very good and many ways an important book. Enclosed
is the preface of the book which is in the pkt archives. The archives
also has chapter one of the book for those who would like to learn
more about the book. At the end of the preface is information on
how to get a copy of the book which is consistent with pkt's policy
of allowing authors who subscribe to the list an opportunity to provide
information of how pkters can get copies of their work.
-Ric Holt
	

Reprinted with permission from Mayo C. Toruno, THE POLITICAL ECONOMICS OF
CAPITALISM, copyright 1994 by Kendall/Hunt Publishing Company.


                             PREFACE

     I originally embarked on this project with the idea that I could provide
my students with a relatively straightforward rendition of the concepts
normally covered in a microeconomics course, but from a slightly heterodox
perspective.  Instead of the usual sequence of ideas, I would start off with a
broad overview of the classical, or surplus, approach, and then go on to the
theory of the firm, cost and pricing, the competition for profits, and labor
markets.(1)  All of this would be carried out within the context of the
classical notion of social reproduction.  Utility maximization would be
dropped in favor of a story that acknowledged the social context of
consumption.  The firm would be treated as a structure of power intent on
conquering markets and extracting work from laborers.  The theory of
production would be amended to account for work intensity, while variable
costs would reflect the reality of fixed proportions.  Finally, workers would
be treated as providers of labor power with little ability to engage in a
labor-leisure trade-off.
     This approach would provide me with a framework that I find more
congenial, while at the same time allowing me to cover demand and supply, cost
curves, market structures, elasticity, and so on.  I would be able to cover
the technical material normally taught in a principles course without having
to provide a neoclassical rendition of these ideas.  But, as the book
progressed it became evident that such an endeavor would require a discussion
of the macroeconomic underpinnings of the system, as well an explanation of
the institutional setting of capitalist societies.
     As a result, the structure of the book had to be altered.  Originally it
was supposed to be not much more than what is currently in part II of this
text.  But, the need to provide a discussion of the institutional setting led
me to the development of part I.  The need to provide an appropriate
macroeconomic context led to the development of part III.  Thus, the current
version.
     In addition, there were other, perhaps stronger, motivations driving my
efforts.  I needed to clarify the manner in which the various strands of
heterodox political economy could be integrated into a relatively coherent
view of capitalism.  I wanted a perspective that was capable of addressing
most of the technical issues generally covered in a principles course, but
from a more appropriate perspective.  This book reflects my efforts in this
regard.  I have tried to weave a story that relies on the common ground
occupied by Institutionalists, Post-Keynesians, Neo-Marxists, and Neo-
Ricardians.
     The title of the book requires a few words.  By political economy I mean
a perspective that accounts for the historically determined institutional and
technological context of economic behavior.  Economic behavior is a social
activity.  Additionally, it is political in the sense that economic
institutions determine who gets what and why.  The manner in which a society
goes about producing and distributing the requisites of life is intimately
tied into the value system of that society and the distribution of power that
permits those values to remain in place.  Thus, economic institutions are
structures of power that reflect the values of those who benefit from them.
     It is in this sense that this book examines the political economics of
capitalism.  The idea is to understand the characteristic economic outcomes,
the laws of motion, of capitalism as a political economic system.  Beyond
this, there is very little in the way of prescription.  The book does not
offer a recipe or program for change.
     Part I of the book introduces the student to the importance of the
survival imperative as an organizing principle of economic behavior.  Within
this context, the concept of the surplus is introduced and its significance
for economic growth explained.  Capitalism is defined within the context of a
discussion of commodity producing societies.  The distribution of income and
wealth is explained.  A classical interpretation of the role of markets is
introduced.  The political relationship between government, capitalists, and
workers is outlined.  A transactions matrix is used as a vehicle to explain
the structure of production.  This same format is used to explain the core and
periphery of the economy.  A wage-profit curve is introduced and then used to
explain how wages and profits are affected by a change in the social structure
of accumulation.
     Part II starts off with an explanation of socially necessary
consumption.  Household consumption is explained in terms of a hierarchy of
needs.  In the discussion on cost, the importance of work intensity and its
relation to work efficiency is introduced.  A distinction is made between
firms whose unit cost reflects fixed proportions (all of the firms in the
secondary sector and most of those in the tertiary sector), and firms whose
unit cost reflects diminishing returns (firms in the primary sector).  Most
firms are price setters and use mark-up pricing.  The size of the mark-up is a
function of the firm's degree of monopoly power.  Firms are always trying to
manipulate the demand for their product, while at the same time continually
competing with each other.  This competition is closely tied to the process of
capital accumulation.  The employment contract is viewed as open ended, with
firms seeking to extract labor from labor power.
     Part III introduces the student to a Post-Keynesian treatment of
effective demand.  Inflation and unemployment are treated as outcomes of class
struggle, battles over income shares.  On the whole, the money supply is
treated as an endogenous variable.  A horizontal money supply curve is
introduced.  Investment is viewed as causal to saving.  And government is
explained as an institution that reflects the distribution of economic power.
As a result, full employment policies are seldom seriously entertained.

FOOTNOTES
     1.  The mainstream sequence starts off with production possibilities,
opportunity cost and scarcity, and then proceeds, after a brief review of
demand and supply analysis, to cover the neoclassical theory of the consumer
and the firm, product market structures, and finally resource markets.

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ORDER INFORMATION SHOULD BE INCLUDED IN THE FOLLOWING FORM:
     "The Political Economics of Capitalism", by Mayo Toruno 1994/ 328 pages/
     paperback/ $37.56 net price/ ISBN 0-8403-9731-3.
     Orders may be placed by calling Kendall/Hunt Publishing Company at 800-
     228-0810/ faxing 800-772-9165, or by writing to Customer Service
     Department, Kendall/Hunt Publishing Company, 4050 Westmark Drive, P.O.
     Box 1840, Dubuque, IA 52004-1840.