Marx, Veblen, and Contemporary Institutional Political Economy: Principles and Unstable Dynamics of Capitalism

Citation

Elsner, W. (2002), "Marx, Veblen, and Contemporary Institutional Political Economy: Principles and Unstable Dynamics of Capitalism", International Journal of Social Economics, Vol. 29 No. 12, pp. 989-990. https://doi.org/10.1108/ijse.2002.29.12.989.1

This book is a compendium of what can be and, indeed, is called “contemporary institutional political economy”. O’Hara constructs and elaborates the basic principles, relevant models, and applications of modern, radical institutional economics that stem from the major strands of institutional analysis and political economy, i.e. Marxian political economy and Veblenian institutionalism. There are an increasing number of economists who are working to merge Marxian polictical economy and Veblenian institutional economics, and O’Hara neatly refers to them according to their affiliated associations (e.g. AFEE, URPR) and journals.

However, rarely have the paradigms been as thoroughly and comprehensively reconstructed as in O’Hara’s book. O’Hara succeeds in distilling and reconstructing from Marx’s political economy the elements needed (such as the institutional research interests, basic problems, questions and theoretical propositions) to make the Marxian paradigm communicable with modern (neo‐) institutionalism. Similarly, the reconstructs Veblen’s work as it, too, pertains to a materialistic political economy of production, distribution, class structure, and dynamics. The process of incorporating Marxian and Veblenian elements require O’Hara to re‐evaluate Veblen’s criticism of Marx as a classicist adhering to the “naturalistic” world view typical for some classical and mainly of the neoclassical writers.

The result of O’Hara’s effort is an outline of an institutions‐centered, evolutionary political economy which pertains to the material life process, the reproduction of capital, and the related social and cultural (contradictory) dynamics of a capitalist socio‐economy. The elaboration includes an extended conception of capital to include forms of human, natural and social‐institutional aspects. O’Hara’s institutional analysis, thus, acts as an anchor for a comprehensive analysis of the core areas of contradictory dynamics of capitalism.

The second part of the book provides a theoretical and methodological basis for modern neo‐Marxian‐neo‐institutional political economy. This basis is then applied to those dimensions and the dynamics of capital, and – (most relevant) also to the overall “macro” institutional performance and dynamics of the system. Here, also, a normative system of macro‐performance values and indicators is developed and the institutionalist theory of institutional change and, specifically, of ceremonial encapsulation is extended.

If the book had ended here it could already be considered a major contribution to the current institutional political economy literature. However, it continues with a third part which contains applications of the principles and models to the areas of growth and innovation, Fordist accumulation, the world economy and hegemonic world order, labor and family structures, the welfare state, and the financial system – and the related institutional dynamics in each. The book ends with O’Hara’s assessment of future prospects for contemporary global capitalism and its institutional tensions, contradictions and dynamics and with an outline of options for a reform agenda that applies the value principles of contemporary institutional political economy developed in this book.

It could be argued that this book tries to do too much by including empirical applications of the paradigm developed in the earlier sections. So the book seems, at times, to lack focus as being either a thorough construction of a contemporary institutional political economy or an applied analysis of the institutional dynamics of contemporary global capitalism. Also, the book refers a little too narrowly to the respective groups and journals of AFEE and URPE and small groups of radical institutionalists and institutionalist radical economists.

However, even taken as a theoretical book, alone, it is certainly one of the major advancements in institutional economics and in political economy in recent memory.