Research in the History of Economic Thought and Methodology: Including a Symposium on David Gordon: American Radical Economist: Volume 40A

David M. Gordon advanced labour economics with his theory of labour market segmentation, in which jobs rather than the marginal productivity of individual workers were the unit of analysis. He advanced economic historiography and macroeconomics by conceptualising social structures of accumulation – a framework built on the foundation of his institutionalist training and enriched by his study of Marxist economics. By appropriating methods from other social science disciplines into econometrics, he augmented empirical analysis in economics. He was a founding member of the Union of Radical Political Economics and its journal, the Review of Radical Political Economics – that advanced and promoted heterodox, radical, and Marxist economists in the United States. His contributions to economics, to organised labour, and to the New School for Social Research, where I studied with him, were stunning.

Part 1 lays out some context about the New School Graduate Faculty where Gordon taught. Part 2 explores what historical forces, including his family, led to his expansive creativity. Part 3 summarises how he expanded labour economics to include the relations as well as the technology of production, linked his understanding of the production process to a historical materialist view of labour in the United States, then extended that to econometric analyses of the US macroeconomy. Part 4 presents a bibliometric analysis to provide some idea of the impact of his work. I end with some concluding remarks.

David Gordon’s early work included a focus on cities and their role in capitalist development, but he didn’t complete or publish an ambitious project called CAPITALopolis. Gordon instead developed a framework linking Marxian insights with historical analysis of institutional impact and change through his social structures of accumulation framework. Subsequent mainstream and radical urban analyses didn’t use Gordon’s work, but his early writings are consistent with his passion for fighting racial and economic inequality, and understanding those forces systematically as part of the history and logic of capitalism.

David Gordon was, at once, a highly creative economist with an enormous range of interests, while also uncompromising in maintaining rigorous research standards. He focused equally on hard-core academic research and pressing policy issues. He was also openly committed to the political left, with this commitment animating all his work. One distinctive feature of Gordon’s work was his keenness to dive into the most important topics engaging mainstream economists and to inject explicitly left political economy perspectives into these mainstream debates. This paper focuses on two important examples of Gordon’s contributions that examine front-and-center mainstream macroeconomics questions. The first is the relationship between aggregate saving and investment. The second is the development of the concept of the “natural rate of unemployment.” The evolution of mainstream research on these two questions played a critical role in overturning what had been, over the first two post-World War II decades, a prevailing Keynesian/social democratic consensus, at both the levels of analytic economics as well as economic policy. As the paper reviews, Gordon challenges the analytic findings and policy implications of these perspectives at their core. Gordon’s own basic premises and results are straightforward. He argues that, in fact, investment decisions, not saving rates, are the main driver of economic activity in capitalist economies and that operating capitalist economies at something akin to genuine full employment – that is, in the range of 2–3 percent official unemployment – is a realistic goal. As such, these papers by Gordon contribute significantly toward envisioning a post-neoliberal social structure of accumulation that is committed to the egalitarian principles that were central to Gordon’s life work.

This chapter synthesizes two complementary streams in the economic thought of David M. Gordon, and explores their shared relevance to the rise of the “gig” economy in modern economies. Gordon made lasting contributions to the radical political-economic analysis of work and employment. At the microeconomic level of individual workplaces, he and his collaborators originally explained the factors affecting employers’ labor extraction strategies, through which they seek maximum work effort from waged employees while minimizing unit labor costs. At the macroeconomic or structural level, he linked that conflictual process to the broader institutional and structural features of the overall accumulation regime which is essential to any successful incarnation of capitalism. Employment practices and social structures have evolved considerably since Gordon’s passing, but his insights are still useful in understanding the rise of, and limits to, modern work arrangements. In particular, Gordon’s dual portrayal of the parameters of labor extraction, and their positioning within a broader structural and institutional context, provides a convincing explanation of both the recent rise of gig economy practices, and their potential limits.

Modern scholars of the history of economic thought recognise that John Bates Clark’s earlier works bear far less formal abstraction and, instead, fervently appeal for economic reforms that are inspired by Protestant ethics and German Historicism. After the violent Haymarket incident in Chicago in 1886, Clark is assumed to have entirely dismissed his preoccupation with social reforms and ethics. We provide a counterpoint to this common understanding by finding out that Clark’s originally ethical impetus persists throughout his writings beyond Haymarket. The striking parallelism of his earlier ideas on moral progress and the role of Protestant ethics herein and his later model of natural evolution and entrepreneurial change allow us to characterise Clark’s economics as persistently reformative in character. Further, his application of marginalism must not be understood as purely deductive analysis. Instead, it shows the ideal of an economy that performs analogously to a coherent organism. Clark’s theory of value and distribution is found to build substantially on his reformative claim that the American economy should be founded on a principle of equal and voluntary exchange. This republican idea of the economy is integrated into an ontological reflection of the very preconditions of social wealth.

Adam Smith recognized that slavery, despite its economic disadvantages, was the rule rather than the exception in the eighteenth-century commercial society. How did he explain the massive employment of enslaved Africans in the American and Caribbean colonies? Several scholars have been highlighting that Smith attributed the persistence of slavery to an almost natural inclination of humanity toward tyranny and dominion. However, the mere reference to the love of domination is not enough to fully answer the question above. This paper addresses another feature of Adam Smith’s account of Atlantic slavery: the relation between the love of domination and the mercantile policies regulating colonial trade. We conclude that Smith saw the extraordinary profitability arising from such policies as an enabling condition to the massive employment of slave labor in the sugar and tobacco colonies.

Many scholars have reflected on Ricardo’s comparative advantage theory, but little has been said about Yoruba economic thoughts, especially in the exchange and distribution of articles of trade. Prior to the arrival of the Europeans and their activities in the economy of Yorubaland in the pre-colonial period, communities had traded in local, distant markets and across frontiers with neighbours in exchange for products different to the ones they produced. This happened because different towns had specialised in the production of articles which were environmentally suitable to it. Soil fertility, dictated by environmental factors, was a determining factor in what was produced, as agriculture was essentially the predominant economic activity. Textile industries were also established which equally stimulated long-distance trade as specialised clothes were made for export to neighbouring regions. A number of Yoruba towns have been selected for this analysis. The work presents Yoruba economic thoughts and initiatives, and the activities of the indigenous people in the pre-colonial period in Yorubaland and critically assesses the articles which different towns produced for export to other cities and kingdoms in Yorubaland and beyond. Primary source in form of interviews were conducted, proverbs, and secondary sources such as books and journals were also consulted for this work. The economic thought of the people based on specialising in advantaged goods or what they easily produced and achieved is worth historical investigation as a means of celebrating their economic thoughts in a free market.