The Concept of Capitalism - Softcover

Über die Autorin bzw. den Autor

Professor Bruce Scott spent his entire professional career at Harvard Business School, except for 5 years spent with an affiliated school in Switzerland.   During that Swiss interval, in the 1960s, he researched the role of French national planning on its industrial sector.  This research played a significant role in the subsequent decision by the French government to discontinue its "indicative planning" for industry.  At the same time it also reoriented all his subsequent work to the study of economic governance and economic strategies of nations as contrasted with firms.  The fruits of that new orientation were first published by Springer Verlag in 2009 as a monograph called The Concept of Capitalism, and subsequently in its entirety as a 700 page book, also by Springer, called Capitalism, its Origins and Evolution as a System of Governance. Professor Scott made an abbreviated presentation of his ideas on the relationship between capitalism and democracy in the nation building process in the Libyan context at a TEDX meeting in Tripoli in February, 2012, a presentation which was attended by the Deputy Prime Minister and a number of cabinet members and which was taped for reuse by the TED organization. Professor Scott is scheduled to teach a full semester course called Capitalism as a System of Governance at Harvard Extension School beginning in January 2013 (http://www.extension.harvard.edu/courses/capitalism-system-governance) .  A full description of the course is available through the Extension School, including day by day reading assignments and suggested study questions.  The course is built around readings from two primary sources; Capitalism, by Professor Scott, and Why Nations Fail, by Daron Acemoglu and James Robinson (published by Crown Business).  The basic thesis of the course is that capitalism has emerged only where limited monarchy and the rule of law have already prevailed, and thus with generallyinclusive and therefore egalitarian institutions.  Thus capitalism seems to date to Venice circa 1200.  The basically complementary thesis of Acemoglu and Robinson is that "extractive" institutions and oppressive governance have characterized the failures.      Acemoglu and Robinson argue that the first notable example of inclusive and relatively egalitarian institutions dates to England and its "glorious revolution" of 1688-89, which paved the way for the industrial revolution and economic progress.  Capitalism is not featured in their account.

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A single system of economic governance – capitalism – prevails in the world today, both in theory and in practice. Yet there is neither a standard definition of capitalism nor a theory of how it works. Moreover, the most common conception of capitalism is that of a one-level system governed by markets, i.e., supply and demand, where many socioeconomic externalities are ignored. The purpose of this book is to counter this conception, showing that capitalism is more than markets. In fact, capitalism shares many parallels with everyday organized sports, in that both are indirect, three-level systems of governance where "freedom" is conditional on "playing by the rules." In organized sports, games (level 1) are shaped by official rules and monitored by referees (level 2), which are in turn regulated and revised by a governing organization (level 3) that oversees the sport as a whole. In capitalism, markets (level 1) are shaped by institutions and regulations and monitored by independent officials (level 2), which are in turn selected and shaped by a political authority (level 3) that oversees the system as a whole.

As simple and obvious as this parallel with organized sports may seem, the underlying cause of much of the economic instability of the last 25 years, and specifically of the current crisis, has stemmed from not understanding capitalism in this way, i.e., as a three-level system of governance. Only by improving our understanding of capitalism can we create better institutions and implement better policymaking to not only fix the present crisis of our capitalist system but also avoid future ones.

"Scott’s analysis of capitalism and democracy is striking both for its originality and for its rich policy suggestiveness and sheds an entirely new light on recent economic history" Charles Morris, author of "The Trillion Dollar Meltdown"

"An excellent case for thinking of capitalism as a system embodying political authorityas well as markets and, after reading it, one wonders how one could ever have thought otherwise" Prof. Peter A. Hall, Harvard University