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About this book

This book offers a pluralistic vision of the way economists have dealt with the question of power in society over the last two centuries. Economists’ ideas about power are examined from political, theoretical and policy-making points of view, with additional discussion of the active participation of economists in the management of power.

The book is organized into four main conceptions of power relations: i) Power as embedded in political institutions; ii) Power as emerging from the asymmetric relations caused by the unequal distribution of income and wealth; iii) Power as associated to the monopolistic or oligopolistic position held by some firms in the market; and iv) Power as the management of economic policies by the state.

Mosca brings together contributions from a range of scholars to analyse how economists have considered the role of power, putting the discussion into a much needed historical context.

Table of Contents


1. Introduction

The introduction examines the existing historiography on the concept of power within economic theory. Mosca explains that this book is on how the notion of power has been employed by economists of the past with different ideologies and orientations. She identifies four aspects of power in economic thought: political power, asymmetries of economic power, market power and the power of economists as policymakers. Finally she introduces the chapters of the book outlining the paths taken by economists’ ideas on power in western economic thought.
Manuela Mosca

The Republic and the Sovereign: Economists on Political Power


2. The Dream to Tame the Leviathan: Authoritarian Power and the Market

The idea of competitive markets was built on the dream to tame the Leviathan, erasing the influence of authoritarian power. This chapter explores the opposition between the State and the market in the history of economics, from Smith to Walras, from Schumpeter to Hayek. It deals with power in authoritarian States, looking both at totalitarianism in the twentieth century and at the return of authoritarianism in the contemporary world. In hybrid authoritarian States, the political dynamics calls into question the relations between those in power and the market space; markets work at the junction of private interests and public power. A broad area of research focuses on the ways the state and the market intermingle in different institutional models and paths of development.
Bruna Ingrao

3. Sismondi’s Political Economy: Translating Power into Sociability

Dal Degan focuses on the concept of sociability—a bridge concept that reveals its nodal nature between moral and anthropological theory, politics and political economy—in order to penetrate Sismondi’s scientific discourse. Pointing out the importance that Sismondi attributed to structural elements such as distribution of property, participative institutions, different systems of production and organization of time, as well as to non-material factors concerning the form of interpersonal relationships, the chapter emphasizes the critical role of Sismondi’s economic analysis and its role in unravelling the oxymoronic nature of modern freedom. The outcome of these inquiries, in thousands of pages, makes up the material of Sismondi’s social science.
Francesca Dal Degan

4. The Question of Democracy for the Italian Marginalists (1882–1924)

Mosca and Somaini focus on the influential group of the Italian marginalists and on their ideas about power relations in a democratic regime. They show how Vilfredo Pareto, Maffeo Pantaleoni, Antonio de Viti de Marco, and Enrico Barone made use of the theoretical weapons they had elaborated in order to analyse the distribution and the exercise of political power. With a dramatic period of Italian history as their backdrop, their theory of the circulation of elites, their notion of classes, and the psychology of the masses provided meaningful insights into the nature of the state and the political conflicts of their time.
Manuela Mosca, Eugenio Somaini

The Asymmetries of Power: Income, Wealth and Social Control


5. Elements of a Science of Power: Hobbes, Smith and Ricardo

Power is a pervasive phenomenon in the economy and society, associated with inequality of income, wealth, race, gender, information, and so on. However, much of contemporary economics still cherishes the purely abstract case of perfect competition in which no agent has any economic power whatsoever. Things were totally different at the time of the classical economists from Adam Smith to David Ricardo. Smith approved of Thomas Hobbes’ dictum that wealth is power but did not share the political inferences the latter drew from it. He and David Ricardo instead proposed economic policies, laws, regulations and institutions designed to contain the amassing of power in the hands of a few that endangered “the security of the whole society” (Smith).
Heinz D. Kurz

6. Power and Poverty: Social Legislation in the Years of Adam Smith

From 1782 to 1834, the English social legislation shifted from a safety net devised to deal with emergencies to a social security system implemented to cope with the threat of unemployment and poverty. This chapter analyses the role played by distinguished eighteenth-century British economic thinkers, in particular Adam Smith, in the process of achieving a socio-economic environment whereby power relations between the rich and poor would be different from those sustained by the Mercantilist’s utility of the poor. To what extent could Smith’s theorising on poverty and inequality be regarded as a map for the legislator to design and implement policies meant to transform a social environment geared around social relationships based on the authority-subjection pair, into a less unequal and more inclusive one?
Cosma Orsi

7. Debates on Social Insurance in the French Liberal School

De Paoli shows how the authors of the French liberal school used their influence upon politicians’ decisions on the issue of social insurance. The analysis brings out the fact that liberal economists fear political power. However, they recognise the weakness of the workers’ position compared to the power of employers. This conflict gives rise to a debate on what remedies to adopt: how to help the workers, without giving too much power to the government? They propose solutions that, while remaining liberal, take the question of social inequalities into account and thus enable the rise of socialism to be contained.
Joachim De Paoli

Market Power and Institutions in Theory and Policy


8. Power Wars Between Institutions: Business Training in Higher Education

Dieudonné observes changes between 1890 and 1920 in industrial financial capitalism through an examination of the emergence and needs of new figures in US higher education. This chapter focuses on different visions of the institutionalization of business training in higher education. A war for power between institutions erupted with the explosion of business schools competing with the university. The stakes is to underline the issues of power and governance of educational institutions which are torn in a conflict of interest between higher education financing modalities, their initial purpose as an academic body and the will of businessmen. With an underlying Veblenian reading, the chapter raises the question of power and competing interests between industry, finance and education at the turn of the century in the United States.
Marion Dieudonné

9. The Early Oligopolistic Models: Market Power in the Paretian Tradition

The study of non-competitive markets was a very active field of research in the period between the two World Wars. The chapter focuses on the developments that emerged within the Paretian tradition. The Italian followers of Pareto participated actively in this debate, and indeed Luigi Amoroso played a prominent role. The Italian mathematical economist was recognized as the main proponent of Cournot’s approach. Other Paretians who made important contributions were Arrigo Bordin, Felice Vinci, and especially Emilio Zaccagnini. The analysis of this strand of literature can help us to understand the reasons why Cournot’s perspective became the dominant approach to the oligopoly theory only in the postwar period.
Mario Pomini

10. Dispersion of Power as an Economic Goal of Antitrust Policy

This chapter surveys the range of objectives ascribed to US antitrust policy from its formative period through the early 1970s. Martin discusses and rejects Robert Bork’s analysis of the legislative intent behind the Sherman Act and considers the Kaldor-Hicks potential Pareto improvement principle, a central element of Bork’s argument. An elementary model shows that social preferences about aspects of market performance not captured by consumer surplus or net social welfare can be included in standard economic models. He further argues that the role of economics as a science in analyzing market performance is limited to characterizing the costs and benefits of pursuing alternative policy objectives and that economics as a science is agnostic concerning what policy goals should be.
Stephen Martin

Managing Power: Economists as Policy Makers


11. Jean-Baptiste Say on Political Power (1793–1832)

Blanc and Tiran verify if it is possible to extend Jean-Baptiste Say’s (J.-B. Say) principle of utility to morality and to politics. They focus on documenting specific and little-known aspects of J.-B. Say’s political struggle (1793–1803). The chapter also draws attention to Say’s crucial intervention. In this chapter, Blanc and Tiran show that J.-B. Say is one of the founding fathers of French liberalism in terms of political theory and that his influence on the French liberal group under the Restoration was far greater than is generally thought. The whole of the liberal group is engaged in a consistent political struggle about all these issues. J.-B. Say conducted his struggle through his teaching at the Athénée, the publication of articles in magazines and above all his influence on Comte and Dunoyer. His obsession was the stabilization of the Republican political order.
Emmanuel Blanc, André Tiran

12. Keynes and Eucken on Capitalism and Power

Fèvre compares John M. Keynes’ and Walter Eucken’s respective ideas on the issue of economic power. This chapter analyses, in particular, the consequences this entails on both Keynes’ and Eucken’s visions of how to manage a market economy. Fèvre shows that while Keynes put his faith in the complementary nature of private and public bodies as a way to reach a balance of interests, Eucken favoured the existence of an independent office in charge of monitoring competitive market structures, disempowering private agents.
Raphaël Fèvre

13. Power and Economics in Italy: From the Social Conflicts of the 1970s to the Euro-Crisis

Bini analyses the multifaceted issue of power in relation to the major economic events occurring and studies performed in Italy from 1970 to 2014. Dividing this time span into three sub-periods, he explores the relative emergent powers for each of them: the power of the workers in the 1970s, of the Italian Central Bank in the 1980s and of the Maastricht rules from the 1990s. The chapter seeks to ascertain how it is that the manifestations of power in Italy very often failed to activate adequate economic counter-powers, thereby generating asymmetric processes of change, unfavourable to growth. The author also explores the Italian economists’ contributions to analysis of the issue of power from the point of view of economic theory and economic policy.
Piero Bini


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