F. Economic Systems

In this Chapter:

Understanding economic systems helps us consider ways we might make them work for us better in the future.

Study Questions

  1. What is the purpose of an economic system?
  2. Are the terms “capitalism,” “socialism,” and “communism” useful in understanding past and current economic systems? Are there better terms or a better way of thinking about economics?
  3. What promising economic arrangements would support people and reduce conflict better than our current economic systems?

Overview Article F

12 pages total

“The Impact of Corporations on the Commons,” by Mary Zepernick, Address at the Harvard Divinity School’s Theological Opportunities Program, October 21, 2004, 12 p.

A short history of corporations and their impact on the commons. This Is A Great Everyone-Read Piece—with some history, economics…

Reading Set F1: History of Economic Systems

62 pages total

“From primitive communism to class society,” World Socialist Movement, 12 p.

An economic history of the world.

“History of Economic Thought,” Wikipedia, accessed July 8, 2010, 57 p.

A brief description of economic history and thought.

“Dear Dr. Dollar,” by Ellen Frank, Dollars & Sense, Issue 256, November/December 2004, 3 p.

What is the difference between how a “radical” or “progressive” economist and a “liberal” economist looks at things? A non-polemical discussion of different approaches to economics.

“The Meaning of Work: A Marxist Perspective,” by Harry Magdoff, Monthly Review, Volume 58, Number 5, October 2006, 21 p.

A thoughtful, Marxist perspective — that brings in lots of points of view — on the history of work.

“The Wealth of the West Was Built on Africa’s Exploitation: Britain Has Never Faced Up to the Dark Side of its Imperial History,” by Richard Drayton, The Guardian (UK), August 20, 2005, 5 p.

English banking, insurance, shipbuilding, wool and cotton manufacturing, copper and iron smelting, and the cities of Bristol, Liverpool and Glasgow all multiplied in response to the direct and indirect stimulus of the slave plantations.

“Recasting Colonialism as a Good Thing,” by Julio Godoy, Inter Press Service, July 5, 2005, 5 p.

Various views on Europe’s colonial past.

Reading Set F2: Capitalism

68 pages total

“The Moral Basis of Capitalism,” by Robert W. Tracinski, The Center for the Advancement of Capitalism, 5 p.

A moral argument in support of capitalism.

“Capitalism,” Wikipedia, accessed July 8, 2010, 34 p.

Characteristics of capitalism, its origins in mercantilism, the rise of industrialization, and 20th-century capitalism.

“A Student’s Guide to Economic History,” book review by David Gordon of How Capitalism Saved America: The Untold History of Our Country, From the Pilgrims to the Present by Thomas J. DiLorenzo, The Mises Review, 2004, 7 p.

Defense of the free market, with U.S. historical references.

Book review by Joshua Sperber of Capitalism and its Economics: A Critical History by Douglas Dowd, Z Magazine, Volume 16, Number 4, April 2003, 6 p.

Dowd emphasizes capitalism’s relationship to history and society’s stratifications of power.

“A Moral Economy,” by Fred Block, The Nation, March 20, 2006, 8 p.

Visions of a new economic order in the context of the last 30 years of right-wing economic ascendancy in the U.S.
Excerpt: “These four principles — reciprocity, responsible competition, conservation and cooperation — interact and reinforce one another to enhance a moral economy’s effectiveness. But Market Fundamentalists understand nothing of this. In fact, their policies have weakened our economy by deliberately ignoring and violating all these principles…”

“Rise of Corporate Power in America,” an excerpt from When Corporations Rule the World by David C. Korten, Kumarian Press, 1995, 24 p.

Economic history of the U.S. viewed through the lens of the rise of corporations.

Reading Set F3: Socialism and Communism

50 pages total

“Socialism,” Wikipedia, accessed July 8, 2010, 43 p.

A brief introduction to socialism and its history.

“Communism and Marxism,” rationalrevolution.net, 20 p.

An accessible and non-ideological overview of Communism and Marxism.

“Misconceptions, Confusions, and Conflicts Concerning Socialism, Communism, and Capitalism,” by Paul Brians, 21 p.

Thoughtful, non-ideological discussion of the advantages and pitfalls of various economic systems as well as misconceptions about what they are. A good site to browse in—thoughtful, non-ideological

“Liberalism, Socialism, and Democracy,” by Robert Kuttner, The American Prospect, October 11, 2005, 14 p.

Is it possible to control the power of capital without a strong command state? Very thoughtful discussion of European social democracy’s understanding of the need for a system to tame capital without a command state, compared to the more fluid pragmatism of U.S. liberalism. Excellent bridge between socialism and capitalism.

Reading Set F4: Current Economic Issues

48 pages total

“The Demand for the Common Good,” by Jonathan Rowe, Yes! Magazine, Summer 2004, 11 p.

What happens when economic growth produces more “illth” than wealth? What happens when it gobbles up the foundation of the good life — the commons?

“The Hidden Commons,” by Jonathan Rowe, Yes! Magazine, Summer 2001, 14 p.

What is the commons, and how is it valued?

“Sharing the Wealth of the Commons: Institutionalizing the commons could promote both economic equality and environmental protection,” by Peter Barnes, Dollars & Sense, November/December 2004, 14 p.

Each of us is the beneficiary of a vast inheritance. This common wealth includes our air and water, habitats and ecosystems, languages and cultures, science and technologies, political and monetary systems, and quite a bit more.

“Toppling the Corporate Aristocracy: Marjorie Kelly Dismantles a Major Premise of Capitalism and Makes the Case for Creating More Democratic Corporations,” an interview by Robert Hinkley, CommonDreams.org, April 19, 2002, 9 p.

The co-founder of Business Ethics magazine and author of The Divine Right of Capital argues that just as we once democratized government, we must now democratize the economy.

Reading Set F5: New Economic Directions

58 pages total

“Worlds Apart on the Vision Thing,” by Jeremy Rifkin, Globe and Mail (Canada), August 17, 2004, 5 p.

The European Dream is doing better than the American Dream.

“Complex systems of Eco-Economic Change Demand System Change,” Indigo Development, 4 p.

Classical economics counts resource depletion, pollution, degradation of ecosystems, and global ecological systems as value-adding activities that add to gross domestic product. The discipline of Ecological Economics in the mid-90s insists that our local, national, and global economies must be managed in their ecological context to avoid ever deepening crisis.

“Our New Financial Architecture and Theirs,” by Jeremy Brecher, Tim Costello, and Brendan Smith, Z Magazine, February 1999, 10 p.

A history and critique of capitalist financial systems, and a proposal for a new new global financial architecture.

Book review by Adria Scharf of America Beyond Capitalism: Reclaiming Our Wealth, Our Liberty, and Our Democracy by Gar Alperovitz, Wiley, 2004, Yes! Magazine, Summer 2005, 3 p.

This book can ignite the creative imagination needed for progressive activists to connect their work to a shared vision for a democratic political-economic system.

“Other Economies are Possible! Organizing toward an economy of cooperation and solidarity,” by Ethan Miller, Dollars & Sense, Issue 266, July/August 2006, 11 p.

Is the raw capitalism in American society the best possible outcome for our well being? Surely not: It’s time to think about an economic system that makes us happy people. The emerging “solidarity economics” embraces a plural and cultural view of the economy as a complex space of social relationship in which individuals, communities, and organizations generate livelihoods through many different means and with many different motivations and aspirations — not just the maximization of individual gain.

“Realizing Visions For A Free And Just Society,” by Haroon Bajwa, ZNet, June 9, 2006, 7 p.

A review of Michael Albert’s ideas about a participatory economic (parecon) system designed to adhere to progressive values of solidarity, diversity, equity, and self-management. more accessible on parecon?

“Economies For Life,” by David Korten, Yes! Magazine, 13 p.

Through our individual and collective choices, we can create the economic institutions, relationships, and culture of a just, sustainable, and compassionate world of living economies that work for all.

“Evolution of an Ecological Civilization,” by Pan Yue, Vice Director of the State Environmental Protection Administration, Beijing Review, Number 45, November 9, 2006 (updated December 15, 2006), 5 p.

With the rapid economic and industrial development, human beings are faced with increasingly serious ecological and environmental crises calling into question the industrial civilization mode that has prevailed globally for centuries.

Additional Resources


“Free Market Myth: Regulation is everywhere. Let’s choose who benefits,” by Dean Baker, Boston Review, January/February 2009, 14 p.

Political debates over regulation are wrongly cast as disputes between conservatives who want less regulation and liberals wanting more. But the battles over “free” trade, patents, copyrights, and the bankruptcy-reform bill that passed Congress in 2005 show that no one is really talking about an unregulated market — rather we are all just talking about whom the regulation is designed to benefit. Conservatives support regulatory structures that cause income to flow upward, while liberals support regulatory structures that promote equality.


Next Reading Set Collection: G. Meeting Basic Needs in the U.S.