Understanding Capitalism: Competition, Command, and Change, Third Edition, is an introduction to economics that explains how capitalism works, why it sometimes does not work as well as we would like it to, and how over time it not only changes but also revolutionizes the world around us. The "three-dimensional approach" of the text focuses on competition in markets; command in firms, governments, and international relations; and change as a permanent feature of a capitalist
Understanding Capitalism: Competition, Command, and Change, Third Edition, is an introduction to economics that explains how capitalism works, why it sometimes does not work as well as we would like it to, and how over time it not only changes but also revolutionizes the world around us. The "three-dimensional approach" of the text focuses on competition in markets; command in firms, governments, and international relations; and change as a permanent feature of a capitalist economy driven by technical innovation and conflict over the distribution of income.The book covers the standard topics of supply and demand, market competition, imperfect competition, aggregate demand, inflation, and unemployment. It emphasizes the extraordinary dynamism and material productivity of the capitalist economy; the psychological foundations of human behavior; the logic and limitations of Adam Smith's invisible hand; technical change and the new information-based economy; global economic integration and its impact on national economies; the impact of economic activity on the environment; and inequality both within and among nations. In addition, it provides a critical evaluation of the tenets of neoclassical economics, a clear introduction to contract theory, and material drawn from new research in behavioral, institutional, and information economics.Understanding Capitalism, Third Edition, is ideal for undergraduate courses in economics and political economy. An Instructor's Manual is available to adopters.FEATURES OF THE THIRD EDITION·Offers a new chapter on the behavioral foundations of economics, showing that the selfishness of the "economic man" leaves out the important role of other social motives and how individual tastes and values evolve in response to experiences·Includes a new chapter that examines how economic success (and poverty) are passed on from parents to children and also looks at the increasing inequality of
^ Understanding Capitalism: Competition, Command, and Change ISBN 9780195138658 (revised Jan 2026)
^Richard Edwards, Samuel Bowles, Frank RooseveltUnderstanding Capitalism : Competition, Command, and Change by Frank Roosevelt, Richard Edwards and Samuel Bowles (2005, Paperback, Revised)ISBN 9780195138658 (revised Feb 2015)
"Understanding Capitalism", as far as I know, is the best "alternative" introductory textbook dealing with how the economy works. Some of its content is similar to what one would find in a standard introductory economics textbook: the treatment of supply and demand, inflation, monetary and fiscal policy is fairly conventional, even when non-traditional notation is used. However, much else is fresh, insightful and non-dogmatic. It gives capitalism credit when it's due, and doles out criticism when it applies..
Although this book is written by social democrats, and I am nowhere near a social democrat, I found it to be a very fair and accurate (as far as I know) treatment of economics. Instead of the one dimensional approach favored by the neoclassical economics that dominates American universities, it uses a three dimensional "political economy" approach. It analyzes markets, power relations, and economic growth. And it tells you a lot of very important things that textbooks leave out, mostly relating to flaws wit..
As taught in most undergraduate courses, the world of mainstream economics is an orderly place: markets clear, economic actors are rational, and social harmony prevails. Readers wanting more realism should read "Understanding Capitalism," a superb introduction to economics written from a social democratic perspective. As in any introductory econ text, the book carefully analyzes market processes. However, it also analyzes "command" relationships within firms, and the relationship between capitalist dyna..
