by Samuel Bowles, Frank Roosevelt, Richard Edwards, and Mehrene Larudee

Understanding capitalism by Bowles and others
Part of the books by Samuel Bowles series:
Editions:Paperback: $ 87.95
ISBN: 9780190610937
Pages: 592

Understanding Capitalism: Competition, Command, and Change, first published in 1985 but now in its fourth edition (2017), is an introduction to economics that explains how capitalism works, why it sometimes fails, and how it undergoes and brings about change. It discusses both the conventional economic model and the role of power in economic interactions. Understanding Capitalism analyzes how profit-seeking is a source of competition among firms, conflict, and change.

New to this Edition

  • Data and figures have been thoroughly updated throughout
  • Three new and four substantially rewritten chapters clarify the content and strengthen the book's international perspective
  • Simpler algebra has been seamlessly integrated into Chapters 10, 11, and 12

About the Authors

  • Samuel Bowles is Research Professor at the Santa Fe Institute and Professor of Economics at the University of Siena, Italy.
  • Richard Edwards is Professor of Economics at the University of Nebraska-Lincoln.
  • Frank Roosevelt is Professor Emeritus of Economics at Sarah Lawrence College.
  • Mehrene Larudee is Visiting Associate Professor at Hampshire College.
Reviews:Frank Thompson on Review of Radical Political Economic wrote:

ON THE THIRD EDITION: "The first edition of this book appeared in 1985, and the second in 1993. Each immediately became the leading textbook for introductory political economy courses with a Left orientation. [...] the unique accomplishment of the book is to embed introductory conventional economics in a much broader context of contemporary supra-disciplinary social science. The authors maintain their now familiar metaphor of 'three-dimensional' economics. The horizontal dimension is that of voluntary exchange, the site of competitive markets; the vertical dimension is that of command, the realm of power relations; and the third dimension of economic systems shifts the focus to dynamics, to how social systems change throughout time. Conventional introductions to economics narrowly confine themselves to the horizontal dimension [...] I have used all three versions of this text more times than I care to remember as the backbone of a one-semester, prerequisiteless, interdisciplinary introduction to political economy. Students find it challenging and, most importantly, transforming. There is lots of discussion. Most students have no previous coursework in economics. Those who do very well in the course are then quite adequately prepared to move directly on to a standard intermediate theory sequence. The students in the course with prior training in economics learn no less than (if somewhat differently from) the others. Scales fall from their eyes as the blinkered version of economics they bring to the course is placed in broader critical social scientific contexts. I have also used previous editions in informal study groups beyond academia and, as well, in intensive lecture series for students at the University of Havana. There is no better general introduction to political economy and in particular to the political economy of the United States in existence."

Cameron M. Weber on Science & Society wrote:

ON THE THIRD EDITION: "The idea behind a textbook like this is to give enough economics to undergraduate students to help them understand the economy without making the subject matter too theoretical or complicated. At the same time, the author(s) would like to make economics a relevant and timely subject in hopes that the student's interest will be peaked for more advanced study. Lastly,the book has to be good enough so that those teaching from it enjoy the material and can use it to inspire themselves and their students. Bowles et al. in Understanding Capitalism hit the mark on all accounts in the 3rd edition of their text. [...] The main difference between Bowles et al. and The Economic Way of Thinking by Paul Heyne, Peter J. Boettke and David L. Prychitko and Microeconomics by David Colander is that Understanding Capitalism is more in depth in terms of the history and development of economics as a science as evolved from political economy from the time of Adam Smith through today and the highlighting of the work of six great economic thinkers (Smith, Marx, Schumpeter, Keynes, Coase and Sen) along the way. The book is both a text on economics itself as well as introduction to economics as a category of thought. Importantly as well for those of us seeking texts for undergraduate students, Understanding Capitalism can be used as both a microeconomics and a macroeconomics text as well as a text on economic history and political economy. The book in comparison with Heyne et al. and Colander might be considered as 'Marxist' in outline, though by no means is the book confined to Marxist ideology."

Relevant Links

Table of Contents of Understanding Capitalism


  1. Capitalism Shakes the World  (The Permanent Technological Revolution / Growing Inequality / The Population Explosion and the Growth of Cities / The Changing Nature of Work / The Transformation of the Family / Threats to the Ecosystem / New Roles for Government / Globalization / Conclusion)
  2. People, Preferences, and Society (Constraints, Preferences, and Beliefs / "Economic Man" Reconsidered / Human Nature and Cultural Differences / The Economy Produces People / Conclusion: The Cooperative Species)
  3. A Three-Dimensional Approach to Economics (Economic Systems and Capitalism / Three-Dimensional Economics / Neoclassical Economics / Values in Political Economy / Conclusion)
  4. The Surplus Product: Conflict and Change (Economic Interdependence, Production, and Reproduction / The Surplus Product / A Model of Production and Reproduction / The Surplus Product and Change / Conclusion)
  5. Capitalism as an Economic System (Class and Class Relationships / Classes and Economic Systems / Capitalism / Capitalism, the Surplus Product, and Profits / Conclusion)
  6. Government and the Economy (Rules of the Game: Government and the Capitalist Economy / Democratic Government as Collective Provision for the General Welfare / Government and the Distribution of Income, Wealth, and Welfare in the 19th Century / Democracy in the 20th Century / Conclusion)
  7. U.S. Capitalism: Accumulation and Change (Accumulation as a Source of Change / Social Structures of Accumulation / The Stages of American Capitalism in the United States / U.S. Capitalism: Labor Organizing and Labor Markets / U.S. Capitalism / Today is Transnational / Conclusion)


  1. Supply and Demand: How Markets Work (The Nature of Markets /Demand and Supply /Demand and Supply Interacting / Shifts in Demand or Supply / Conclusion)
  2. Competition and Coordination: The Invisible Hand (Adam Smith and Laissez-Faire Economics / Coordination / The Invisible Hand / Market Failure / Coordination Failure / Conclusion)
  3. Capitalist Production and Profits (What Are Profits? /Profit in a Grain-Growing Capitalist Economy / Corporations and Other Businesses: Who Gets the Profit or Bears the Loss? / Determinants of Total Profit and the Profit Rate / Example: The Good Cod Fishing Company / Conflict Over the Profit Rate / Conclusion)
  4. Competition and Concentration (Competition for Profits / The Forms of Competition / Price Competition / Breakthroughs / Monopoly Power / Investing to Compete / The Dynamics of Competition / Conclusion)
  5. Wages and Work (Work, Sloth, and Social Organization / The Capitalist Firm as a Command Economy / The Conflict between Workers and Employers / Labor Discipline: Carrots and Sticks / The Labor Market, the Wage, and the Intensity of Labor / Conclusion)
  6. Technology, Control, and Conflict in the Workplace (The Social Organization of the Workplace / Technology and the Labor Process / Conflict in the Workplace / Profitability Versus Efficiency / Markets and Hierarchies / Conclusion)


  1. The Mosaic of Inequality (Well-Being and Inequality / Growing Inequality / Race and Inequality / Women's Work, Women's Wages / Conclusion: Explaining the Mosaic of Inequality)
  2. Progress and Poverty on a World Scale (Poverty and Progress /Productivity and Income / Requisites for Economic Development / Foreign Investment and Development / Conclusion)
  3. Aggregate Demand, Employment, and Unemployment (Counting the Unemployed / Aggregate Supply and Aggregate Demand / A Basic Macroeconomic Model / Unemployment and Government Fiscal Policy / The Business Cycle and the Built-in Stabilizers / Investment, Aggregate Demand, and Monetary Policy / Wages, Aggregate Demand, and Unemployment / Conclusion)
  4. The Dilemmas of Macroeconomic Policy (The High-Employment Profit Squeeze / Exports, Imports, and Aggregate Demand / International Trade and Macroeconomic Policy / Monetary and Fiscal Policy at Odds / Institutions for Achieving Full Employment / Conclusion)
  5. Financial and Economic Crisis (The Great Recession and the Subprime Crisis / Understanding the Great Recession / Lessons from the History of Economic Crises / Why are asset markets prone to price bubbles? / Deregulation and financial fragility / Regulation in a capitalist economy / Conclusion)
  6. Government and the Economy in Transnational Capitalism (More Spending, Less Health / Government in the U.S.: Too Big? / Influencing the Rules / Contracting Out Government Services / Government Contracting for Private Prison Services / Feedback Loops in Taxing Transnational Corporations / Democracy and Inequality / Supranational rules and rule changes / Capitalism and Inequality /Conclusion)