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The Nature and Logic of Capitalism
In search of an answer, The Nature and Logic of Capitalism takes us on a far-ranging exploration to the unconscious levels of the human psyche and the roots of domination and submission; to the organization of primitive society and the origins of wealth; to the sources of profit and the conception of a "regime" of capital; to the interplay of relatively slow-changing institutions and the powerful force of the accumulation of wealth. By the end of this tour we have grappled not only with ideas of Adam Smith and Karl Marx but with Freud and modern anthropologists as well. And we are far closer to understanding capitalism in our time, its possibilities and limits.
226 pages, Paperback
First published January 1, 1985
6 people are currently reading
330 people want to read
About the author
Robert L. Heilbroner
100 books112 followersRobert L. Heilbroner (March 24, 1919 – January 4, 2005) was an American economist and historian of economic thought. The author of some twenty books, Heilbroner was best known for The Worldly Philosophers, a survey of the lives and contributions of famous economists, notably Adam Smith, Karl Marx, and John Maynard Keynes.
Written in 1953, The Worldly Philosophers has sold nearly four million copies—the second-best-selling economics text of all time. The seventh edition of the book, published in 1999, included a new final chapter entitled "The End of Worldly Philosophy?", which included both a grim view on the current state of economics as well as a hopeful vision for a "reborn worldly philosophy" that incorporated social aspects of capitalism.
Although a highly unconventional economist, who regarded himself as more of a social theorist and "worldly philosopher" (philosopher pre-occupied with "worldly" affairs, such as economic structures), and who tended to integrate the disciplines of history, economics and philosophy, Heilbroner was nevertheless recognized by his peers as a prominent economist. He was elected Vice President of the American Economic Association in 1972.
He also came up with a way of classifying economies, as either Traditional (primarily agriculturally-based, perhaps subsistence economy), Command (centrally planned economy, often involving the state), Market (capitalism), or Mixed.
He was a trustee of the Economists for Peace and Security.
Heilbroner died on January 4, 2005 in New York, NY at the age of 85.
Written in 1953, The Worldly Philosophers has sold nearly four million copies—the second-best-selling economics text of all time. The seventh edition of the book, published in 1999, included a new final chapter entitled "The End of Worldly Philosophy?", which included both a grim view on the current state of economics as well as a hopeful vision for a "reborn worldly philosophy" that incorporated social aspects of capitalism.
Although a highly unconventional economist, who regarded himself as more of a social theorist and "worldly philosopher" (philosopher pre-occupied with "worldly" affairs, such as economic structures), and who tended to integrate the disciplines of history, economics and philosophy, Heilbroner was nevertheless recognized by his peers as a prominent economist. He was elected Vice President of the American Economic Association in 1972.
He also came up with a way of classifying economies, as either Traditional (primarily agriculturally-based, perhaps subsistence economy), Command (centrally planned economy, often involving the state), Market (capitalism), or Mixed.
He was a trustee of the Economists for Peace and Security.
Heilbroner died on January 4, 2005 in New York, NY at the age of 85.
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Displaying 1 - 12 of 12 reviews
December 10, 2010
I thought this book was a poor analysis. It was, rather, an apologist's defense of the notion of capitalism as it is idealised and propagandized through the media. NLoC fails to address why there is so much poverty, for example, or why about 95% of the wealth of America is owned by about 2 or 3% of its population and is getting more concentrated concomitantly with expanding poverty and rates of incarceration and infant mortality. On the positive side, the writing is easy to understand as it is filled with nice homilies and quaint truisms. The reason I gave this 2 stars, and not the one that it probably deserves, is because it is one of the greatest examples of the extent to which economic thought, analysis and criticism is more ideological than rational, let alone scientific. To anyone who is critical of economics as it is thought, taught and practiced, The Nature and Logic provides easy and ample proof of current economic ideology. And what makes that truly delicious, to me anyway, is just how highly respected Heilbroner's economics ostensibly is.
February 21, 2025
In line with Milton Friedman’s words “the more significant the theory, the more unrealistic the assumptions”, Heilbroner beautifully sets the context of his discussion and plays around the assumptions, explanations and expectations, closing the study with an acknowledgement of the prior.
I personally loved the connection to Perry Anderson’s quote “No class in history immediately prehends the logic of its own historical situation, in epochs of transition: a long period of disorientation and confusion may be necessary for it to learn necessary rules of sovereignity.”
Another key point was the discussion at the nexus of economics and psychology. Heilbroner recognised that the attempt to examine the manner in which economic agents are conceptualized in their social matrix for the purposes of the discussion around “The Nature and Logic of Capitalism” was lacking, although significant.
The history of our species is a history of deep integration with incredibly violent setbacks. Someone wins, and a period of stability arrives as we find ways of getting more interconnected while avoiding problems. Then the loop repeats.
Given that the book was published in 1985, it gave color to my questioning of at what stage of the integration/disintegration loop our society is in, or might be approaching..
I personally loved the connection to Perry Anderson’s quote “No class in history immediately prehends the logic of its own historical situation, in epochs of transition: a long period of disorientation and confusion may be necessary for it to learn necessary rules of sovereignity.”
Another key point was the discussion at the nexus of economics and psychology. Heilbroner recognised that the attempt to examine the manner in which economic agents are conceptualized in their social matrix for the purposes of the discussion around “The Nature and Logic of Capitalism” was lacking, although significant.
The history of our species is a history of deep integration with incredibly violent setbacks. Someone wins, and a period of stability arrives as we find ways of getting more interconnected while avoiding problems. Then the loop repeats.
Given that the book was published in 1985, it gave color to my questioning of at what stage of the integration/disintegration loop our society is in, or might be approaching..
April 1, 2014
Heilbroner goes behind the curtain to analyze the strong undercurrents of capitalism. Each social system, he argues, has its own set of social dynamics – a spirit that pervades a culture, a movement, an “ism” as capitalism is. The distinction between “capital” and “capitalism” is that the former fronts money to produce economic goods while the latter takes on a life of its own – not to produce economic goods per se, but simply, to accumulate more capital, endlessly.
This spirit leads to the commercialization of life, with capitalists constantly looking for opportunities to create new needs to feed the accumulation impulse: “...daily life is scanned for possibilities that can be brought within the circuit of accumulation....The continuous emphasis on 'time-saving' inventions or the unrelenting efforts of business to induce individuals to adopt new life styles are instances of this commodifying aspect of the self-expanding property of capital.” This spirit leads to the “de-moralization of economic activity” for its various activities, “in part because the motives of acquisitiveness are reclassified as interests; in part because the benefits of material gain are judged to outweigh any deterioration in the moral quality of society; and last and most important because the term 'goodness' is equated with private happiness....”
Capitalism's power lies in its “right of exclusion” - the right to withhold capital goods and property from use and “the legal right not to sell to those who will not meet his [the capitalist's] price.” This becomes a problem when the poor lose all independent means of existence. This leads to capitalist domination but ironically also creates a situation of mutual dependence between the capitalist and the consumer. To make wealth, consumers need to buy, but created need keeps the consumer tied to capitalist production and, in the end, to its ideology. Liberal democracy, with its focus on protection of property, is aligned with capitalism, providing various degrees of support – and the “socialization of losses” – from the public's sector, but that alliance is one way. While liberal democracy promotes freedom – including capitalist freedom - “capital itself has no inherent dependence on or affinity to political freedom. Capital is a process oriented to the creation of profit, not to the attainment of freedom....[T]he normal relation of capital to state power is therefore pragmatic.” Taking subsidies from the public sector is not a problem when it suits capitalism's interests; restricting the freedom of others is also not a problem when it suits capitalism's interests. And, capitalism is supported by an ideology of science that “reduces the objects in the material world to atoms and particles, propelled or held in place by 'forces' capable of being described by mathematics but no longer by art or imagery. This alliance with science leads to the “desacralization” of nature, “a belief in the indifference of 'nature'” and “a voracious, even rapacious, attitude toward the material world.”
When Heilbroner digs into the psychological roots of capitalism, he doesn't seem to hit his mark. Referring to Adam Smith, Heilbroner states that the origin of the capitalist mentality is “the desire for prestige and distinction.” Heilbroner supplements this motivation with a drive to accumulate power, defined as the capacity to command and to exact obedience, and “a prolonged infantile dependency” or “to a sublimated form of the sexual drive for preeminence that is part of the genetic endowment of all living beings.” Like Marx, Heilbroner is careful to not lodge these motivations in our “animal” nature. Domination among animals is largely sexual in nature he says, whereas “Domination in human society...is of minor evolutionary significance, and largely devoted to the division of the social product or to the fulfillment of the prestige-laden achievements of rulers for which the organized labor of large numbers is necessary.” In other words, various social dynamics lead to the emergence – the distinctly human emergence – of capitalist domination.
That is one take on domination. Milovan Djilas' "The New Class" might have a different perspective on whether domination is peculiar to capitalism. Woven into his psychological assessment, Heilbroner refers incidentally to “the thrust of the acquisitive impulse” and the “existential security that we also seek.” Now we are talking about the core of who we are and who we have always been: A desire to get what we need to survive and a fear that we will not get what we need or that we will lose what we have. Cultures all along have struggled with managing these ultimately individually-driven impulses, and some are more successful than others at curbing them so that they don't come at the expense of the larger whole. Are these the twin dynamics that we've struggled with throughout our long human history, and is capitalism the highest and most sophisticated expression of the self-oriented desire that has been there all along? And once things get out of balance, domination and inequality take on a new life of their own: Success at life necessarily means looking out for oneself, at the expense of others if need be because that's what it takes to survive. What Heilbroner adds to the “ism” part of “capitalism” is that the capitalist, as an adherent of an ideology, is indifferent to the impacts on the wider whole. It's all about predator and prey, and not about self-giving, cooperation and compassion.
This spirit leads to the commercialization of life, with capitalists constantly looking for opportunities to create new needs to feed the accumulation impulse: “...daily life is scanned for possibilities that can be brought within the circuit of accumulation....The continuous emphasis on 'time-saving' inventions or the unrelenting efforts of business to induce individuals to adopt new life styles are instances of this commodifying aspect of the self-expanding property of capital.” This spirit leads to the “de-moralization of economic activity” for its various activities, “in part because the motives of acquisitiveness are reclassified as interests; in part because the benefits of material gain are judged to outweigh any deterioration in the moral quality of society; and last and most important because the term 'goodness' is equated with private happiness....”
Capitalism's power lies in its “right of exclusion” - the right to withhold capital goods and property from use and “the legal right not to sell to those who will not meet his [the capitalist's] price.” This becomes a problem when the poor lose all independent means of existence. This leads to capitalist domination but ironically also creates a situation of mutual dependence between the capitalist and the consumer. To make wealth, consumers need to buy, but created need keeps the consumer tied to capitalist production and, in the end, to its ideology. Liberal democracy, with its focus on protection of property, is aligned with capitalism, providing various degrees of support – and the “socialization of losses” – from the public's sector, but that alliance is one way. While liberal democracy promotes freedom – including capitalist freedom - “capital itself has no inherent dependence on or affinity to political freedom. Capital is a process oriented to the creation of profit, not to the attainment of freedom....[T]he normal relation of capital to state power is therefore pragmatic.” Taking subsidies from the public sector is not a problem when it suits capitalism's interests; restricting the freedom of others is also not a problem when it suits capitalism's interests. And, capitalism is supported by an ideology of science that “reduces the objects in the material world to atoms and particles, propelled or held in place by 'forces' capable of being described by mathematics but no longer by art or imagery. This alliance with science leads to the “desacralization” of nature, “a belief in the indifference of 'nature'” and “a voracious, even rapacious, attitude toward the material world.”
When Heilbroner digs into the psychological roots of capitalism, he doesn't seem to hit his mark. Referring to Adam Smith, Heilbroner states that the origin of the capitalist mentality is “the desire for prestige and distinction.” Heilbroner supplements this motivation with a drive to accumulate power, defined as the capacity to command and to exact obedience, and “a prolonged infantile dependency” or “to a sublimated form of the sexual drive for preeminence that is part of the genetic endowment of all living beings.” Like Marx, Heilbroner is careful to not lodge these motivations in our “animal” nature. Domination among animals is largely sexual in nature he says, whereas “Domination in human society...is of minor evolutionary significance, and largely devoted to the division of the social product or to the fulfillment of the prestige-laden achievements of rulers for which the organized labor of large numbers is necessary.” In other words, various social dynamics lead to the emergence – the distinctly human emergence – of capitalist domination.
That is one take on domination. Milovan Djilas' "The New Class" might have a different perspective on whether domination is peculiar to capitalism. Woven into his psychological assessment, Heilbroner refers incidentally to “the thrust of the acquisitive impulse” and the “existential security that we also seek.” Now we are talking about the core of who we are and who we have always been: A desire to get what we need to survive and a fear that we will not get what we need or that we will lose what we have. Cultures all along have struggled with managing these ultimately individually-driven impulses, and some are more successful than others at curbing them so that they don't come at the expense of the larger whole. Are these the twin dynamics that we've struggled with throughout our long human history, and is capitalism the highest and most sophisticated expression of the self-oriented desire that has been there all along? And once things get out of balance, domination and inequality take on a new life of their own: Success at life necessarily means looking out for oneself, at the expense of others if need be because that's what it takes to survive. What Heilbroner adds to the “ism” part of “capitalism” is that the capitalist, as an adherent of an ideology, is indifferent to the impacts on the wider whole. It's all about predator and prey, and not about self-giving, cooperation and compassion.
October 25, 2022
An excellent introduction for anyone who wants to understand exactly what the title says. Don't let the fact that the book was published back in 1985 deter you. Though capitalism exhibits ongoing changes and mutations on its surface, its essence remains. Heilbroner writes clearly and knowledgeably.
December 26, 2020
الكتاب عميق جدا ويحلل الرأسمالية على أكثر من مستوى
والمقدمة المنهجية فيه رائعة ويمكن استثمارها في مجالات أخرى
والمقدمة المنهجية فيه رائعة ويمكن استثمارها في مجالات أخرى
July 29, 2007
From Library Journal via Amazon.com:
`What is capitalism?'' He refers to earlier civilizations but most of the work deals with American capitalism. His focus is on the social formation of capitalism: its nature and its logic, the process that surrounds the accumulation of capital. This treatise thus represents Heilbroner's description of the capital accumulation process, the role of government, and capitalist development, along with the multiple ideologies that can surround capitalism. The theories of numerous other writers, including Marx, Smith, Veblen, Lowe, and Mandel, are both criticized and praised.
My Comments:
This is indeed a thick read but I think one of the better books out there that explain not only what capitalism is, but how it's changing and evolving. How can one truly participate in a process when they do not, through and through, understand its nature and changes?
(I could have sworn that there was comments and critique on Keynes in here, but I could be wrong. Putting this book on the need-to-reread shelf.)
My Notes:
The regime of capital
Monthly Review, Jan, 1986 by Paul M. Sweezy
[...]
For reasons that should now be obvious, Heilbroner was always something of an anomaly in the American economics profession. A first-rate teacher and a prolific writer, he rose rapidly to become the holder of the endowed Norman Thomas chair in economics at the New School. But he was all along considered an outsider by the neoclassical faithful, and he was careful to keep his distance from the Marxist critics. In recent years, however, and especially since the onset of stagflation in the mid-1970s, Heilbroner, no doubt like many others, has come to feel increasingly unhappy about the state of the profession [^^and with Keynesian economic theory - BF^^]. But if the accredited economists don't have the answers, which are obviously more urgently needed than ever, then maybe the Marxist alternative should be taken more seriously. It must have been thoughts of this kind that led Heilbroner in recent years to write a series of books which by their very titles reflect both a troubled state of mind and a search for clarification outside the confines of the conventional wisdom: An Inquiry into the Human Prospect (1974), Business Civilization in Decline (1976), Beyond Boom and Crash (1978), Marxism: For and Against (1980), and The Nature and Logic of Capitalism (1985).
`What is capitalism?'' He refers to earlier civilizations but most of the work deals with American capitalism. His focus is on the social formation of capitalism: its nature and its logic, the process that surrounds the accumulation of capital. This treatise thus represents Heilbroner's description of the capital accumulation process, the role of government, and capitalist development, along with the multiple ideologies that can surround capitalism. The theories of numerous other writers, including Marx, Smith, Veblen, Lowe, and Mandel, are both criticized and praised.
My Comments:
This is indeed a thick read but I think one of the better books out there that explain not only what capitalism is, but how it's changing and evolving. How can one truly participate in a process when they do not, through and through, understand its nature and changes?
(I could have sworn that there was comments and critique on Keynes in here, but I could be wrong. Putting this book on the need-to-reread shelf.)
My Notes:
The regime of capital
Monthly Review, Jan, 1986 by Paul M. Sweezy
[...]
For reasons that should now be obvious, Heilbroner was always something of an anomaly in the American economics profession. A first-rate teacher and a prolific writer, he rose rapidly to become the holder of the endowed Norman Thomas chair in economics at the New School. But he was all along considered an outsider by the neoclassical faithful, and he was careful to keep his distance from the Marxist critics. In recent years, however, and especially since the onset of stagflation in the mid-1970s, Heilbroner, no doubt like many others, has come to feel increasingly unhappy about the state of the profession [^^and with Keynesian economic theory - BF^^]. But if the accredited economists don't have the answers, which are obviously more urgently needed than ever, then maybe the Marxist alternative should be taken more seriously. It must have been thoughts of this kind that led Heilbroner in recent years to write a series of books which by their very titles reflect both a troubled state of mind and a search for clarification outside the confines of the conventional wisdom: An Inquiry into the Human Prospect (1974), Business Civilization in Decline (1976), Beyond Boom and Crash (1978), Marxism: For and Against (1980), and The Nature and Logic of Capitalism (1985).
August 9, 2009
Heilbroner is a fluent writer on the conceptual nature of capital. Heilbroner is helpful in that he describes the way capital functions so well as to make him one of my favorite persons to explain Marx's famous M-C-M formula. Heilbroner expresses how capital functions as a process and thus throws light on the destabilizing nature of this process. Heilbroner's description of Marx's M-C-M formula puts the whole notion of social and self transformation into a more clear space by seeing how capital, often the initiator of change in a transaction, can itself never rest once it moves, further destabilizing the objects and humans tangentially associated with it, on down the line for capital must constantly be either moving into objects to realize value, or then be moving from object back into into the capital marketplace in order to unlock this value and free capital to exchange its value for something else. The dynamic as Heilbroner discusses it is cleanly expressed and highly readable.
June 22, 2014
Excellent book. Describes the title with great lucidity without losing the profound message it intends to convey. One aspect that I felt was missing and would have made the book even better was looking at non-Western social formations as a comparison. Though his neglect of this area might be due to the fact that he considers Capitalism as something originating in Western history.
June 30, 2008
Greatest book. Must read this.
May 18, 2009
The title says it all. Heilbroner is a first-rate social analyst/critic.
July 26, 2011
read it several times and its still the best short readable explanation of capitalism
July 2, 2014
This was good and thought-provoking if occasionally pretentious and overwritten!
Displaying 1 - 12 of 12 reviews