ABSTRACT
Chapter map The development of the capitalist economy is shaped by the actions of groups of people such as capitalists,
Our approach in this book emphasizes the social relations structuring the economy, rejecting the individualism of mainstream economics. While we deal with each of the main groups of economic actors – capital, labour, consumers and the state – in turn within this chapter, it is the (social) relations between these groups that are crucial. Foremost among these is the relationship between capital and labour within the production process. The decisions of consumers about which goods and services to purchase also underpins the economic process. Increased consumption is crucial in allowing the economy to grow and expand. The state plays an important role in regulating the economy, mediating between the interests of capital and labour in an effort to create stable conditions that facilitate economic growth. We believe that the position of each of these groups within capitalism gives them a particular set of material interests that shapes their actions. At a general level, we can say that capital seeks to generate profits; labour strives to maximize its wages and living conditions; consumers seek to further their interests and aspirations by purchasing goods and services; and the state aims to promote economic growth within its territory. While people are not the wholly rational and selfinterested actors that underpin conventional economic theory, they are knowledgeable individuals who have their own interests and aspirations (Hudson, 2005, p.3). The fact that capitalism operates through the actions of individuals whose knowledge of alternatives and outcomes is always imperfect, introduces an important element of uncertainty and openness into the economic process. At the same time, individual actors operate within the broader structures of the capitalist economy, meaning that they are confronted by pressures such as the need to earn a wage or generate profits. The pressing need for people to earn an income to support themselves and their families has led one commentator to describe economic geography as ‘the study of people’s struggle to make a living’ (Lee, 2000, p.195). The specific ways in which people respond to wider economic imperatives will vary according to a wide range of factors, including their economic status, gender, family situation, age and cultural values. These
responses can be expected to vary spatially, given the variety of local and regional environments that exists within the contemporary world economy, reflecting the interaction between capitalism and a range of preexisting societies and cultures (Johnston, 1984).
