The Nature and Logic of Capitalism by Robert L. Heilbroner (Norton: $15.95; 215 pp.)

Do not be put off by the title of this book. It is not a dry, academic treatise. And it is important, probably more important than the armada of business books being landed today by publishers on how to improve management or how to make a million dollars or how to beat back the Japanese economic threat. Robert L. Heilbroner has written an elegant, riveting account of the economic system under which we live. It’s not a simple book. It deals with abstractions in the hope that they will clarify why we do what we do in a capitalist society. It is an ambitious attempt, as Heilbroner himself puts it, “to discover the abiding behind the ephemeral, the essence within the appearance.”

Drawing heavily on Karl Marx and Adam Smith, and lightly on Sigmund Freud, Heilbroner depicts capitalism as a regime characterized by an insatiable drive to convert money into commodities and commodities into money in an endless loop. And the way this is done is by extraction of profit, which Heilbroner identifies as “the life blood of capitalism. . . . Profits are for capitalism the functional equivalent of the acquisition of territory of plunder for military regimes, or an increase in the number of believers for religious ones, or the legitimation of recognized authority for states in which a change of rulership has taken place.”

Heilbroner says capitalism displaced previous social relationships in which people--whether they were peasants or urban artisans--had a right to keep some portion of what they produced. Under capitalism, for the first time, workers were legally barred “from access to their means of livelihood.” They became hired hands, with the owner of capital ceded the fruits of the labor, identified by Marx as “surplus value.” The philosophical sanctions for this system came from John Locke and Jeremy Bentham. They liberated acquisitiveness from its former stigma of moral reprehensibility. As a result, the demoralization and desacralization of life “removed any need to justify the logic of capitalism”--and it rendered meaningless such questions as: “Which of two equally profitable undertakings is the better? Can one call wasteful any undertaking that returns a satisfactory profit? Whatever served the individual served society. By logical analogy, whatever created a profit (and thereby served the individual capitalist) also served society, so that a blanket moral exception was, so to speak, extended over the entire range of activity that passed the profit-and-loss test of the marketplace.”

But Heilbroner is not a Marxist determinist. And he goes to careful pains in this book to note how difficult it is to pin down capitalism in any neat definition. Nor is he oblivious to what he calls the “extraordinary richness and creativity of capitalism.” He cites, for example, its far greater tolerance for dissent and skepticism than government: “Lese majeste remains a legal offense, but lese capitale has not yet become one.” He notes also that although there is not a satisfactory explanation for this phenomenon, political democracy has appeared only in capitalist societies. And he is very good on why an anti-capitalist consciousness has never developed in the United States: He quotes Werner Sombart’s line, “All socialist utopias came to nothing on roast beef and apple pie.”

Heibroner argues that you don’t have to be a determinist to want to get at the central ideas of a society. “In the schism of realms,” he says, “it is enough to establish the primacy of capital, not its dictatorship.” In the end Heilbroner leaves us a subtle chapter on the limits of social analysis. His conclusions may be disputed, he says. He is not insisting on their unimpeachability. What he does insist on is the appropriateness of his mode of analysis, namely, that it makes sense for us to try to analyze society so that we can place it in a historical context and have a better understanding of the underlying forces that are driving it.