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Bourgeois Economists and "Economics" as Bourgeois Pseudo-science

Whenever capitalism is in a period of crisis there is an emergence of a particular type of bourgeois economist.  Unlike those economists who serve as the cheerleaders of capitalism during its "boom" periods, where the global centres do not experience the visceral facts of class contradiction, these particular economists are attentive to the reality of crisis capitalism.  Indeed, the Milton Friedmans of the economist world, who did little more than play the role reserved for a feudal court's charlatan astrologer (as Samir Amin once claimed), are not really convincing in a context that disproves all of their supposedly "mathematical" theories.  They don't vanish altogether, and of course remain popular in various faculties, but since their theories were predicated on justifying a temporary phase of capitalism that is no longer ascendent, they cannot help but seem somewhat antiquated.  Hence a discursive space is opened for economists who do not shy away from addressing the problems of capitalism that cannot be ignored.

Thomas Piketty is one such economist, and he has garnered some attention for claiming that "capitalism isn't working."  And yet, still limited by the constraints of bourgeois economy, Piketty is not necessarily arguing that capitalism needs to be replaced by socialism.  Rather, his argument can be reduced to the claim, which is not as unique as some of his reviewers might think (but then historical memory is often quite short), that capitalism in its current arrangement isn't working––the problem is how to conceive of damage control.  In this way, Piketty is simply reasserting the Keynesian hypothesis.  His arguments are similar: economic theories about the market's equilibrium are wrong, but so is the marxist "economic" theory of surplus value; the solution is to strike some middle path, just as Keynes did, and come up with a theory that justifies the persistence of the state of affairs that is somehow more equitable.  We should recall, here, how Rawls' Theory of Justice, inspired by Keynesian economics, was a philosophical attempt to justify welfare capitalism without calling it such, while avoiding the "extremes" of laissez-faire and socialist politics.  And Rawls' political philosophy would probably work quite well with Piketty's economic theory.

Thomas Piketty contemplates how to fix the system.

Here it is worth noting the general ignorance mainstream economists demonstrate whenever they mention Marx.  First of all, the very fact that they think that Marx was an "economic theorist" is a significant problem. Capital was a critique of economic theory (it is even subtitled as such) and begins by assuming that such theories are ideological phenomena connected to class positions.  Although it makes recourse to the language and symbology of nineteenth century (and earlier) economists, it does so for the same reason that a religious apostate uses the language and terminology of the church.  The point of Capital was to find the material basis upon which specific historical economies (understood as ways of producing, or "modes of production") rest and reproduce––particularly capitalism.  Economic systems are not reducible to economic theory, which is ideology, but concrete historical/social facts that have to do with general law of historical motion, i.e. class struggle.  So in this context, Marx's axiomatic insights about labour and surplus-value are not, as Piketty assumes, economic theories; they are theories about the processes upon which any possible economic theory rests.  This is what makes them more scientific than the kind of empiricism, inherent to economic theory, that brands itself as "scientific".

(As an aside, it is also worth noting that Samir Amin has referred to the discourse of economics-is-a-science as "parascience" and that Deirdre McCloskey, despite being a liberal, has referred to her former discipline as a "cargo cult science".)

Secondly, I am beginning to doubt that the majority of people who study economics actually read Marx.  Although I have not spoken to every economics academic, and though I am aware that there are Marxist economists, based on my experience, and what well-known economists say, I'm pretty sure that there is a Cliff's Notes version of Capital that is standard fare in economics departments.  Such a version assumes that: a) Marx is an economist; b) Marx's primary "economic theory" was that (in the words of Piketty in the aforelinked interview) "capitalism would self-destruct in the endless pursuit of diminishing profit returns."  Leaving aside the fact that the third volume of Capital appears to make, at least according to one reading, an inevitabilist argument for the end of capitalism, Marx's core arguments about the logic of capitalism are not about "diminishing profit returns" but about the tendency of the rate of profit to fall (which is not the same) and over-accumulation (oddly parallel to some of Piketty's later comments), both of which are based an appeal to extra-economic logic (social and historical structures) and not charts of random statistics or pseudo-mathematical equations.  Similar caricatures have been made about the labour theory of value––seriously, I would fail my students for straw-personing their subject matter if they used this kind of logic.

In any case, the popularity of social democrat economists and the unpopularity of laissez-faire economists directly correlates to capitalist crisis and stability respectively.  The rising stars of the latter group were shocked at the recent crisis (like court wizards who had assured their monarch that everything was well in the kingdom only to encounter a famine) and those who were less shocked engaged in the most pitiable attempts at damage control.  The rise of neo-Keynesianism is the rise of an ideology that is attempting to save capitalism from its "excesses" without going down the revolutionary path: capitalism is broken, the Piketties of the world (like Keynes) proclaim, so let us fix it!

Such an economic ideology (for economics is ideology more than it is science) also serves as an alternative to revolutionary ideology, as even petty-bourgeois ideologues know.  Indeed, a recent New York Times article, in discussing the repopularity of Marx, argued that Marxism is out of date because it lacks the kind of "synthesis" provided by Piketty's more admirable social democratic approach.  Similarly, a Globe and Mail review of the recent publication of Althusser's On the Reproduction of Capitalism, though lauding the importance of the book, ends by wondering whether it might be entirely relevant since we have Piketty's book and other more modern understandings of capitalism.  (Once again, we should ask whether either of these authors have actually read Marx, understand the development of Marxist theory to date, aside from what they might have picked up in a first year political science or philosophy class.)  The point, here, is that social democrat economic ideology serves as a cozy liberal alternative to revolutionary science for those who, in times of crisis, realize there is a reason to be critical, and are critical enough to worry about the other popular ideology of crisis capitalism––fascism.

Of course, if capitalism is "fixed" by the reforms that Piketty and his type of economists imply, then he will quickly become unfashionable, just as Keynes did.  New Friedmans and Hayeks will arise to justify, with the same parascience, the ideology of a ruling class that has become stable.  Economic departments will mock Piketty, just as they once mocked Keynes, though they will save their greatest spite for Marxism which threatens all they hold dear.

Comments

  1. Putting aside, for a moment, the question of intellectual honesty, do you believe Piketty actually believes in the solutions he poses (i.e. New period of international economic cooperation)? The absurdity of the hypothesis is clear, as rejected both both bourgeois economists and marxists alike; however, in leading his readers to reject such a hypothesis, he seems to be pointing them to the necessity of a post-capitalist future...or maybe not? Thoughts?

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    1. I would like to assume that he's not being disingenuous, and I see no reason why he would put forward an hypothesis that he actually believes is absurd simply because he thinks it will lead readers to accept a post-capitalist future as necessary. If this is the case, then it would be leading them to accept a doctrine that provides no revolutionary potential, and he has been quite clear that he is not a marxist, rejects the entirety of marxism, and has defined himself as a social democrat. Why go through such an elaborate charade if you secretly believe otherwise? Why think that readers will be more drawn to a new and opaque doctrine rather than aiming them at revolutionary?

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    2. A few questions:

      1) Besides his new (utopic) international order, what would be the doctrine that he's leading them towards? (Cards: it seems to be a purely negative one--if, that is, one rejects his utopic call).

      2) "Why go through such an elaborate charade if you secretly believe otherwise?"--potentially for the simple fact that--to my knowledge--no treatise on capitalism, of this strength, has captured the ear of so many liberals in what seems to be a very long time. He pushes his critique as far as it can go without being rejected as simply 'Marxist' by bourgeois economists. Do you see a way that he could have pushed his critique further without being labeled as such?

      Simply put, Piketty seems to be (I would argue intentionally) working as close as he can to the limit without being dismissed, at least not instantly. I see no harm, as of yet, with what he is doing, and I would go so far as it say that it is beneficial up until the point where it does become a doctrine, which I don't believe it has.

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    3. Yes, but what does this produce? Nothing useful in the way of practice, especially since he persists on saying that "Marx was wrong" and making Keynesian pronouncements. In this way he forbids anyone interested in his book from organizing according to the only theoretical weapons capable of overthrowing capitalism.

      Moreover, his entire approach rests on the idea that "economics is science", and not historical materialism, so is limited from the get-go. The fact that the current discourse around his work is that we should read him, an honest social democrat, rather than Marx or Marxist political economists, is also significant… So whatever the value in his approach (when it's really neo-Keynesianism and doesn't cut down to the material issues as strongly as Capital), the fact that it is being put forward, both by him and his supporters, as a substitution for Marx is very useful for bourgeois ideology.

      Who cares if he could not have pushed his critique further without being labeled a Marxist. Blanquism is a political dead-end, as history has taught us, and a work on political economy is not class struggle, especially if it is one that begins by accepting certain ideological assumptions about economics as axiomatic. He has captured the ear of liberals who: a) will not contribute to class struggle because they are liberals and want their liberalism confirmed, not challenged; b) are the kinds of liberals who are already social democrats and want to fix capitalism rather than end it altogether. You just have to read the reviews of Piketty's book, and the interviews with him, on the part of liberals to see that this is the case. This does not contribute to the production of a revolutionary counter-hegemony; if anything it helps build the hegemony of a particular sector of the ruling class and its ideology.

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  2. First of all, Rawls sucks and I dreaded having to read him for an ethics class I took during my undergrad years.

    Back to economics though: I'm actually researching the history of economic theory, and it's perfectly clear that the whole thing is highly pseudo-scientific. One common motif I've noticed is how deeply connected economics and religious mythologies are; the economists of today pretty much use similar methods to the theologians of old (hell, even the "invisible hand" has its roots in Sufi mysticism), which kind of makes sense when you consider how the academy/school has replaced the church as one of the more powerful ideological apparatuses. So much of it is ideology and nothing else.

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    1. Well, Samir Amin has a piece in his *Spectres of Capitalism* where he claims that "pure economics" is the modern world's witchcraft and refers to it in much the same way as you. Although, to be fair to the theologians of old, I think the best theologians were more sophisticated thinkers than the average bourgeois economist––at least the former did not pretend that their work wasn't religious interpretation.

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  3. Hi JMP, thanks for this post.

    What work(s) would you recommend as a critique of economics/ideology? I'm quite familiar with the classics, including Capital, but I'm looking more contemporary and specific - on how they couldn't predict the crisis and so on.

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    1. Samir Amin, who was trained as an economist, has some great critiques of economics as ideology. I mentioned, in the comment above, his book *Spectres of Capitalism*. Although I disagree with part of his critique of Althusser in said book (but only part), his attack on economics and economic ideology is really quite great.

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    2. Thanks for the recommendation. I have yet to read any of Amin's work.

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    3. Very worth a read, though the one I recommended above is more of a small collection of essays. If you really want a good representation of Amin I'd suggest reading *Class and Nation* or *Unequal Development*, although the former is the best.

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    4. "Samir Amin, who was trained as an economist"

      wrongo.

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    5. What an asinine and ignorant comment. Amin was indeed trained as an economist. Just saying "wrongo" does not eradicate the fact that his education in France was in politics and economics/statistics.

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  4. i am not a troll. i ask one question, answer it and i leave you in peace.
    how can you say about understanding Marxist theory to date, and then completely ignore Raymond Lotta. Clearly, you do not understand Marxist theory to date yourself.

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    1. Since you say you aren't a troll, I will answer this only one question that, when answered, will doubtless lead to more trolling responses. What does the above piece have to do with Raymond Lotta? I only name one economic theorist, a bourgeois economic theorist, and no Marxist economic theorists; it has nothing to do with an exposition of important Marxist economic theorists.

      In any case, I'm going to assume you're a troll pretending to be an RCP-USA member, though who knows because of Poe's Law and all, making snide tangental comments.

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  5. the only good troll is a dead one!
    i have noticed, on several MLM sites, that there is a particular kind of troll, a Bob Avakian RCP troll, and it is almost impossible (as Poe's law suggests) to tell the difference between a real RCP cadre and a troller pretending to be an RCPer. I don't quite get it, why would someone pretend to be an RCPer and post on other MLM sites. i mean, in particular, the workers dreadnought, which was a very good site, has now become inactive because of a particular troller pretending to be an Avakianist, and apparently, the workers dreadnought could not tell the difference. a particular kind of troll, the avakianist troller.

    good article. I do not think Rawls can just be dismissed by saying he is a Keynesianist. the questions he raises are valid regardless of economics.

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    1. Yes, I find this way of trolling particularly confusing. Odds are, some people just think it's funny for some reason.

      While I don't think we can simply dismiss Rawls, at the end of the day his work is based on a Keynesian understanding of the system. Recall how, in ToJ, he presents the numerical breakdown of various system and, after arbitrarily assigning numbers to the goods, assumes that there are more "goods" to go around in some form of capitalist system then in a system of socialist equality. Within mainstream political philosophy a spectrum tends to be set between theories based on laissez-faire economics and theories based on welfare capitalism. So while it is true that Rawls does indeed raise interesting questions, some of these questions should lead us beyond the answers he proposes. For instance, why does he assume that his Veil of Ignorance thought experiment should lead us to conclude a welfare capitalist system? It seems to me that if people are rendered ignorant of their social position they will not be, as Rawls indicates, rational and self-interested since being self-interested is also something contingent on capitalist social relations.

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