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.