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Product Details
| ISBN-13: | 9780745326573 |
|---|---|
| Publisher: | Pluto Press |
| Publication date: | 07/20/2007 |
| Pages: | 232 |
| Product dimensions: | 5.32(w) x 8.46(h) x 0.50(d) |
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CHAPTER 1
Introduction
The label of a system of ideas is distinguished from that of other articles, among other things, by the fact that it deceives not only the buyer, but often the seller as well. (Marx, Capital vol. I, 435–6)
The intimate connection between the pangs of hunger suffered by the most industrious layers of the working class, and the extravagant consumption, coarse or refined, of the rich, for which capitalist accumulation is the basis, is only uncovered when the economic laws are known. (Marx, Capital vol. II, 811)
The good Price was simply dazzled by the enormous quantities resulting from geometrical progression of numbers. Since he regards capital as a self-acting thing, without any regard to the conditions of reproduction of labour, as a mere self-increasing number, he was able to believe that he had found the laws of its growth ... (Marx, Grundrisse, 842–3)
The prestige that has generally been accorded the "science" of economics is a great academic scandal, and in this book I shall argue that as a system of ideas it has generally deceived both buyer and seller. When so-called "economic science" utilizes quantitative, formal and abstract categories without clearly situating them in relation to qualitative, substantive and concrete categories, the effect is to promote in theory the reification or objectification that capitalism promotes in practice. It is to promote the rule of the commodity form (operating through capitalist markets) as though such rule were natural and beyond questioning to the benefit of all. Since the commodity form itself is never questioned, neither are the quantifications attached to it in markets. According to many a Nobel Prize winning economist, in principle, total commodification means that capital can single-mindedly maximize short-term profits and in so doing promote an equilibrium that maximally benefits all. The naked truth is that such an economic orientation ignores the structuring of social demand by class such that even in a state of equilibrium in the most ideal capitalist market system, that which is optimal is so only relative to a social demand already structured by class. And when idealized conceptions of the market that ignore class are applied directly to policy formation in particular historical contexts, the potentials for social injustice loom large. Indeed, a great deal of capitalist history is the history of damage-control operations aimed at containing or covering up the destructive spin-offs of capital accumulation.
By universalizing abstract economic theory and by formalizing it far beyond any contact with reality, mainstream economic theorists fail both to understand the deep economic structures specific to capitalism and to develop the theoretical mediations that might successfully connect abstract theory to historical specificity. In short, their failure is both theoretical and empirical. By assuming the commodity form to be more or less universal and natural, they fail in the all important task of problematizing it. The commodification that they correctly assume to be complete at the level of abstract theory is never complete at the level of history, being always supported politically or ideologically. In moving from the abstract to the concrete, then, it is necessary to theorize different degrees of commodification and different types of supports. Failure to do this will either produce a formalistic economic theory that revolves in outer space, or one that turns history into a function of the economic by failing to develop mediations that would bring in relatively autonomous practices and human agency as they interact with the economic and help shape historical outcomes.
And despite the pronounced "chill" on critical thought that has developed in the United States in the early twenty-first century, there is a growing awareness, both in the US and abroad, of the severe deficiencies of orthodox economics. For example, in June 2000 a group of France's leading students of economics posted a petition on the web protesting against the extreme mathematical formalism of academic economics that turns it into an "autistic science" out of touch with reality, and against the domination of a neo-classical orthodoxy that leaves no room for critical thought (Fullbrook 2003, 1). The Post-autistic Economics Review that grew out of this movement had 5,500 subscribers after only its first two years of publication (ibid., 4). This book can be considered a particularly radical contribution to this movement, for in it I shall argue that almost everyone who has been indoctrinated by academic economics has utterly failed to grasp the potentially unparalleled contributions to economic science made by Marx's economic writings, particularly Capital. And even the famous French Marxist philosopher, Louis Althusser (1970, 15), who in Reading Capital, referred to Marx's Capital as "the founding moment of a science", in his last work (1992, 211), does an about face and refers to "the woolly and literally untenable labour theory of value".
RECOGNIZING THE BRILLIANCE OF MARX'S ECONOMIC THOUGHT
Lest the reader conclude from this blast aimed at mainstream economics that this book will primarily be a debunking project, let me immediately state my main focus. The book is primarily an appreciation of Marx's great achievements in economic theory, achievements that have never been fully recognized even by Marxists. My aim is to bring these achievements out of the shadows of ideological squabbling into the light of day for all to see. This will include not only his explicit theory, but also lines of thought or openings for thought that Marx may only have been dimly aware of if at all. Running through the book as a kind of sub-text will be frequent considerations of why it is that mainstream academic economics has been so blind to the contributions that Marx's economic thought can make to the advancement of economic science today. But instead of presenting yet another interpretation of Marx's economic theory as a whole or responding to all the various and sundry criticisms of his theory, my aim will be to emphasize Marx's most fundamental and lasting contributions and the undeveloped possibilities of his theories. And I shall explore why it is that orthodox economists and even unorthodox economists (including Marxists) have failed to grasp some of Marx's most brilliant achievements. In the process of arguing for a new economics based on Marx's work, I shall at least touch on some issues of ontology and epistemology, or, in other words, on issues concerning the basic nature of economics as an object of knowledge and the sorts of knowledge appropriate to such an object.
It is not the case that Marx's economic writings by themselves offer some kind of total solution to the problems of theorizing the economic, but I shall argue that they do offer a strong basis from which to seek solutions. In some areas of theorizing the economic, Marx makes significant advances, in some areas confusions and contradictions need to be sorted out, and in other areas there are simply openings that, though promising, may be only slightly developed or even just hinted at. It is my aim to draw out Marxian economics in directions that demonstrate its vast superiority over competing approaches. This will include Marx's particular way of theorizing the economic in terms of a commodity form that absorbs and hides power relations, of a theory of surplus-value that both places profit-making at the centre and understands this profit-making in class terms, of an understanding of dialectical reason that moves his theorizing in the direction of a necessary unfolding of the commodity form, of recognizing the need for mediations that enable abstract theory to have at least the potentiality to address historical specificity, of connecting class to the quantitative variables of abstract economic theory, of connecting the economic and the ethical so that economics can be a form of critical theory, and finally of recognizing its necessary multiple-disciplinarity (or perhaps more accurately transdisciplinarity) that is cognizant of the importance of the relations between the economic and other relatively autonomous social practices. And in opposition to the strongly held views of many, I shall argue that the labour theory of value, far from being an incubus on this renewal of economic theory, should be central to it.
SOME SHORTCOMINGS OF ECONOMIC THEORY
Arguably, developing adequate connections between theory and history is the central problem of the social sciences, but because of the way in which economic science is constituted, far from contributing solutions, it has tended to exacerbate the problem. For example, the influential academic economist Joan Robinson, who is sympathetic to Marx, seems to think that Marx is an empiricist offering a model that should be evaluated by positivist criteria. According to Robinson (1966, xi): "The concept of value seems to me to be a remarkable example of how a metaphysical notion can inspire original thought, though in itself is quite devoid of operational meaning." She is breaking with positivism here insofar as she considers that metaphysical notions may not be completely empty, yet she is still operating with the metaphysical/operational binary. If we take "operational" to mean convertible into verifiable propositions, then Marx's theory of value may ultimately be "operational". For example, take the proposition: "In history the capitalist state continually seeks ways to maintain the commodification of labour-power." While this proposition cannot be derived directly from Marx's theory of value, it can be derived from mid-range theory that is informed by Marx's theory of value. And while it may be argued that generating verifiable propositions is of central importance in the natural sciences and strictly empirical social sciences, it is not the central concern in the theory of capital's deep structures. For here we are first of all theorizing how the commodity form by itself can reproduce and expand the basic socio-economic relations of a society. That is, the aim is to lay out the necessary inner connections amongst all basic capitalist economic categories when they are completely subsumed to the commodity form. It is only then that we can begin to think how the theory of capital's deep structures might be utilized as an aid to more concrete levels of analysis. Ultimately, we may want to generate testable propositions, but presumably this would occur primarily at the level of historical analysis where the central concern is with historical causality.
Generating verifiable propositions is not, however, what is most important about the theory of value, and it is certainly not the sine qua non that makes it meaningful. Rather it takes basic economic categories that are meaningful because they are deeply embedded in the everyday life and history of capitalism (for example, commodity, money, capital, wage, price, profit, rent, interest, accumulation) and theorizes how they must interrelate insofar as they are completely commodified and as a result can be thought quantitatively. In other words, economic theory essentially sharpens meanings that are already deeply embedded in history by following the self-reifying logic of capital. It does not proceed through the method of stipulative definitions that is common in empirical sciences where precise boundaries are required for data collecting.
The binary metaphysical/operational, which stems from positivist philosophers like A.J. Ayer (1952), often takes the position that only verifiable propositions are meaningful and that all other propositions are empty, or, what is the same thing, "metaphysical". But this binary, so central to positivist philosophy, not only fails to capture what is going on in Marx's theory, but is also meaningless in its own terms because it cannot be verified. Robinson avoids this by arguing for two kinds of metaphysical propositions: on the one hand those that are meaningless, and on the other, analytic propositions, that though not themselves verifiable, are the basis of an analytic framework that can generate verifiable propositions. Without pursuing this issue in the depth that it deserves, at least one can say that up to this point it is unclear just how we are to assess analytic propositions as opposed to the hot air types of metaphysical propositions. It is also unclear how Robinson would utilize abstract economic theory to understand historical specificity without engaging in extreme forms of economic reductionism.
Another example of a theoretical perspective that is inadequate when it comes to developing theoretical mediations that would connect abstract theory and history is the work of Ian Steedman (1977). For example, he is so taken in by the mathematical "correctness" of his Sraffa-based formalistic model of price determination that he totally rejects the incredibly rich potentials of Marx's value theory as a basis for both understanding capital's inner logic and developing the sort of theoretical mediations (levels of analysis) required for connecting abstract theory with concrete history. Instead he presents a formalistic theory of price determination, that in its universality is not connected to any historically specific mode of production, and then seems more or less lost when it comes to seeking paths that might connect his theory to historical specificity. Indeed, one of my most important arguments is that epistemological projects connected with economic theory that tend to make history a simple function of abstract theory or abstract theory a simple abstraction from empirical history are deeply problematic.
The solution offered here involves the hard work of developing theoretical mediations or distinct levels of theory that can connect theory and history while avoiding all simplistic deductivism and inductivism. In the case of the theory of capitalism, I shall argue that at least three levels of analysis are necessary. Many theorists have advocated some sort of levels of analysis, but few have done much of the hard work required to theorize them and their interconnections. In part this is because modern academia is not organized to provide much support for the interdisciplinary theorizing and collective research that would be necessary. For example, how many trained economists can venture to write at the level of historical analysis where economic causality is mixed with political and ideological causality in the form of relatively autonomous and interpenetrating practices?
There is a tendency for economics to be a hermetically sealed academic discipline, and this coupled with the worship of mathematics means that prices tend not to be seen in their connection with power relations whether economic, political or ideological. In other words, there tends to be little consideration of how, through reification and commodification, power relations have been "disappeared" into quantitative market signals that we submit ourselves to. At the level of abstract economic theory where commodification is assumed to be complete, power relations disappear into seemingly impersonal and neutral numbers that are seen to epitomize economic reason, which, in turn, is thought to epitomize human reason. But in sharp contrast, at more concrete levels of analysis where power relations are not fully commodified, numbers only tell a part of the story. Marx makes it clear that even in pure capitalism where capitalistic rationality is totally in charge, the inequities associated with class exploitation are systematically reproduced.
It is my contention that the quantification of social relations into mathematical equations only makes sense to the degree that we assume that the commodity form by itself rules economic life, or in other words, that all inputs and outputs of capitalistic production are fully and securely commodified. For otherwise power relations that may have qualitative dimensions or may be structural enter the picture and disrupt any quantitative conclusions. But the commodity form is simply the form that private property takes in capitalism, and private property is fundamentally a power relation of exclusion. As Marx (C I, Chs. 6 and 7) has so powerfully demonstrated, pure capitalism rests first of all upon the full commodification of the means of production, which, as a result becomes exclusively owned by the capitalist class, and secondly upon labour power's full commodification that requires that each worker be excluded from ownership of any means of production. When commodification is complete the class relation becomes a relation of structural power (i.e. class struggle is absorbed into this structural relation) that makes it subsumable to mathematical formulations. But at more concrete levels of analysis, where commodification is incomplete, power relations including class struggle will always play a role in determining quantitative outcomes. In other words, at these more concrete levels of analysis, mathematical equations cannot stand on their own as explanations. And in turn, since it is unlikely that in most cases the power relations can be adequately understood in purely quantitative terms, qualitative analysis will need to play a role. It is only in the context of a theory of a purely capitalist society where power relations get fully absorbed into socio-economic structures subsumed completely to the commodity form, that mathematical formulae can be employed. Clarity on this point is essential to the effective use of mathematics in economic theory.
(Continues…)
Excerpted from "Economics Transformed"
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Copyright © 2007 Robert Albritton.
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