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Nobel laureate economist savages his own profession as clueless and unethical
(www.crikey.com.au)
this post was submitted on 24 Mar 2024
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This is why politics, economics, and history should not be studied independently. It’s why Marx’s critique of classical political economy was that it lacked historical specificity. If economic laws are investigated in the same way as natural laws of physics or biology, then they will appear natural and unchangeable. But economies do change over time, they aren’t eternal and therefore can only be accurately understood in historical context, as transient laws of the current time and place.
Yep. From even before Adam Smith up through Marx, economics wasn’t really this separate discipline. The social sciences were interdisciplinary, and people who studied political economy understood it in a broader context.
But the “problem” was, those political economists (certainly Marx yes, but plenty others; Marx didn’t operate in a vacuum) started to draw some uncomfortable conclusions about capitalism. In comes the marginalist revolution and neoclassical economics. While a lot of these marginalist economists did go on to criticize Marx specifically (i.e. Bohm-Bawerk), really I don’t see the marginalist legacy as something that attempted to “debunk” Marx & co per se. More about ending political economy as a pursuit, and narrowing the focus of “economics” on things like government fiscal and monetary policy. Even in the “debate” between subjective and labor theories of value, I don’t think the SVT is even “wrong”, it just doesn’t tell us anything interesting. It basically says we’re not going to trouble ourselves with understanding the bigger things, we’re just gonna say that wherever price and quantity intersect in a stable situation is “equilibrium”. Killing political economy was what capital needed to get people to stop questioning the economic system and instead focus this new “economic” science on how to be a tool for capital.
Even in disciplines like physics, it is known that one simple set of rules can not be extrapolated to explain all circumstances. The study of aerodynamics separates mechanics into several 'regimes,' because things behave quite differently under subsonic and supersonic conditions. A similar dichotomy exists between traditional Newtonian mechanics and relativity. If the market oracles getting spit out by the Chicago School are treating economics like physics, they are the type of physicist who still upholds the plum pudding model.
It’s worse than that, even. The plum pudding model IIRC was always understood to be an approximation.
Vulgar economy is less forgivable. It is essentially anti-scientific, by rejecting the possibility of economic laws which are not identical with appearances. The vulgar economists are like astronomers still clinging to the Ptolemaic system (geocentric model), because the sky in fact appears to rotate about the earth. Marx here plays the role of Galileo, using science to prove that there are deeper laws governing the motions of celestial objects.
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