[lbo-talk] Marx's critique of neo-classical economics

[Sean Andrews]

On 4/1/07, James Heartfield <Heartfield at blueyonder.co.uk> wrote:

> Yes, I was thinking of his essays "pure economics" and "the ideology of
> political economy" in the book Spectres of Capitalism, which are well
> written (the whole volume is pretty interesting) but in the end do not, I
> think go beyond Keynes' scepticism towards the grand narrative of the
> equilibriating market system.

That's the one I've read, though I would have to review it to get a
sense of his actual argument.  How much further does can one go beyond
this skepticism since the proponents of this view have such a lock on
the public discourse--even among supposed leftists?

> It is a case in point, I don't think that the Marxists ever wrote a good
> critique of neo-Classical economics, preferring to surrender the field to
> the Keynesians, and piggy-back theirs. I would be interested to know.

I think the problem with Marxist in the Keynesian era was that it
largely got taken into the fold of the Cold War/New Deal.  It became
accepted that the free market utopia that Marx was largely building on
was unlikely to be resumed for obvious political (and seemingly
economic) reasons.  Thus, at least as Anderson puts it in
/Considerations on Western Marxism/, using Sweezy as an example:

Blockquote:
Sweezy's book, written in the environment of the New Deal, implicitly
renounced the assumption that crises of disproportionality or
underconsumption were insurmountable within thecapitalist mode of
production, and accepted the potential efficacy of Keynsian
counter-cyclical interventions by the State to assure the internal
stability of imperialism.  The ultimate disintegration of capitalism
was for the first time entrusted to a purely external determinant –
the superior economic performance of the Soviet Union and the
countries which could be expected to follow its path at the end of the
War, whose 'persuasion effect' would eventually render possible a
peaceful transition to socialism in the United States itself.  Within
this conception, /The Theory of Capitalist Development/ marked the end
of an intellectual age (23).

I'm kind of a sucker for anything Anderson writes, though, so maybe
he's being hyperbolic here.

As for the dearth of other Marxist critiques, I think some of this
reified notion of perpetual Keynesian state wore off and, since the
1970s there has been a bit of a new attempt.  I think the early
Regulationist School (particularly Aglietta's major book and then
Lipeitz following him in economics; Jessop took this in a more
political science direction, but retains some concern for the
economic) made some improvements on Keynes in a Marxist direction.
And Harvey's /Limits to Capital/, though I'll admit I am only part way
through it, seems a significant Marxist improvement on Keynes.  And
though he's probably less radical than most, Pollin does a fair job
most of the time of trying to synthesize Marx and Keynes (among
others).  And I think our own Michael Perelman's book /The Invention
of Capitalism/ is a useful critique of many of the political movements
involved in instituting (neo-)classical economics qua "political
economy and the secret history of primitive accumulation."  It's not
necessarily Marxist per se, but it certainly seems sympathetic to
those views. It might be a stretch, but one could even include a
certain list manager in this.  Then again, I suppose _Wall Street_
(which includes more explicit references to Marx and Keyenes than the
latest) is much more a critique of current fashions and trends of his
closest geographical neighbors rather than the neo-classical tradition
per se.

Then there are people like Meghnad Desai who could be said to provide
a Marxist critique of neo-classical economics, if, in fact, Desai
believed that Marx would have any critique of the neo-classical
tradition at all (cf. The Revenge of Marx).  I don't think that really
counts, but it is definitely an interesting exercise.

But after writing all of this, I'm feeling like maybe I'm having a lot
of seepage between my categories and definitions so maybe none of this
exemplifies what you're talking about, which, of course, would be a
good thing to know.

s