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

[bhandari at berkeley.edu]

In reply to Sean...
Obviously drunk from the late 90s boom and antagonised by the
anti-globalisation protests, Desai wrote a book which seemed out of date
upon publication as Bush and Blair marched to war. A more realistic
perspective has been provided by Prem Shankar Jha Twilight of the Nation
State: Globalisation, Chaos and War as we do need to understand how and
why the US is responding to a loss of hegemony in the context of the
globalisation of capital and why the struggle over control of investment
spheres again has become a leading threat to world peace. Jha is former
editor of The Hindu, New Delhi's leading  morning daily, and the book
seems to have been written when he was a Fellow at Harvard.
At any rate, Desai does not develop Marx's critique of Smith's
individualism, adding up theory of value, or monetary theory. Desai does
not understand Marx's critique of Hegel's theory of civil society in
Philosophy of RIght (see interesting piece by Sean Sayers in latest
Science and Society).  As for Marx, he does not understand the
contradiction between the law of value and the equalisation of the profit
rate is not logical but real, inherent to system. It's not just a
mathematical problem to be solved. He argues that Marx's crisis theory is
confused but misreads the intent of the reproduction schema which do not
represent the possibility of capitalism as a stable dynamical system.
And Desai suffers from the positivism which infects economics--see Duncan
Foley's very thoughtful Adam's Fallacy. He thinks he can simply describe
capitalism as to what kind of system it is. Yet he has an ethical theory
as you suggest: an equal right of all to equal opportunities for free self
development, can and should be overriden for the sake of a higher level of
social productive development for all. But is the position defensible? He
would have to recognize his implicit ethical commitments to defend them
but he is a positivist economist so he can't do that. He cheerleads for
the globalisation of capital both because he thinks it's in the nature of
an unchallengeable capitalist system and because he does believe that it
is good.
And it isn't. See the ethical theory defended by John Torrance in Karl
Marx's Theory of Ideas.
Recently he has defended partially Ezra Pound's monetary demagoguery as if
it is not infected, root and branch, with anti-Semitism. I argued with him
a bit through email, and posted my criticism on marxmail.org
Rakesh
ps don't know where to begin with the Austro Marxists except Bottomore's
collection of their writings and Hilferding's two major economic
works--critique of Bohm Bawerk and Finance Capital.