‘Economics’ without qualifiers

This afternoon I had a rather puzzling and at times disconcerting conversation with a staunch defender of neoclassical economics. The catch is that my interlocutor prefers not to use the epithet: it is simply ‘economics’. I will come back to that in a moment. First, let me recall some basic propositions that were put to me:

1. ‘Economics’ provides a set of tools in order to analyse an objectively existing reality.

2. “Economics’ asks the fundamental questions of life and is therefore the basis of all other inquiry.

3. Mainstream economics is incredibly diverse and can incorporate all perspectives (at last an epithet).

Let’s take each in turn. The first is pretty much what Lenin argued in his worst and very undialectical book, Materialism and Empirio-Criticism. The world exists out there and it is the task of science to come to a greater understanding of that world. Our only limitations are those of the tools we use. I’m told that most neoclassical economists work with such an assumption. On the one hand, I want to ask, what world? Capitalism? Or is it neutral? On the other hand, I guess it doesn’t leave much room for the possibility that the independently existing ‘economy’ was a creation of a new discipline needing a topic.

Second, not much needs to said here, except that it is a classic case of disciplinary chauvinism.

Third, when an epithet does appear, it is a pseudo-epithet, since ‘mainstream’ claims what the solitary ‘economics’ claims as well. As for the assertion of diversity and flexibility, it is the classic assertion of the status quo: there, there, don’t worry, your perspective will also be taken into account. No need to get too excited or offer any challenges, since we are a broad church.  The present world is fine, after all.

Finally, let me return to the quiet dropping of the epithet ‘neoclassical’. This is a telltale and imperialistic move that makes a universal claim from a dodgy particular. Cover the tracks, have a shit, shower, and shave, and people will soon forget the particularity of the term itself. This is comparable to the use of ‘democracy’, rather than Greek democracy, ancient Near Eastern democracy, bourgeois democracy,or socialist democracy.

Recently, I came across a similar process in a different context. I had passed on a document originally drafted by some people from eastern Europe. In it they spoke of ‘Orthodox’ churches and countries. Some other readers immediately asked, ‘don’t you mean “Eastern Orthodox”‘? The catch here that those readers are precisely the ones who use ‘Catholic’ when what is really meant is the Roman Catholic Church. All of which reminds me uncannily of the early church and its councils, where all manner of groups claimed to be ‘mainstream’, ‘catholic’ or ‘orthodox’, and denounced their opponents as heterodox.

As I was pondering some of these things on the ride home, I went from ‘bugger the blinkers of neoclassical economics’ to being reminded of Wallerstein’s observation:

The institutionalization of history and the three nomothetic disciplines – economics, sociology, and political science – in the last third of the nineteenth century and the first half of the twentieth took the form of university disciplines wherein the Western world studied itself, explained its own functioning, the better to control what was happening (Wallerstein, Modern World System vol. IV, p. 264).


10 thoughts on “‘Economics’ without qualifiers

  1. It seems you had a fun discussion.

    Might I suggest that you see ‘mainstream economics’ as a process in constant motion, change, transformation, development; and the attempt to trace out the internal connection that makes a continuous whole of all this movement and development.

    Try this:

    Economics doesn’t ask the fundamental questions of life., it asks questions that are so general that they cease to be useful.

    The standard definition current today derives from Lionel Robbins’s “An Essay on the nature and significance of Economic Science” (1932):
    “Economics is the science which studies human behaviour as a relationship between ends and scarce means which have alternative uses.”

    The assumption is that wants are infinite:
    “Scarcity occurs when people want more of something than is readily available. In economics, scarcity forces people to make choices, as everyone cannot have everything. Without scarcity, an economy cannot exist.”

    This is so general that it is ahistoricl and would cover any life form that had infinite wants. It also shifts ‘economics’ from being about ‘the (commerical) economy’ into ”the science of choice”.

    Robbin’s definition replaced Alfred Marshall’s version that was implicitly specific to modern commercial society:

    “Economics is a study of men as they live and move and think in the ordinary business of life. But it concerns itself chiefly with those motives which affect, most powerfully and most steadily, man’s conduct in the business part of his life. Everyone who is worth anything carries his higher nature with him into business; and, there as elsewhere, he is influenced by his personal affections, by his conceptions of duty and his reverence for high ideals. And it is true that the best energies of the ablest inventors and organizers of improved methods and appliances are stimulated by a noble emulation more than by any love of wealth for its own sake. But, for all that, the steadiest motive to ordinary business work is the desire for the pay which is the material reward of work. The pay may be on its way to be spent selfishly or unselfishly, for noble or base ends; and here the variety of human nature comes into play. But the motive is supplied by a definite amount of money: and it is this definite and exact money measurement of the steadiest motives in business life, which has enabled economics far to outrun every other branch of the study of man. Just as the chemist’s fine balance has made chemistry more exact than most other physical sciences; so this economist’s balance, rough and imperfect as it is, has made economics more exact than any other branch of social science. But of course economics cannot be compared with the exact physical sciences: for it deals with the ever changing and subtle forces of human nature.”

    “Principles of Economics” by Alfred Marshall (1890) Chapter 2, The Substance of Economics
    “Money may not be the root of all evil, but it is the root of economic science.” Wesley C. Mitchell (quoted in http://www.econlib.org/library/NPDBooks/Kirzner/krzPV5.html )

    The next move is to ask:
    “Why the change?”

    The date of Robbins’s essay, 1933, is significant. Mainstream (Marshallian as it was then) economics fail the foresee the Great Depression. It was also bankrupt when it came to practical policies to get out of the mess. There were two options:
    reinvent ‘economics’ (Keynes)
    redefine ‘economics’ (Robbins)

    Keynes gave the mainstream a good run for its money but his work was being captured and incorporated from the very start. Robbins provided the prefered path. This insulated ‘economics’ from the real world.

    1. The narrowing of the focus is quite clear as the discipline enters the 20th century. But what interest me is the sheer naivete of the basic postulate – as it was put to me – that economics asks what motivates human beings to do things for their own benefit. That is, what’s in its for me? The trap here is multiple – beyond the sheer banality you point out so well: a) it assumes human nature is always the same; b) it assumes we seek our own improvement, completely neglecting the fact we more often opt for what is to our detriment; c) it misses any robust materialist doctrine of evil.

      1. “But what interest me is the sheer naivete of the basic postulate – as it was put to me – that economics asks what motivates human beings to do things for their own benefit.”

        Is this what you were told? If so your interlocutor displayed his/her ignorance of neoclassical economics (not an unusual trait in neoclassical economists).

        Neoclassical economics doesn’t ask what motivates human beings, it assumes that they are motivated by self-interest.

        For a brief overview see Number 4 of Mankiw’s 10 Principles of Economics

        The following explains it rather well I think:

      2. Thanks George – also for highlighting my syntactical slip. Yes, of course, self-interest, which is really a slightly politer term than greed.
        I have just decided not to engage in a workshop/debate with aforesaid neoclassical economist. Apart from the fact that it would achieve little, there was something superciliously unpleasant about the whole conversation.

  2. On (1) – your interlocutor was correct, but the point was of no value. The object of inquiry is objective – it refers to the actually existing or once-actually existing sources and processes of production. But the tools of inquiry are not “objective” (a category error, as the term refers to reality not method). Here a distinction between objectivity and neutrality is useful, as Thomas Haskell makes. The distinction avoids the confusion of applying the term to both the object of inquiry and the method of so inquiring. And while economics should be an objective field, it is not neutral. The lack of neutrality also means that the boundaries of what is termed “economics” is an arbitrary delimiting of reality (whose boundaries are not necessarily our own, and never are so in the analysis of human activity). This means that “economics”, while certainly created at a point in time, is not necessarily wholly unrealistic or a merely idealistic creation. There is a mix of objectivity and bias all the way down. And so while your interlocutor’s point concerning the objectivity of what is arbitrarily delimited as “the economic” was correct, it is is shown to be of no value in an argument over which method of analysis is better – that is, more objective, real.

  3. Supply and demand dictates price [value], pretty much.
    So we have been told.

    Know the movie “Lawrence of Arabia”, of course you do, particularly this scene?

    It struck me that this scene, admittedly fictional, illustrates the price of a scarce commodity ie water in a desert.

    To Sherif Ali its minimal, he needs to expend time and energy watching over it but the water itself is free, in fact Omar treats the water bag roughly although simultaneously being possessive [“this is my well”] and obviously valueing it highly.

    For Lawrence the water is free. Despite being in a god forsaken desert [sorry about that] he is ‘welcome’ to drink the water.
    He is a guest.

    But for Kabbas the price of drinking the water was death. “The well is everythng”. “He is nothing”. The ‘other’.

    The prices of water in this one place varies according to social and cultural values.
    People are setting the prices, not the ‘invisible hand’ of a disembodied ‘free market”.

    Try putting that on a X/Y axis.

  4. Political economy is a valid realm of study. Neoclassical or positive economics is only ideology (in the bad sense). Its whole mathematical apparatus is just made up. Unlike the physicists idea gases which derive from a useful simplification of empirical behavior, their textbook graphs of supply and demand and marginal utility are from their impoverished imagination. Any student of neoclassical economics who thinks he understands economy does not understand economy.

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