There has been controversy this week regarding the praiseworthy decision of more than seventy Economics 10 students to walk out of N. Gregory Mankiw’s class in order to draw attention to the course’s neoliberal inclinations and to participate in the Occupy Wall Street protests the corporatization of higher education and the backbreaking burden of student debt. As could be expected, a series of comments followed, some of which were particularly reactionary and vitriolic. According to Harvard Republican Club Secretary Aditi Ghai ’14, “the class is about pure economic efficiency. Ideology comes into play when we determine how to balance efficiency with social equity.” Jeremy Patashnik’s critical analysis in the Harvard Political Review is more careful, yet it mistakenly concludes that Mankiw’s course teaches students to separate positive questions from normative ones.
The reasoning behind the above comments has its roots in the mainstream/neoclassical theory that dominates today’s academic economics departments. The problem lies in the fact that this orthodoxy is taught to prospective economics students not as one of several competing theories, but as the only theory, a positive science that can be used to “formulate theories with mathematical precision, collect huge data sets on individual and aggregate behavior, and exploit the most sophisticated statistical techniques to reach empirical judgments that are free of bias and ideology…”[1] Orthodox economists, beyond their key differences (such as whether they belong to the new classical or new Keynesian school, like Mankiw),[2] tend to share this contention. While it is true that this way of thinking about economics has provided us with many empirically useful statistical and econometric models, these sophisticated and elegant mathematical models cannot compensate for incorrect basic assumptions.[3] In his Monthly Review essay “Why Socialism?”, Albert Einstein expressed his skepticism regarding such assumptions, as they corresponded to the predatory phase of human development, not to democratic socialism: “we should be on our guard not to overestimate [economic] science and scientific knowledge when it is a question of human problems; and we should not assume that experts are the only ones who have a right to express themselves on questions affecting the organization of society.”
As a thorough critique of these assumptions cannot be attempted here, it suffices to say that the conceptual apparatus of neoclassical economics is attempted to be so constructed as to transcend any particular set of social/class relations, to be “objective” and timeless. It thus fails to understand capitalism as a particular historical form of society, and to study economics as “the science of the social relations of production under historically determined conditions.”[4] Above all, as its focus is on the way in which economic relations appear on the surface, i.e. as relations between things, it is not able to analyze the exploitative and alienating relations that underlie the process of exchange, relations that are becoming all the more clear to broad masses of discontented and dispossessed students and workers (those engaging in both manual and intellectual labour, the employed and the unemployed, unionized and non-unionized, legal and ‘illegal’ workers) as a result of the crisis.
The fact that the majority of academic economists rarely address these concerns is certainly not a matter of intelligence, but rather one of ideology and class. As Karl Marx wrote: “The ideas of the ruling class are in every epoch the ruling ideas: i.e., the class which is the ruling material force of society, is at the same time its ruling intellectual force.”[5] As the representatives of society’s ruling ideas in a crucial academic discipline, the role of neoclassical economists thus goes beyond positive scientific inquiry into the nature and causes of the wealth of nations. Understanding the dominance and supposed self-evident truth of these ideas requires an examination of the role of intellectuals in capitalist society though, and here it is important to recall Antonio Gramsci’s discussion of organic intellectuals: “The intellectuals are the dominant group’s deputies exercising the subaltern functions of social hegemony and political government. These comprise: 1. The ‘spontaneous’ consent given by the great masses of the population to the general direction imposed on social life by the dominant fundamental group… 2. The apparatus of state coercive power which ‘legally’ enforces discipline.”[6]
It is because of the above reasons that orthodox economics is in essence normative, and at its core vulgar and apologetic: it is more interested in defending and rationalizing the interests of the capitalist class and its hangers-on (the 1%) than in scientific impartiality and critical inquiry into the historically specific material and social relations of accumulation and production. Neoclassical economics is, in short, the economics of capital. The urgent need though is for a political economy of the working class (the ‘old’ proletariat and the ‘new’ precariat, which must come to comprise a hegemonic bloc), a theoretical foundation for the liberation of humanity, for a society where the free development of each individual is a condition for the free development of all. Although Marxist, neo-Ricardian, and post-Keynesian radical political economists integrate the social/class relations of capitalism into their theories, for orthodox economists to join their heterodox colleagues would require nothing less than a revolution in their way of thinking. It would involve, as Marx argued, going beyond the inverted reality of individual liberty and equality as they appear in the market, and confronting the inequality and unfreedom of the capitalist political economy.[7] No less important, it would involve seeking to understand capital not as a thing, but as a fundamental social relation of production and as the independent social power of capitalists over workers. Politically, it would entail abandoning the principles of neoliberalism (and their theoretical basis: rational expectations, etc.), resisting the commodification of the commons, and fighting for an economy geared towards the satisfaction of human needs and built upon the foundations of decency, justice, equality, decentralized planning, and workplace democracy.
In conclusion, the instinctive reaction of many Harvard students to the actions of those who walked out of class is regrettable, and indicative of the dismal state of “open” academic discourse at this institution. In opposition to The Harvard Crimson editors’ claim that Mankiw’s class provides the necessary academic grounding for the studying of economics as a social science, we should assert that the disciplines of political science, sociology, economics, history, and philosophy are deeply interconnected, a reflection of the dialectical interaction between the economy, the state, politics, social/class relations, and ideology. To argue that economics is an objective science divorced from these spheres, and that anything outside the orthodoxy belongs to the realm of “social theory,” is precisely to understand economics as a vulgar bourgeois science, one that views capitalism’s crises as natural disasters, rather than as products of the system’s internal contradictions, and that considers capital-labor relations voluntary (in reality, for those who only have their labor-power to sell, it is an issue of work or die). Against this, it is necessary to approach social science with the courage to undertake “ruthless criticism of everything existing,” not afraid of its own conclusions or of conflict with the powers that be.[8] To take a step in this direction means at once to take sides in regard to the burning question that confronts humanity in our time: socialism or barbarism.
Panagiotis Angelopoulos ‘12, History concentrator, Economics as a secondary field
[1] N. Gregory Mankiw, “The Macroeconomist as Scientist and Engineer.”
[2] It is important not to confuse new Keynesian economics, a school that cedes long-run analysis to the classical orthodoxy, with the thought of John Maynard Keynes, and its potentially radical implications for society’s control over investment and the economy. It was an earlier strand of this school (the neoclassical synthesis) that Keynes’s Cambridge colleague Joan Robinson derided as “bastardized Keynesianism.” As Stephen Marglin argues, Keynes would surely be turning over in his grave if he knew that The General Theory had been turned into one of short-run frictions.
[3] Paul Krugman, “How Did Economists Get it So Wrong?” The New York Times, 09/02/2009. Krugman, though also a neoclassical economist, provides criticism of some of the more egregious aspects of his colleagues’ work.
[4] Paul M. Sweezy, The Theory of Capitalist Development. Sweezy, one of the most influential Marxian economists of the twentieth century, studied at Harvard during the 1930s and 1940s, where he engaged in a series of legendary debates with Joseph Schumpeter, that giant of the economics profession. It was a time when, under the weight of the Great Depression and the destitution that it caused, the discipline was necessarily more open to heterodox views. His work, together with that of Ernest Mandel, Karl Polanyi, David Harvey, Richard Wolff, and many others provides an excellent introduction to many of the positions defended in this article.
[5] Karl Marx and Friedrich Engels, The German Ideology.
[6] Antonio Gramsci, Selections from the Prison Notebooks.
[7] It should be noted that the great economic thinkers of the eighteenth and nineteenth centuries (Adam Smith, David Ricardo, John Stuart Mill, Karl Marx) regarded themselves as political economists, as they had a more fundamental understanding of the relations between civil society, the market economy, and the state/political sphere
[8] Karl Marx, For A Ruthless Criticism of Everything Existing (Letter to Arnold Ruge).