Monday, August 6, 2012

Manju asks a question

He writes: "I have a question about the intellectual history of economics. (I'm a newbie trying to self-teach myself the this might sound stupid). When did the market-based economy become the consensus for academic economists?

Socialism, Marxism, etc were ideologies that held great sway among many great intellectuals for a long time. But these folks appear to be mostly philosophers and sociologists and various public intellectuals.

So, was there a time when Keynesian and Classical economists stood tougher on one side of a university's econ department and duked it out with the Socialists and Marxists on the other? If so, when did this end

My impression is that Marxism and socialism were fairly defunct even by the time Keynes came along, such that he could dismiss them unceremoniously and without a whole lot of analysis without anyone considering that particularly problematic. As Manju says, it seems to remain popular among non-economist intellectuals (and that continues to today), and some of their arguments were economic rather than simply social. But just because their arguments were economic doesn't mean that economists took them particularly seriously.

Still, one of my favorite Keynes smackdowns of Marxism is his1926 review of Trotsky's book Where is Britain Going?.This is my favorite part of that review (bolding is mine):

"But what are his assumptions? He assumes that the moral and intellectual problems of the transformation of Society have been already solved--that a plan exists, and that nothing remains except to put it into operation. He assumes further that Society is divided into two parts – the proletariat who are converted to the plan, and the rest who for purely selfish reasons oppose it. He does not understand that no plan could win until it had first convinced many people, and that, if there really were a plan, it would draw support from many different quarters. He is so much occupied with means that he forgets to tell us what it is all for. If we pressed him, I suppose he would mention Marx. And there we will leave him with an echo of his own words – “together with theological literature, perhaps the most useless, and in any case the most boring form of verbal creation.”

Trotsky’s book must confirm us in our conviction of the uselessness, the empty-headedness of Force at the present stage of human affairs. Force would settle nothing – no more in the Class War than in the Wars of Nations or in the Wars of Religion. An understanding of the historical process, to which Trotsky is so fond of appealing, declares not for, but against, Force at this juncture of things. We lack more than usual a coherent scheme of progress, a tangible ideal. All the political parties alike have their origins in past ideas and not in new ideas – and none more conspicuously so than the Marxists. It is not necessary to debate the subtleties of what justifies a man in promoting his gospel by force; for no one has a gospel. The next move is with the head, and fists must wait."

Of course the Soviets had their own economists, and there was a mid-twentieth century of socialist calculation which was very important. In a lot of ways, though, this wasn't about Marxist economics at all. This was about neoclassical economics and whether the market could be reproduce under state socialism. Does that make sense? I simply mean that if Manju is looking for a critique of Marxist economic theory, the socialist calculation debate isn't really about that. If he is looking for an argument about whether socialism could work in practice, Marxist theory of the economy be damned, then that debate is worth looking at.

Bartleby does not like Marxist economics:


  1. I dont know if you can think about it as a split within economic departments so much as a split between departments.

    And I dont think Marxism died before Keynes. In fact, Cambridge after Keynes devoted a lot of energy to synthesizing/debating Marxian and Keynesian economics and the "capital controversy" debate was a debate between post-Keysnian Marxist types and the neoclassicals.

    Joan Robinson wrote a lot about the differences between classicals, keynsians and marxists. Here collected works vol 2 is a good resource.

    This is also an interesting read:

    1. Ya, that was an interesting letter.

      But there are Marxists in econ departments today. I don't think - even back then - it was a genuine force to combat. I'm not sure it ever was among British or American economists. Certainly there were Marxists around.

      Anyway, Manju, I'm no expert in the subject, but I did think you'd like that Trotsky review.

      It also may have had a more substantial presence on the continent than I'm aware of.

    2. Well i think the capital controversy was an instance in which marxian economic thinking was a genuine force in the debate.

      I mean, i think its important to distinguish here between "soviet" economics and marxian economics. I would define "marxian" economics as a tradition that places marx in the intellectual lineage of smith and ricardo (as a classical economist) as opposed to the intellectual linage of marshall (marginalist economics).

    3. The Marxian tradition was clearly not a spent force in Keynes's time. I think we can see this by observing the publication afterward of Joan Robinson's Essay on Marxian Economics, Joseph Schumpeter's Socialism, Capitalism, and Democracy, and all of Sraffa's works, among others. Historians of economics invariably have to take Marx seriously, too, because his Theories of Surplus Value is such a useful overview of the early political economists.

      It also needs to be said that English-language scholarship on Marx was mediocre until well after World War II, with most studies (not including Robinson's) focusing exclusively on volume I of Capital, to the exclusion of the other two volumes and Marx's plentiful other economic writings.

    4. Harold Laski was also important.

  2. I don't know why Daniel doesn't just respond with, "I have no idea".

    I don't think that you can find a fair intellectual debate between Marxist and bourgeois economics.

    Anyways, I want to add some readings to the above:

    M. C. Howard and J. E. King (1992). A History of Marxian Economics (2 volumes).
    Michio Morishima (1973). Marx's Economics: A Dual Theory of Value and Growth.
    Ian Steedman (1977). Marx After Sraffa.
    Richard D. Wolff and Stephen A. Resnick (1987). Economics: Marxian versus Neoclassical.

    Meghnad Desai has had books on Marx written decades apart. Samuel Hollander has just had a book published on Marx.

    Basically, a vast literature exists, and most economists are almost completely ignorant.

  3. Will: I'm not sure you can consider Schumpeter a Marxist. He respected Marx and read Marx and considered his arguments, but I think Schumpeter can be safely considered to be supportive of the classical liberal tradition. Thomas K. McCraw's biography of Schumpeter, Prophet of Innovation, is a pretty good source on the life and intellectual thought of Schumpeter.


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