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Heteconomist lists 12 achievements of economics: a response

November 3, 2011

Has the discipline of economics provided a single positive contribution to human thought?  Peter at the always insightful Heteconomist struggles mightily to come up with a list of 12 key achievements.  All are from the far left frontier – Marx, Kalecki, Keynes, and Modern Monetary Theory – so it’s pretty questionable whether they should even be included within the discipline of economics as it’s widely understood and practiced in the main universities.  I agree with each of the specific items on the list, the trees so to speak, but I do have a perhaps minor quibble with the overall presentation as I think it misses a more forest wide perspective.  Let’s go right to the conclusion of the post:

To sum up in one sweeping motion the economic knowledge gleaned so far in the history of economic thought, … I would say that the economic outcome is not deterministic – i.e. predetermined by supply-side factors – but rather the result of a social process characterized by power differences and struggles, class-interested behavior, and decisions that are made under uncertainty. Nevertheless, a sovereign currency issuer has within its capacity the maintenance of full employment alongside price stability.

I find something missing here.  Is capitalism a system of class rule similar in many ways to its feudal predecessor or a much more benign sounding “social process characterized by power differences and struggles, class-interested behavior, and decisions that are made under uncertainty”?  It would seem pretty lame to describe feudalism or an oligarchic dictatorship in this way.  I think we need to be more direct and far less “economic” so as to avoid giving a misleading picture of what the system really is. Providing a pleasing ideological characterization of capitalism, after all, has been the primary “achievement” of economics from its beginning.

If it’s true that capitalism is a system of power, then isn’t it best analyzed from a political perspective?  Who rules and how is rule maintained are the key questions and they’re probably best answered through sociology and/or anthropology.  The very idea of separating economics from the political is a very political idea benefiting specific interests .  This is a long held Marxian insight and I think any summary of “economic” thought should start with the disclaimer that there really is no such thing as economics.

Finally, Peter says that despite “power differences”, a sovereign currency issuer can maintain full employment.  But isn’t the reason “sovereigns” don’t actually do this traceable directly to who holds power?  Are we saying anything more than the self evident truth that the only real limits are resources, technology, and the environment?  That if power weren’t held by a certain small class, society could live pretty well?  If so, shouldn’t we just say it?  Again, talking in “economic” terms tends to hide the political.

These are just some friendly  thoughts and I think the Heteconomist is a great site.  Speaking of economics, I’m quite happy to see a number of Harvard economics students walked out of a class given by Gregory Mankiw today.  I sense change in the air!

From → Capitalism

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