Globalization—how did they get it so wrong?

There is perhaps no more cherished an idea within mainstream economics than that everyone benefits from free trade and, more generally, globalization. They represent the solution to the problem of scarcity for the world as a whole, much as free markets are celebrated as the best way of allocating scarce resources within nations. And any exceptions to free markets, whether national or international, need to be criticized and opposed at every turn.

That celebration of capitalist globalization, as Nikil Saval explains, has been the common sense that mainstream economists, both liberal and conservative, have adhered to and disseminated, in their research, teaching, and policy advice, for many decades.

Today, of course, that common sense has been challenged—during the Second Great Depression, in the Brexit vote, during the course of the electoral campaigns of Bernie Sanders and Donald Trump—and economic elites, establishment politicians, and mainstream economists have been quick to issue dire warnings about the perils of disrupting the forces of globalization.

I have my own criticisms of Saval’s discussion of the rise and fall of the idea of globalization, especially his complete overlooking of the long tradition of globalization critics, especially on the Left, who have emphasized the dirty, violent, unequalizing underside of colonialism, neocolonialism, and imperialism.*

However, as a survey of the role of globalization within mainstream economics, Saval’s essay is well worth a careful read.

In particular, Saval points out that, in the heyday of the globalization consensus, Dani Rodrick was one of the few mainstream economists who had the temerity to question its merits in public.

And who was one of the leading defenders of the idea that globalization had to be celebrated and it critics treated with derision? None other than Paul Krugman.

Paul Krugman, who would win the Nobel prize in 2008 for his earlier work in trade theory and economic geography, privately warned Rodrik that his work would give “ammunition to the barbarians”.

It was a tacit acknowledgment that pro-globalisation economists, journalists and politicians had come under growing pressure from a new movement on the left, who were raising concerns very similar to Rodrik’s. Over the course of the 1990s, an unwieldy international coalition had begun to contest the notion that globalisation was good. Called “anti-globalisation” by the media, and the “alter-globalisation” or “global justice” movement by its participants, it tried to draw attention to the devastating effect that free trade policies were having, especially in the developing world, where globalisation was supposed to be having its most beneficial effect. This was a time when figures such as the New York Times columnist Thomas Friedman had given the topic a glitzy prominence by documenting his time among what he gratingly called “globalutionaries”: chatting amiably with the CEO of Monsanto one day, gawking at lingerie manufacturers in Sri Lanka the next. Activists were intent on showing a much darker picture, revealing how the record of globalisation consisted mostly of farmers pushed off their land and the rampant proliferation of sweatshops. They also implicated the highest world bodies in their critique: the G7, World Bank and IMF. In 1999, the movement reached a high point when a unique coalition of trade unions and environmentalists managed to shut down the meeting of the World Trade Organization in Seattle.

In a state of panic, economists responded with a flood of columns and books that defended the necessity of a more open global market economy, in tones ranging from grandiose to sarcastic. In January 2000, Krugman used his first piece as a New York Times columnist to denounce the “trashing” of the WTO, calling it “a sad irony that the cause that has finally awakened the long-dormant American left is that of – yes! – denying opportunity to third-world workers”.

The irony is that Krugman won the Nobel Prize in Economics in recognition of his research and publications that called into question the neoclassical idea that countries engaged in and benefited from international trade based on given—exogenous—resource endowments and technologies. Instead, Krugman argued, those endowments and technologies were created historically and could be changed by government policies, including histories and policies that run counter to free trade and globalization.

Krugman was thus the one who gave theoretical “ammunition to the barbarians.” But that was the key: he considered the critics of globalization—the alter-globalization activists, heterodox economists, and many others—”barbarians.” For Krugman, they were and should remain outside the gates because, in his view, they were not trained in or respectful of the protocols of mainstream economics. The “barbarians” could not be trusted to understand or adhere to the ways mainstream economists like Krugman analyzed the exceptions to the common sense of globalization. They might get out of control and develop other arguments and economic institutions.

But then the winds began to shift.

In the wake of the financial crisis, the cracks began to show in the consensus on globalisation, to the point that, today, there may no longer be a consensus. Economists who were once ardent proponents of globalisation have become some of its most prominent critics. Erstwhile supporters now concede, at least in part, that it has produced inequality, unemployment and downward pressure on wages. Nuances and criticisms that economists only used to raise in private seminars are finally coming out in the open.

A few months before the financial crisis hit, Krugman was already confessing to a “guilty conscience”. In the 1990s, he had been very influential in arguing that global trade with poor countries had only a small effect on workers’ wages in rich countries. By 2008, he was having doubts: the data seemed to suggest that the effect was much larger than he had suspected.

And yet, as Saval points out, mainstream economists’ recognition of the unequalizing effects of capitalist globalization has come too late: “much of the damage done by globalisation—economic and political—is irreversible.”

The damage is, of course, only irreversible within the existing economic institutions. Imagining and enacting a radically different way of organizing the economy would undo that damage and benefit those who have been forced to have the freedom to submit to the forces of capitalist globalization.

But Rodrik and Krugman—and mainstream economists generally—don’t seem to be interested in participating in that project, which would give the “barbarians” a say in creating a different kind of globalization, beyond capitalism.

 

*Back in 2000—and in a series of articles, book chapters, and blog posts since then—I have attempted to rethink the relationship between capitalist globalization and imperialism. Marxist economist Prabhat Patnaik has also made the case for the continuing relevance of imperialism as an analytical construct for understanding and challenging effectively the logic and dynamics of contemporary capitalism.

Hundred years of empire

Just a few years ago, students at Oberlin College protested the college’s decision to fund a talk by Jeffrey Sachs, whom they considered to be a “neoliberal imperialist liar.”

As regular readers of this blog know, I am quite sympathetic with the Oberlin students’ concerns. I have called Sachs to task on many occasions (e.g., here, here, and generally here).

But it’s also true Sachs is changing his tune, at least on some issues. Here he [ht: ja] is on interventions by the United States in the Middle East:

It’s time to end US military engagements in the Middle East. Drones, special operations, CIA arms supplies, military advisers, aerial bombings — the whole nine yards. Over and done with. That might seem impossible in the face of ISIS, terrorism, Iranian ballistic missiles, and other US security interests, but a military withdrawal from the Middle East is by far the safest path for the United States and the region.

And then Sachs ups the ante: “America has been no different from other imperial powers in finding itself ensnared repeatedly in costly, bloody, and eventually futile overseas wars.”

That’s right: Sachs is accusing the United States of acting today as an imperial power—in a long line beginning with the Romans and continuing in modern times with the British, the French, and the United States itself in previous periods, from Puerto Rico, Cuba, and the Philippines through Vietnam and increasingly in the Middle East. In fact, in all these cases, the United States took up the preceding wars of other imperial powers, including Spain, Britain, and France, thereby extending imperial adventures that have been “both futile and self-destructive.”

Sachs is led therefore to conclude,

The United States should immediately end its fighting in the Middle East and turn to UN-based diplomacy for real solutions and security. The Turks, Arabs, and Persians have lived together as organized states for around 2,500 years. The United States has meddled unsuccessfully in the region for 65 years. It’s time to let the locals sort out their problems, supported by the good offices of the United Nations, including peacekeeping and peace-building efforts. Just recently, the Arabs once again wisely and rightly reiterated their support for a two-state solution between Israelis and Palestinians if Israel withdraws from the conquered territories. This gives added reason to back diplomacy, not war.

We are at the 100th anniversary of British and French imperial rule in the Mideast. The United States has unwisely prolonged the misery and blunders. One hundred years is enough.

I can only agree.

Even more: give Sachs another decade or two and he might actually become a Marxist.

Year in review

Last year, as I reported the other day, I published over 800 new posts.

I’ve never done this before. However, I decided to look back over the year and choose one post for each month of 2016:

January—Liberal ideology

February—Who are the capitalists?

March—Yea, they’re angry!

April—Life among the liberal econ

May—Letting capitalism off the hook

June—Globalization, inequality, and imperialism

July—Trump and the Prosperity Gospel

August—The Mandibles and dystopian finance fiction

September—What about the white working-class?

October—Nobel economics—or why does capital hire labor?

November—Condition of the working-class in the United States

December—China syndrome

Enjoy!

Empire 2.0 at the World Bank

Sebastian Mallaby referred to Paul Romer’s scheme of building charter cities as Empire 2.0 (which is much the same connection I made back in 2010).

the largest obstacle Romer faces, by his own admission, still remains: he has to find countries willing to play the role of Britain in Hong Kong. Despite the good arguments that Romer makes for his vision, the responsibilities entailed in Empire 2.0 are not popular. How would a rich government contend with the shantytowns that might spring up around the borders of a charter city? Would it deport the inhabitants, and be accused of human-rights abuses? Or tolerate them and allow its oasis to be overrun with people who don’t respect its city charter? And what would the foreign trustee do if its host tried to nullify the lease? Would it defend its development experiment with an expeditionary army, as Margaret Thatcher defended the Falklands? A top official at one of Europe’s aid agencies told me, “Since we are responsible for our remaining overseas territories, I can tell you there is much grief in running these things. I would be surprised if Romer gets any takers.”

According to an announcement on his own blog, Romer is now headed to the World Bank.

There, Romer will be able to develop his imperial scheme—and, presumably, as I described his work last year, eliminate political “mathiness” and steer the focus of attention to “nonrival ideas” and away from capital and the real problems of growth within capitalist economies.

Globalization, inequality, and imperialism

source

Globalization—or, more accurately, capitalist globalization—is currently being contested on both sides of the Atlantic. The Brexit vote represents many things but surely one of them is, as I tried to explain the day after the vote, a fundamental challenge to the profound inequalities that have characterized the United Kingdom within neoliberal Europe. And, in the United States, the campaigns of both Bernie Sanders and Donald Trump (each, of course, in their different ways) have called attention to the grotesque levels of inequality and the plight of those who have been losing out in recent decades during the most recent period of capitalist globalization.

In fact, just yesterday, Sanders renewed his criticism of the current configuration of the global economy:

Let’s be clear. The global economy is not working for the majority of people in our country and the world. This is an economic model developed by the economic elite to benefit the economic elite. We need real change.

But we do not need change based on the demagogy, bigotry and anti-immigrant sentiment that punctuated so much of the Leave campaign’s rhetoric — and is central to Donald J. Trump’s message.

We need a president who will vigorously support international cooperation that brings the people of the world closer together, reduces hypernationalism and decreases the possibility of war. We also need a president who respects the democratic rights of the people, and who will fight for an economy that protects the interests of working people, not just Wall Street, the drug companies and other powerful special interests.

We need to fundamentally reject our “free trade” policies and move to fair trade. Americans should not have to compete against workers in low-wage countries who earn pennies an hour. We must defeat the Trans-Pacific Partnership. We must help poor countries develop sustainable economic models.

Sanders’s critique is buttressed by the conclusion of the latest report from the Economic Policy Institute, that the gaps between the richest and poorest families have grown in every state in the country since the late 1970s, as well as Oxfam’s analysis of growing inequality across the globe, summarized in the fact that the richest 1 percent have now accumulated more wealth than the rest of the world put together.

The case against the unequalizing dynamic of capitalist globalization couldn’t be clearer.

Yet, many (Noah Smith is just the most recent example) have attempted to argue exactly the opposite: that globalization is a positive force based on the fact that the global distribution of income has in recent decades become more equal.

The argument in favor of globalization is based on data from Branko Milanovic, illustrated in the so-called “elephant graph” (on the right-hand side of the chart at the top of this post), according to which most of the world’s population (except the very poorest and the working-classes within rich countries) has been gaining.*

Smith takes Milanovic’s findings to represent a fundamental challenge to “some of the bedrock ideas of both the left and the right.” And, as usual, he gets a little bit right and a lot wrong.

On one hand, the fact that, on a global scale, both the world’s poorest people and the working-classes within rich countries have experienced little if any increase in their real incomes represents a fundamental challenge to the views—of both mainstream economists and neoliberal economic and political elites—that capitalist globalization benefits everyone. It doesn’t, and never has.

But, on the other hand, Smith is simply wrong to claim that the elephant-like changes in the global distribution of income invalidate left-wing claims that the global capitalist game is rigged. It is, and always has been.

What commentators like Smith miss is that global capitalism has changed over its history. At one time (especially in the nineteenth century), it meant industrialization in the global north and deindustrialization in the mostly noncapitalist global south (which were, in turn, transformed into providers of raw materials, which became cheap commodity inputs into northern capitalist production). Later, especially after decolonization (following World War II), we saw the beginnings of capitalist development in the south (under the aegis of the state, with a set of policies we often refer to as import-substitution industrialization), which involved a reindustrialization of the south (producing consumer goods that were previously imported) and a change in the kinds of industry prevalent in the north (which both exported consumer goods to the rest of the world, which after the first Great Depression and world war were once again growing, and often provided inputs into the production of consumer goods elsewhere). Later (especially from the 1980s onward), with the accumulation of capital in India, China, Brazil, and elsewhere, noncapitalist economies were disrupted and millions of peasants and rural workers (and their children) were forced to have the freedom to sell their ability to work in urban factories and offices. As a result, their monetary incomes rose (which is not to say their conditions of life necessarily improved), which is reflected in the growing elephant-body of the global distribution of income.

Does that mean global capitalism is not rigged? Of course not. It continues, as before, to be rigged both within and across countries. The top 1 percent across the globe continues to find itself in the position of capturing the surplus created by the world’s workers, does as they did when capitalist globalization began (because, we often forget, capitalism has been global from the very beginning). The only changes that have taken place are (a) the number of workers who are involved in producing that surplus (which has dramatically increased, especially in the global south), (b) the geographical location of the members of the 1 percent (many more now in India, China, Brazil, and elsewhere), and (c) the way the surplus is captured (either directly, from the production of capitalist commodities within the north and south, or indirectly, especially in the north, through finance, insurance, and other services).

Which brings us, finally, to the issue of imperialism (which, contra Smith, was never just about rich countries gaining at the expense of poor ones). The argument I made back in 2000 is that, while “‘formal empires’ no longer (or, better, hardly) exist—precisely because the thinkers and movements of anti-imperialism and national liberation (from Mariátegui and Gandhi to Fanon and Che, from Peru and India to Cuba and Vietnam) were successful, because imperialism was opposed both by broad alliances of subaltern, colonized peoples and by equally broad alliances within the imperial nations themselves”—what we’ve seen in recent decades is a new kind of imperialism, an attempt not to take over individual nations but to transform the world as a whole, “a project to recolonize the entire world, to remake it, with the zeal of a humanizing mission precisely reminiscent of the ‘Civilization, Christianity, and Commerce’ that, according to the legendary David Livingstone, was the basis of the European colonization of Africa.”

This encourages me, at least, to borrow from Gilles Deleuze and Félix Guattari and to think of imperialism as a machine—as against either a particular stage of capitalism (Lenin’s preference) or merely a political option (the choice of Lenin’s nemesis, Kautsky). Precisely the choices that are repeated today. In contrast, the machinelike quality of imperialism gives a sense of the ways in which it has various parts that (often but not always) work together, a set of energies, available identities and categories, that propels individuals and groups, institutions and structures, to enact designs and to civilize those who attempt to resist its apparent lessons, to make them succumb to the naturalized logic. Not a stage of capitalism but rather a machine that energizes and is energized by capitalism at various points in its history. Not an option, a political choice available to ruling governments and regimes, although it does include various options: military bombardment or invasion, economic carrots and sticks, cultural hegemony and worldwide news reach. . .

. . .And the knowledges produced by economists, especially (but not only) in the United States.

Today, the effects of the complex and changing assemblage of the capitalism and imperialism machines (and the mainstream economic knowledges that have supported them) are being contested by the discontents of capitalist globalization, the growing numbers of citizens on both sides of the Atlantic who have been treated as so much detritus in the opening up of global markets for their corporate employers and financial oligarchs.

The results of this contestation are, of course, messy but the message is clear: we need to imagine and create a new kind of global economy, one that benefits the majority of people both within and across countries.

 

*There’s nothing inconsistent between the Oxfam and Milanovic results: Oxfam is focusing on the global distribution of wealth, while Milanovic reports on the global distribution of income. Both, however, tell us something important about contemporary trends in global inequality—that, at one and the same time, the world’s top 1 percent has increased its accumulation of wealth (such that it now owns more than everyone else combined, most of whom have very little wealth), precisely because of its own soaring incomes, even as the world’s “middle-class” has seen its real income rise in recent decades.

Sidney W. Mintz RIP

 

Sidney W. Mintz, a renowned cultural anthropologist who focused on the Caribbean rural proletariat and linked Britain’s insatiable sweet tooth with slavery, capitalism, and imperialism, died on Sunday at the age of 93.

The son of a restaurateur and an amateur chef himself, Professor Mintz was best known beyond the academy and his own kitchen for his Marxian perspective on the growing demand for sugar in Britain, beginning in the 17th century.

In his view, that hunger shaped empires, spawned industrial-like plantations in the Caribbean and South America that presaged capitalism and globalization, enslaved and decimated indigenous populations, and engendered navies to protect trade while providing a sweetener to the wealthy and a cheap source of energy to industrial workers.

“There was no conspiracy at work to wreck the nutrition of the British working class, to turn them into addicts or ruin their teeth,” Professor Mintz wrote in “Sweetness and Power.” “But the ever-rising consumption of sugar was an artifact of interclass struggles for profit — struggles that eventuated in a world market solution for drug food, as industrial capitalism cut its protectionist losses and expanded a mass market to satisfy proletarian consumers once regarded as sinful or indolent.”

He added, “No wonder the rich and powerful liked it so much, and no wonder the poor learned to love it.”

For me, Mintz’s work was important for many different reasons: the importance of history in making sense of food, economic and social relations, and commodity exchange; a conception of capitalism as a global system; and a focus on capitalist and noncapitalist class structures and class struggles in both the North and the South. Perhaps most important, he turned traditional economic determinism on its head by arguing that the consumption of sugar, tea, and other commodities and their social importance in eighteenth-century Great Britain shaped British colonial policy and the production of those commodities throughout the empire.

Mintz’s work was also an important inspiration for one of my recent courses, Commodities: The Making of Market Society.

Imperialism, the highest stage of neoclassical economics

Gary Becker’s recent death has provoked widespread praise (for example, from Peter Lewin through Justin Wolfers to Amita Etzioni) for his role in initially creating and then extending “economics imperialism.”

The basic idea (as presented on Wikipedia, by Edward P. Lazear [pdf], and in this interview with Becker himself) is that economics imperialism refers to an “economic analysis of seemingly non-economic aspects of life,” such as crime, law, the family, racial discrimination, tastes, religion, and war.*

Actually, that’s wrong. Economics imperialism is not the economic analysis of supposedly noneconomic behaviors and institutions; it’s the extension of neoclassical economics to those domains. Economics imperialism is, in this sense, the highest stage of neoclassical economics.

There are lots of different ways of making sense of the economic dimensions of our individual and social lives. What Becker and his followers set out to do was to analyze various aspects of individual decisionmaking and social institutions through the lens of neoclassical theory. This has meant reducing those decisions and institutions to individual, rational, self-interested calculations of costs and benefits, under conditions of scarcity, such as to arrive at efficient, equilibrium solutions.

The imperialist extension of neoclassical theory to supposedly noneconomic phenomena was predicated on the formation of a neoclassical monopoly within the discipline of economics. Once that monopoly over teaching, research, publications, and funding was achieved within the traditional domain of the discipline in the postwar period, it became possible to branch out and colonize the rest of the space of social theory. (I should note that the monopoly of neoclassical theory within the discipline was never complete, and has been contested throughout the postwar period.) That’s what economics imperialism was all about: to attempt to create a theoretical monopoly across the social sciences by exporting the methods of neoclassical economics to other domains. This is what made it different from the previous period, when it was the conclusions of neoclassical economics that were exported to other disciplines; now, it was the method that was being exported.

The result, of course, was not to unify social theory across the disciplines but to create new divisions within the disciplines. It’s no longer a battle between, say, economists and sociologists but, instead, between neoclassical economists and sociologists, on one hand, and non-neoclassical economists and sociologists, on the other. Much the same is true in political science, anthropology, psychology, and so on. And it’s not just a battle over the use of some of the key concepts and tools closely identified with neoclassical economics (such as mathematical modeling, rational choice, equilibrium, and so on) but over the actual entry points of social analysis. Because, in the end, that’s what Becker’s neoclassical analysis privileges: the reduction of the social space to the decisions and actions of individual subjects.

The real challenge to economics imperialism—inside and outside the discipline of economics—is, as Louis Althusser put it, the idea of a process without a subject.

 

*What I didn’t remember, or perhaps never knew, is that Becker understood his work to be a critique of and an alternative to Marxism (or at least what he took to be Marxism). It’s right there at the beginning of his Nobel lecture [pdf] and the interview with Religion and Liberty:

R&L: You are sometimes called an “economic imperialist.” What is meant by this?

Becker: That refers to my belief that economic analysis can be applied to many problems in social life, not just those conventionally called “economic.” The theme of my Nobel lecture, based on my life’s work, is that the horizons of economics need to be expanded. Economists can talk not only about the demand for cars, but also about matters such as the family, discrimination, and religion, and about prejudice, guilt, and love. Yet these areas have traditionally received little attention in economics. In that sense, it’s true: I am an economic imperialist. I believe good techniques have a wide application. Adam Smith and many others believed that as well.

On the other hand, my economic imperialism doesn’t have anything to do with crude materialism or the view that material status is the sum total of a person’s value. That view has much more in common with Marxist analysis.

Stephen Resnick—author

The last time, I wrote about Stephen Resnick’s approach to teaching. Here, I want to consider his written work.

I’m not going to attempt to cover everything listed on his long curriculum vitae.  What I want to do is pick out and comment on a few pieces that, to my mind, are emblematic of his pioneering contributions to extending and reconceptualizing the Marxian critique of political economy.

Let me start with two quick observations. First, much of what Resnick wrote and published over the years, he did so with his long-time friend and comrade Richard Wolff. What I write then about Resnick’s work, especially from 1979 onward, should be understood as an appreciation of the writings of both Resnick and Wolff.

Second, there is a gap of about four years in his curriculum vitae, from 1975 to 1979, which is absolutely crucial—and admirable. That’s the period during which Resnick stopped publishing, in order to focus on two other projects: the building of the new Department of Economics at the University of Massachusetts in Amherst, and a rethinking of Marxian theory. The first project took up a great deal of time and energy, and Resnick dedicated himself to working with others (not only Wolff but also Sam Bowles, Herb Gintis, Jim Crotty, and Donald Katzner, among others) to create a department where Marxian economics would, after a long hiatus, have a home in the United States.* The second project was born out of a frustration with the received tradition of Marxian economics, and the only way to move beyond it was to sit down with the texts of that tradition, both classic and new, and to initiate a project of rethinking Marxian theory. That involved identifying the distinguishing characteristics of Marxism (what made it different not only from mainstream economics but also from other radical traditions) and then pushing it in new directions (of which more below).

But before I get to that work, I want to go back in time a bit and focus on two articles that, in my view, represent the most interesting dimensions of Resnick’s work before UMass. They are:

“A Model of an Agrarian Economy with Non-Agricultural Activities” (with Stephen Hymer), American Economic Review (September 1969): 493-506

“The State of Development Economics,” American Economic Review, Proceedings (May 1975): 317-22

In the first, Resnick and Stephen Hymer went beyond the usual neoclassical labor-leisure tradeoff model by incorporating, for an agrarian economy, a third possibility: “Z activities.” These were meant to represent a wide variety of nonagricultural nonleisure activities such as processing, manufacturing, construction, transportation, and service activities to satisfy the needs for food, clothing, shelter, entertainment, and ceremony. This allowed them to argue against the neoclassical proposition that the course of capitalist development could simply be reduced to the replacing of leisure by work. Instead, by paying attention to the “complex mosaic of agrarian life,” they could emphasize the effects of the growth of markets and increased exchange between town and country—not only with increased specialization and production (of both food and manufactured goods, at the expense of Z goods) but also the economic and social costs of the disruption of the economic and social structure of rural areas, including the immiseration of important parts of the population. My sense is, even though a certain language is largely absent, and the analytical tools they use are pretty standard neoclassical ones, Resnick and Hymer are drawing on many of the themes of a Marxian analysis of the transition from feudalism to capitalism.

Resnick put those issues up front in his 1975 critique of bourgeois development economics. He notes, at the start, the differences between the “underlying theories of value” informing neoclassical and Marxian approaches to development and identifies, in language that would be familiar to mainstream economists, the problems inherent in their method:

Simply put, the neoclassical approach is misspecified because of the omission of production relations and thus yields biased policy conclusions and unreliable predictions. Further, although this approach has recently appended to its analysis the more obvious social and political issues, they are added as unexamined external givens never seen as the direct outgrowth of the underlying structure of production, i.e., the value relation between labor and labor power. Neoclassical development cannot analyze anything outside of a framework of market or exchange relationships because that is the theory upon which it is based; it is trapped not by inadequate data or lack of “better” models, but rather by its narrow focus on supply and demand and its total neglect of those historic forces that have produced international relations of production and technology based upon an exploitive system of one class over another.

Resnick then proceeds to tell a radically different story, albeit a pretty traditional Marxian story (replete with a falling rate of profit and the exploitation of some countries by others), of the history of capitalism and imperialism in the Third World.

And that was the last time Resnick would be permitted to publish his research in a mainstream economics journal. After that—after his publicly becoming identified as a Marxist—the doors of the mainstream wing of the profession were closed to him.

Once the new department was up and running, and considerable progress had been made in the project of rethinking Marxism (with Wolff and in discussion with some of the doctoral students at UMass), Resnick published the results in three key articles:

“The Theory of Transitional Conjunctures and the Transition From Feudalism to Capitalism in Western Europe” (with Richard Wolff), Review of Radical Political Economics (Fall 1979): 3-22

“Marxist Epistemology” (with Richard Wolff), Social Text (November) 1982: 31-72**

“Classes in Marxian Theory” (with Richard Wolff), Review of Radical Political Economics (Winter 1982), 1-18**

In the theory of “Theory of Transitional Conjunctures,” Resnick and Wolff announced their new understanding of “Marxist social science” and then illustrated their approach with an intervention into the discussion of the transition from feudalism to capitalism in Western Europe. They rely heavily on the work of Louis Althusser to argue that Marx inaugurated a radical break from other social sciences—based on a different epistemology (an alternative to both rationalism and empiricism), a different methodology (based on overdetermination, and thus a rejection of all forms of essentialism, including theoretical humanism and economic determinism), and a specific definition of class (focused on the production, appropriation, and distribution of surplus labor). They then use their rethinking of Marxian theory to identify various ways Marx’s “simple sketch” of the transition from feudalism to capitalism had been interpreted by other Marxists—from Paul Sweezy-Maurice Dobb through Immanuel Wallerstein—and to produce their own interpretation of that transition. Their view is that it is necessary to focus on the contradictions between the feudal class relation (specified in terms of what they refer to as fundamental and subsumed classes) and its social conditions of existence, out of which the conditions of existence of a different class relation—that of capitalism—were produced, which in turn undermined what remained of the feudal class process.

In the Social Text article, Resnick and Wolff explain in more detail what they mean by a specifically Marxist epistemology. They explain how rethinking dialectical materialism in terms of overdetermination rules out the various essentialisms that have characterized the pendulum swings within debates in the Marxist tradition (back and forth between various forms of empiricism and rationalism, and between economic and  humanist determinisms). They then trace the effects of those debates through various key theoreticians, including Marx and Engels, Lenin, Lukács, and Althusser. Their conclusion is that Marxian theory comprises a particular way of “thinking about society, history, and the process of thinking itself: dialectically materialist, anti-essentialist, and with class as its conceptual entry and goal point.”

Then, in “Classes in Marxian Theory,” Resnick and Wolff present the concepts of class they think are central to Marxian theory—concepts that are different both from the traditional Marxist “two-class model” and from more recent efforts to update that model by considering various other classes and class fractions (e.g., peasants, the petty bourgeoisie, and the so-called professional-managerial class). Their solution takes the form of fundamental and subsumed classes, which is their way of bringing together the class analyses Marx carries out in volume 1 of Capital with those elaborated in volumes 2 and 3. In their view, Marxian class analysis is based on a double complexity: first, a difference between the production of surplus labor and its distribution; and second, the idea that individuals often occupy multiple, different class positions, both fundamental and subsumed. One of the results is that the “working class” is reconceptualized as a variable alliance of distinct classes, including both laborers who occupy both fundamental and subsumed class positions. Class struggles are similarly rethought: Resnick and Wolff shift the focus from the subject to the object of such conflicts. Thus, class struggles are redefined as collective efforts to change, either quantitatively or qualitatively, the extraction or distribution of surplus labor.

Five years later, Resnick and Wolff published two extraordinary books:

 Economics: Marxism vs. Neoclassical (Baltimore: The Johns Hopkins University Press, 1987)

 Knowledge and Class: A Marxian Critique of Political Economy (Chicago: University of Chicago Press, 1987)

The first was a product of and a testament to their commitment and skill as teachers. In it, Resnick and Wolff not only compared neoclassical and Marxian economic theories; they set forth a nondeterministic way of comparing the two theories, based on their entry points and logics, and their different consequences for analyzing economic events and institutions.***

The second has to be counted among the most significant books of twentieth-century Marxian theory. Resnick and Wolff accomplish nothing less than a wholesale rethinking of the basic concepts of the Marxian tradition, from the theory of knowledge through its methodological orientation to class analysis. They start with the basic proposition that “Marxian theory has a distinctive concept of what theory is” and then proceed to elaborate that distinctiveness in terms of both contemporary philosophy (through the work of such figures as Thomas Kuhn and Richard Rorty) and the Marxian tradition itself (from Marx and Engels through Althusser to Barry Hindess and Paul Hirst). Next, they discuss how Marxists can “construct a knowledge of an ever-changing overdetermined social totality.” During the remainder of the book, they present their rethinking of the concepts of Marxian class analysis, apply those concepts to some of the major arguments in Marx’s Capital, and produce specifically Marxian theories of capitalist enterprises and the state.

It is impossible to exaggerate the importance for contemporary Marxism of Knowledge and Class. There is simply no major topic in our understanding and use of Marxian theory today that is not affected by the theoretical self-consciousness and thorough-going antiessentialism demonstrated in Resnick and Wolff’s reinterpretation of Marxian theory.

The tremendous impact of Resnick’s written work can be seen in his own later work as well as in the articles and books published by his former students and colleagues and in the pages of the journal Rethinking Marxism. I know that I could not have made my own modest contributions to the rethinking of Marxian theory without the theoretical inspiration and comradely encouragement provided by Resnick over the years.

 

*The story of those early years at UMass has been told by Donald W. Katzner in At the Edge of Camelot: Debating Economics in Turbulent Times (New York: Oxford University Press, 2011). My review of Katzner’s book can be found here.

**These articles were reprinted in New Departures in Marxian Theory, ed. S. A. Resnick and R. D. Wolff (New York: Routledge, 2008).

***A new edition of that book, Contending Economic Theories: Neoclassical, Keynesian, and Marxian, with additional chapters on Keynesian theory and recent developments in neoclassical theory (coauthored with Yahya Madra), has been published by MIT Press.

Confessions of an economic hit woman

 

Have you read Confessions of an Economic Hit Man? My students find it to be a real eye-opener.

The latest in a long line of economic hit men—and women—is Condoleeza Rice [ht: sm]:

Khosla Ventures, a venture assistance firm that focuses on sustainability and information technology startups, today announced a strategic relationship with RiceHadleyGates LLC. Former Secretary of State Condoleezza Rice and her business partners will bring global and domestic insight to Khosla’s portfolio companies, helping them achieve their strategic goals in industries such as technology, energy, security and healthcare.

“RiceHadleyGates shares Khosla Ventures’ vision and passion for helping the next generation of entrepreneurs change the world for the better,” said Condoleezza Rice. “We look forward to putting our network and experience to good use by helping the Khosla companies navigate the tricky waters of political, policy, and regulatory issues around the world.”

In addition to Rice, RiceHadleyGates’ other principals include former National Security Advisor Stephen Hadley, former Secretary of Defense Robert Gates, and former State Department official Anja Manuel. They will provide strategic and political context to help Khosla’s portfolio companies make critical business decisions around expanding to markets like China, India and Brazil.

OK, not quite a confession. Rather, just an announcement of business as usual. . .

“Will the New David Livingstone Please Stand Up?”

 

I hadn’t seen this, from 2000, until it was posted yesterday. . .

Videos of the other two talks in the same plenary session, by David Harvey and Gayatri Chakravorty Spivak, are available here.