Posts Tagged ‘political economy’

In this post, I continue the draft of sections of my forthcoming book, “Marxian Economics: An Introduction.” The first five posts (herehereherehere, and here) will serve as the basis for Chapter 1, Marxian Economics Today. The next six (hereherehereherehere, and here) are for Chapter 2, Marxian Economics Versus Mainstream Economics. This post (following on four previous ones, here, here, here, and here) is for Chapter 3, Toward a Critique of Political Economy.

The necessary disclosure: these are merely drafts of sections of the book, some rougher or more preliminary than others. I expect them all to be extensively revised and rewritten when I prepare the final book manuscript.

Finally, because of a contractual commitment (which limits the amount of the draft of the book I am allowed to publish on this blog), this will be the last book-related post for a few months.

Toward Marx’s Critique of Political Economy

There is no necessary trajectory to Marx’s writings, no reason his earlier writings had to lead to or culminate in Capital. However, as we look back from the vantage point of his critique of political economy, we can see the ways his thinking changed and how the elements of that critique emerged.

In this section, we take a quick look at some of Marx’s key texts prior to writing Capital: the Economic and Philosophic Manuscripts of 1844, the Theses on Feuerbach, the German Ideology, the Grundrisse, and A Contribution to the Critique of Political Economy. Together, they will give us a sense of how Marx’s ideas developed over time.

We will also see two themes emerge over the course of these texts: the role of critique and a focus on social context. First, Marx doesn’t start (in these texts or, for that matter, in Capital) with a given approach or set of first principles. Instead, his method is to engage with ideas and problems that were “out there,” in the intellectual and social worlds he inhabited, and to formulate a critique, thereby giving rise to new ways of posing issues and answering questions. Second, Marx’s concern is always with social and historical specificity, as against looking for or finding what others would consider to be given and universal. Thus, for example, Marx eschews any notion of a transhistorical or transcultural “human nature.” Instead, in his view, different human natures are both the condition and consequence of particular social and historical circumstances. Much the same holds for his method of engaging economic issues.

Once Marx left Germany and found his way to Paris, he met Engels for the first time (thus initiating, following on their previous correspondence, a life-long collaboration) and also began what he considered to be a “conscientious critical study of political economy,” the mainstream economics of his day. The result was a series of three manuscripts (often referred to as the Economic and Philosophic Manuscripts of 1844 or the Paris Manuscripts, which were written between April and August 1844 but only finally published, to considerable interest, in 1932).* What readers will find in the manuscripts is, having “proceeded from the premises of political economy” (meaning “its language and laws,” the assumption of “private property, the separation of labor, capital and land, and of wages, profit of capital and rent of land,” and so on), Marx arrives at conclusions and formulates new terms that run directly counter to those of Smith, Ricardo, and the other classical political economists. In particular, Marx argues that, under capitalism, as workers become reduced to commodities, what they produce confronts them as “something alien.” Therefore, their labor (using terms borrowed from Feuerbach’s critique of Hegel) becomes “alienated” or “estranged.”

it is clear that the more the worker spends himself, the more powerful becomes the alien world of objects which he creates over and against himself, the poorer he himself – his inner world – becomes, the less belongs to him as his own. It is the same in religion. The more man puts into God, the less he retains in himself. The worker puts his life into the object; but now his life no longer belongs to him but to the object. Hence, the greater this activity, the more the worker lacks objects. Whatever the product of his labor is, he is not.

He then demonstrates that the taken-for-granted assumptions of classical political economy—private property, wages, and so on—are themselves the products of estranged labor. Thus, the distinctions made by the mainstream economists of Marx’s time—between profit and rent, between both and wages, and so on—are rooted not in the nature of things, but in particular social and historical circumstances. They are, in other words, peculiar to capitalism.**

As we saw in a previous section, Marx then (in 1845) developed a critique of Feuerbach. Over the course of his eleven short theses, Marx rejects the idea of a single anthropology (the “essence of man” or human nature) and focuses, instead, on the ensemble of “social relations,” the “historical process,” and “social humanity.” The result is social practice, that is, the goal of not just interpreting the world, but of changing it.

The next year, Marx coauthored with Engels a long set of manuscripts (like the 1844 manuscripts, only published in 1932) in which they challenge the one-sided criticisms of Hegel by Bruno Bauer, other Young Hegelians, and the post-Hegelian philosopher Max Stirner. There, in their attack on German philosophy for having been obsessed with religion (and therefore self-consciousness or the realm of ideas), Marx and Engels announce for the first time what they call the “materialist conception of history,” with an alternative starting-point: “real individuals, their activity and the material conditions under which they live, both those which they find already existing and those produced by their activity.” This focus on social production means Marx and Engels can transform consciousness itself into a “social product,” which develops historically and changes according to particular forms of society or social relationships.***

Later, once Marx had settled in London, he spent much of his time in the British Museum (a national public museum, which contained both natural history objects and a massive library) studying the texts of the classical political economists. The result were a set of notebooks, called the Grundrisse (literally outlines or plans), which are often considered to be first draft of Capital.**** While the topics Marx covered are wide-ranging, from value and labor to precapitalist forms of economic and social organization and the preconditions for communism, what is of interest here is his announcement of where he thinks the critique of political economy should start: with “socially determined individual production.”

Why is this important? Because it represents Marx’s break from the notion of natural production, and therefore from the mainstream economics of his day (as of our own). In classical political economy (as in neoclassical economics), capitalism and other economies are considered to be natural, because they are finally reduced to and can be explained by certain given or exogenous factors, such as population, technology, and resources (to which neoclassical economists add given preferences). Also, they take individuals as their point of departure (the most famous example being Robinson Crusoe, a story that is repeated even today in mainstream economic textbooks).

Marx’s alternative view is that economics should start with social individuals, “individuals producing in society,” not given individuals outside of particular historical and social contexts. Moreover, the focus should be on “social production”—different, socially determined ways of producing goods and services—not on any kind of production in general (which students today will recognize in the technical apparatus of isocost and isoquant curves).

Marx also demonstrates his debt to Hegel, in discussing the relationship among production, distribution, exchange, and consumption. Where the classical political economists posit that the goal of production is consumption, and many of the critics worry about distribution, Marx sees them in terms of a “dialectical unity.” In its most general form,

A definite production thus determines a definite consumption, distribution and exchange as well as definite relations between these different moments. Admittedly, however, in its one-sided form, production is itself determined by the other moments.

It’s a distinction that shows up today in the debate about distribution (through free markets) versusu redistribution (through government programs). What the participants in that debate forget about is the initial distribution related to production (and all that entails for consumption, distribution, and exchange), that is, society produces itself through its initial distribution. It’s that initial distribution that is taken as given in mainstream economics, then as now.

Marx also announces his break from existing ways of carrying out economic analysis, whether starting from abstract first principles (and deducing the rules that govern reality) or from empirical reality (whereby certain “laws” are extracted). Instead, he argues, the method he proposes is a movement from the abstract to the concrete. In other words, economic analysis is itself a process of production—one that starts from relatively abstract notions and, adding more and more determinations or circumstances, arrives at a relatively concrete notion (“the way in which thought appropriates the concrete, [which] reproduces it as the concrete in the mind”). It is not a question of bridging the gap between thought and reality (in terms of some kind of validity criterion) but of producing within thought a particular conception of economic and social reality. The implication, of course, is that different economic theories will lead to different, incommensurable conceptions of capitalism and other economic systems.

Finally, in 1859, Marx published A Contribution to the Critique of Political Economy. There, he designates his break from the philosophies of both Hegel and Feuerbach with what has become one of his most famous expressions:

It is not the consciousness of men that determines their existence, but their social existence that determines their consciousness.

This is Marx’s critique of both Hegel’s notion of the Absolute Spirit and of Feuerbach’s alienated consciousness. It’s not an issue of individual consciousness or virtue within existing social order but the conflict-ridden social order itself. Another way of putting this in terms of contemporary debates is: you can’t just have a semblance of freedom (which often means blaming the victims) but you need real freedom, that is, economic and social change that makes the exercise of freedom possible. It’s the same idea that has motivated many working-class political movements, from the nineteenth century onwards, which have demanded an end to poverty and access to decent housing, healthcare, and so on for the majority of people by identifying and seeking to eliminate the economic obstacles to what they consider to be fundamental human rights.

Marx then appends a quotation from Dante Alighieri’s Divine Comedy, which can also serve as a warning to readers as we embark, starting in the next chapter, on a detailed study of Marx’s critique of political economy:

Qui si convien lasciare ogni sospetto
Ogni vilta convien che qui sia morta
.*****

———

*The Economic and Philosophic Manuscripts of 1844 was first published in Germany by the Institute of Marxism-Leninism in Moscow in 1932, in the language of the original. In English, this work first appeared in 1959, published by the Foreign Languages Publishing House in Moscow, translated by Martin Milligan.

**Marx also presents in those manuscripts his critique of “piecemeal social reformers,” including the French socialist Pierre-Joseph Proudhon, “who either want to raise wages and in this way to improve the situation of the working class, or regard equality of wages,” for not going far enough, because they accept the existence of private property and estranged labor. In this sense, they want to improve, but not eliminate and move beyond, capitalism. And, in the third manuscript, Marx credits Hegel with understanding the importance of labor as the source of alienation; but then criticizes Hegelian philosophy for focusing entirely on “abstractly mental labor” (as a question only of “self-consciousness”) and therefore overlooks (just like the classical political economists) economic and political alienation.

***They also announce what, at least at this stage, what they mean by “communism”: “not a state of affairs which is to be established, an ideal to which reality [will] have to adjust itself. We call communism the real movement which abolishes the present state of things. The conditions of this movement result from the premises now in existence.”

****The seven notebooks were written during the winter of 1857–58 but were only published in 1939. The first English-language translation (by Martin Nicolaus) appeared in 1973. The publication of the Grundrisse was important not only for readers of Capital (and much discussion has ensued about the overlaps and differences between the two), but also for other fields, especially for the new field of cultural studies (in the work of, among others, Stuart Hall and the famous Center for Contemporary Cultural Studies at the University of Birmingham).

*****The lines are from Canto III of “Inferno” (as Virgil’s reply to Dante, who has just read the inscription over the Gates of Hell). The translation is: “Here one must leave behind all hesitation; here every cowardice must meet its death.”

DFR-Sydney

I am pleased to announce that an article, “Utopia and the Critique of Political Economy,” based on my 2016 Wheelright Lecture, will soon be published in the Journal of Australian Political Economy.

Here is a link to the pdf of the pre-publication draft of that article.

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I want to congratulate Adam Morton and the folks in the Department of Political Economy at the University of Sydney for the success of their Progress in Political Economy blog.

And I’m flattered that the post on my “Utopia and the Critique of Political Economy” lecture is included in the Top 10 for 2016.

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Another event, Class Acts in Political Economy with my friend Kath Gibson, in Australia—to go with my lectures at the University of Sydney and the University of Wollongong.

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It’s more than 50 years after the March on Washington for Jobs and Freedom and we’re still having a hard time thinking through the relationship between race and class in the United States, as we have seen in the recent tensions between Black Lives Matter and the Bernie Sanders campaign.

For the organizers of the 1963 march, issues of race and class were inextricably connected. That’s why the coalition that sponsored the march focused on both civil rights and the creation of jobs through public works, on eliminating segregation and raising the minimum wage, on making sure that whites and blacks were able to march together. They weren’t “class reductionists.” They were attempting to forge a movement that could eliminate both racial disparities and economic exploitation.

Touré F. Reed [ht: db] delves back into that history in order to demonstrate that, while liberals have always had a difficult time in focusing on the nexus between racism and class, the United States has a long history of thinking through and organizing around both issues.

Many contemporary activists, broadly defined, are quick to dismiss as racist deflection any attempts to view racial disparities through the lens of class inequality, but in the 1930s and 1940s mainstream African-American civil rights leaders — among them Lester Granger of the National Urban League, Walter White of the NAACP, John P. Davis of the National Negro Congress, and of course A. Philip Randolph of the Brotherhood of Sleeping Car Porters (BSCP) — frequently argued that precisely because most blacks were working class, racial equality could only be achieved through a combination of anti-discrimination policies and social-democratic economic policies.

But by the 1950s, the anticommunism of the Cold War had a chilling effect on class-oriented civil rights politics, setting the stage for analyses of racism that divorced prejudice from economic exploitation — the fundamental reason for slavery and Jim Crow. Indeed, this was the era in which racism was recast as a psychological affliction rather than a product of political economy.

As McCarthyism receded by the end of the 1950s, however, mainstream black civil rights leaders once again identified economic opportunity for all — decent-paying jobs and social-democratic policies — as essential to racial equality.

The black organizers of the 1963 March on Washington for Jobs and Freedom (it is telling that “Jobs and Freedom” are no longer part of collective reflections of the march), Randolph and Bayard Rustin — both of them socialists — were very clear about this.

Which brings us up to the issue of Ferguson and other instances of police brutality today.

In separating the problem of police brutality from political economy, many activists — like, ironically, the liberal as opposed to left approach to racial inequality — not only undercut the opportunity for broader political alliances and perhaps some meaningful victories, but sidestep the same crucial point about police brutality that both liberals and conservatives look past. . .

If one views the excesses and failures of the criminal justice system solely through the lens of race, then victims of police brutality and prosecutorial misconduct tend to be black or Latino. However, if one understands race and class are inextricably linked, then the victims of police brutality are not simply black or Latino (and Latinos outnumber blacks in federal prisons at this point) but they tend to belong to groups that lack political, economic, and social influence and power.

From that vantage point, the worldview expressed by Johnson and others misses the mark and falls into the same trap that, ironically, liberals have offered a stratum of credentialed black Americans for decades: opportunity within a market-driven political and economic framework that disparages demands for social and economic justice for all (including most black people) as socialist, communist, un-American, or even class-reductionist.

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Back in August, James Surowiecki observed that the lack of an Ebola treatment was disturbing but predictable—because it’s simply not profitable for corporations in the pharmaceutical industry.

When pharmaceutical companies are deciding where to direct their R. & D. money, they naturally assess the potential market for a drug candidate. That means that they have an incentive to target diseases that affect wealthier people (above all, people in the developed world), who can afford to pay a lot. They have an incentive to make drugs that many people will take. And they have an incentive to make drugs that people will take regularly for a long time—drugs like statins.

This system does a reasonable job of getting Westerners the drugs they want (albeit often at high prices). But it also leads to enormous underinvestment in certain kinds of diseases and certain categories of drugs. Diseases that mostly affect poor people in poor countries aren’t a research priority, because it’s unlikely that those markets will ever provide a decent return. So diseases like malaria and tuberculosis, which together kill two million people a year, have received less attention from pharmaceutical companies than high cholesterol. Then, there’s what the World Health Organization calls “neglected tropical diseases,” such as Chagas disease and dengue; they affect more than a billion people and kill as many as half a million a year. One study found that of the more than fifteen hundred drugs that came to market between 1975 and 2004 just ten were targeted at these maladies. And when a disease’s victims are both poor and not very numerous that’s a double whammy.

Unfortunately, the best solution Surowiecki could offer was to reward companies for creating substantial public-health benefits by offering prizes for new drugs.

Leigh Phillips offers much the same kind of analysis of the unwillingness of the pharmaceutical industry to invest in research to produce the necessary treatments and vaccines for unprofitable diseases. In an interview with Amy Goodman [ht: dw], he adds an additional dimension:

I think we need to look at the political and economic circumstances, particularly around this particular disease both in the United States and Western countries in terms of the funding for research, where that’s coming from, and in terms of austerity in Europe, but also austerity in West Africa, as well. There’s sort of two prongs to this. The first, of course, was that, you know, over the last few months we’ve seen over and over again people from the CDC, senior figures from the WHO, even John Ashton, the head of the U.K. Faculty of Health, who have said, basically, that the knowledge is there, the know-how is there—we have five candidate vaccines, there’s a number of other different treatments that, you know, are well in hand—but there just hasn’t been any buy-in from the major pharmaceutical companies. John Ashton, as I was saying, from the U.K. Faculty of Health, you know, sort of the doctor-in-chief, if you will, in the U.K., described this as “the moral bankruptcy of capitalism.” It sounds, you know, quite vituperative there, quite explosive language, but it really expresses the anger that a lot of the researchers feel about how, look, we know what to do here, but this is just an unprofitable disease.

As a result, Phillips offers a much more comprehensive solution:

Over these past few months, the worst Ebola outbreak in history has exposed the moral bankruptcy of our pharmaceutical development model. The fight for public health care in the United States and the allied fight against healthcare privatization elsewhere in the West has only ever been half the battle. The goal of such campaigns can only truly be met when a new campaign is mounted: to rebuild the international pharmaceutical industry as a public sector service as well as address wider neoliberal policies that indirectly undermine public health.

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Once again, this coming fall, I’ll be teaching Karl Polanyi’s The Great Transformation in my Topics in Political Economy course.

It’s a course based entirely on books (plus a few political economy films, starting with Charlie Chaplin’s Modern Times). I teach four classic texts of political economy, starting with Adam Smith’s Wealth of Nations and then moving on to different responses to Smith’s theory of capitalism: by Karl Marx (volume 1 of Capital), Thorstein Veblen (The Theory of the Leisure Class), and finally Polanyi.

I match each classic text with a contemporary one: for example, Deirdre McCloskey’s Bourgeois Virtues with Smith, Stephen Resnick and Richard Wolff’s Knowledge and Class with Marx, and Joseph Stiglitz’s The Price of Inequality with Veblen. Next time, I’m planning to teach Thomas Piketty’s Capital in the Twenty-First Century as the follow-up to Polanyi.

The discussion, of course, gets pretty complicated—since, during the semester, the students learn that the various authors are not only responding to Smith (whose text, they also figure out, has been poorly rendered in their other economics classes), but also to each other. Polanyi with Marx, for example. And changes in the world are making those intellectual exchanges even more interesting, as Robert Kuttner understands:

Looking backward from 1944 to the 18th century, Polanyi saw the catastrophe of the interwar period, the Great Depression, fascism, and World War II as the logical culmination of laissez-faire taken to an extreme. “The origins of the cataclysm,” he wrote, “lay in the Utopian endeavor of economic liberalism to set up a self-regulating market system.” Others, such as John Maynard Keynes, had linked the policy mistakes of the interwar period to fascism and a second war. No one had connected the dots all the way back to the industrial revolution.

The more famous critic of capitalism is of course Karl Marx, who predicted its collapse from internal contradictions. But a century after Marx wrote, at the apex of the post–World War II boom in both Europe and the United States, a contented bourgeoisie was huge and growing. The proletariat enjoyed steady income gains. The political energy of aroused workers that Marx had imagined as revolutionary instead went to support progressive parliamentary parties that built a welfare state, to housebreak but not supplant capitalism. Nations that celebrated Marx, meanwhile, were economic failures that repressed their working classes.

Half a century later, the world looks more Marxian. The middle class is beleaguered. A global reserve army of the unemployed batters wages and marginalizes labor’s political power. Even elite professions are becoming proletarianized. Ideologically, the view that markets are good and states are bad is close to hegemonic. With finance still supreme despite the 2008 collapse, it is no longer risible to use “capital” as a collective noun. The two leading treasury secretaries during the run-up to the 2008 financial crash, Democrat Robert Rubin and Republican Henry Paulson, were both former CEOs of Goldman Sachs. If the state is not quite the executive committee of the ruling class, it is doing a pretty fair imitation.

Adbusters_77_EconomicsOfHappiness

My colleague Benjamin Radcliff, author of the Political Economy of Human Happiness, argues happier people live in countries with strong social safety nets and labor unions.

The relationship could not be stronger or clearer: However much it may pain conservatives to hear it, the “nanny state,” as they disparagingly call it, works. Across the Western world, the quality of human life increases as the size of the state increases. It turns out that having a “nanny” makes life better for people. This is borne out by the U.N. 2013 “World Happiness Report,” which found Denmark, Norway, Switzerland, the Netherlands and Sweden the top five happiest nations.

Conservatives may be equally troubled to learn that labor unions have a similar effect. Not only are workers who belong to unions happier, but the overall rate of happiness for everyone — members and nonmembers — increases dramatically as the percentage of workers who belong to unions grows, reflecting the louder political voice that organization gives to ordinary citizens.

Take it a step further and we can conclude that people will be able to have richer and more rewarding lives when the social surplus is used to support the welfare of the majority of the population and when workers have a democratic say in how that surplus is produced.

The United States will truly deserve the distinction of being exceptional when it rejects the austerity agenda that continues to be peddled as the solution to our current economic and social problems and embraces a more generous future.

Slavoj Žižek explores what the idea of political economy means in terms of understanding the current crises:

One thing is clear: after decades of the welfare state, when cutbacks were relatively limited and came with the promise that things would soon return to normal, we are now entering a period in which a kind of economic state of emergency is becoming permanent, turning into a constant, a way of life. It brings with it the threat of far more savage austerity measures, cuts in benefits, diminishing health and education services and more precarious employment. The left faces the difficult task of emphasising that we are dealing with political economy – that there is nothing “natural” in such a crisis, that the existing global economic system relies on a series of political decisions. Simultaneously it is fully aware that, insofar as we remain within the capitalist system, the violation of its rules effectively causes economic breakdown, since the system obeys a pseudo-natural logic of its own.

The obvious question then is, what can be done politically?

Today, the ruling ideology endeavours to make us accept the “impossibility” of radical change, of abolishing capitalism, of a democracy not reduced to a corrupt parliamentary game, in order to render invisible the antagonism that cuts across capitalist societies. This is why Lacan’s formula for overcoming an ideological impossibility is not “everything is possible”, but “the impossible happens”. . .

Ours is thus the very opposite of the classical early 20th-century situation, in which the left knew what had to be done but had to wait patiently for the proper moment of execution. Today we do not know what we have to do, but we have to act now because the consequence of non-action could be disastrous. We will be forced to live “as if we were free”.

It’s the political economy, stupid!

To judge by the pundits, the incessant buzzing of the vuvuzelas is the biggest problem of this World Cup. (It’s annoying, I’ll admit, but not a major problem.) Others, inside and outside South Africa, have been raising much more important questions about the political economy of the World Cup since construction began.

Patrick Bond has prepared an informative slide show, published by Amandla! and an article, published by CounterPunch, in which he suggests the red cards that should be shown to the organizers for:

  • dubious priorities and overspending
  • Fifa super-profits and political corruption
  • heightened foreign debt and imports amidst generalized economic hardships
  • the breaking of numerous trickle-down promises
  • the suspension of democratic freedoms
  • repression of rising protest

That’s the trick, isn’t it? To love the beautiful game and, at the same time, to understand the conditions and consequences of its being staged. . .