the political origins of neoclassical economics:
What agent/force has the power to make these economic theories and policies impotent and outmoded? What is it in capitalist society that wreaks havoc amidst theoreticians and managers, precipitates an intellectual crisis and leads to the formulation and adoption of new theories? Inasmuch as capitalist society is a social relationship amongst classes, the answer must lie in the agency of either the capitalist or the working class or buried deep in the arcane inner logic of the system. To an autonomist marxist (12), the answer to this question is quite clear -- it is an aggressive and recalcitrant working class and its self-activity that ruptures the normal operations of capitalist society and propels it towards crisis. Hence, the development of economic theory, since the dawn of capitalism, must be read as a process by which new policies and theories designed to govern and justify capitalist society replace those which have been rendered passe in the dynamic of class struggle.
(...) the focus of the proposed dissertation is an investigation of the articulation and adoption of the neoclassical framework. The working hypothesis is the proposition that this paradigm shift was an ideological and practical innovation crafted by bourgeois theoreticians as a response to working class insurgency.
(...) textbooks in economics at the introductory, intermediate and graduate levels generally present neoclassical economics as the only body of theory that is worthy of scholarly attention. Further, these texts take great pains to paint neoclassical economics as ideologically neutral and scientific. To a large extent, these texts are targeting a captive audience of students who do not have much influence in the choice of required textbooks. However, in recent years, students have been successful in compelling universities to offer courses of study in heterodox economics thereby challenging the hegemony of the neoclassical paradigm. A study of the political origins of neoclassical economics will expose the historical obscurantism of the textbooks and refute the claims contained therein. By doing so, the proposed dissertation will provide ammunition for those students and teachers who are actively attacking and undermining the authority of the above mentioned textbooks.
(...) One of the earliest of such critics was John Hobson. In discussing the "wide acceptance" won by Œmarginalism" in academic circles, Hobson opines that: "Its [marginalism's] expositors are able to deduce from it practical precepts very acceptable to those politicians and business men who wish to show the injustice, the damage and the final futility of all attempts of the labouring classes, by the organised pressure of trade unionism or by politics, to get higher wages or other expensive improvements of the conditions of their employment.... If our political economists can bring this gospel of marginalism home to the hearts and heads of the working- classes, they will set aside all their foolish attempt to get higher wages out of rent and property and will set themselves to producing by harder, more skillful and more careful labour an enlarged product, the whole or part of which may come to them by the inevitable operation of the economic law of equal distribution at the margin!"(37)
(...) Further, Hobson argues that the primary use of the new doctrine is "that it serves to dispose of the charge against capitalists of exploiting labour."(38) He proceeds to state that the "immanent conservatism" of the theory, recommends it, not only to timid academic minds, but to the general body of the possessing classes who, though they may be quite incapable of following its subtleties of reasoning, have sufficient intelligence to value its general conclusions as popularised by the press.(39)
(...) Ronald Meek, another marxist, attributes "the increasing popularity of the new type of analysis" to two factors. Firstly, he claims that "the basic problem of "scarcity" with which it [the new theory] was designed to deal actually began to emerge to prominence in the real world."46 Secondly, he claims that the new theory "was found to be particularly useful in connection with the task of opposing the labour theory of value - a task which became more and more urgent as marxist ideas began to grow in popularity."(47)
(...) Similar charges are echoed by many other marxists and radicals including Guy Routh and E. K. Hunt. In addition to reiterating the second point made by Meek, Routh points out the gradual process by which the old theories were "exorcised" in "favour of something that would be as unlike Marx's doctrine as unlike could be." (48) He also furnishes a considerable amount of ammunition, to critics of bourgeois theory, by providing numerous examples of the anti-working class prejudices of Jevons, Walras and Menger.(49) E. K. Hunt also supplies similar ammunition.(50) Furthermore, Hunt argues that: "With the growth of the corporation as the principal form of industrialization and the growing industrial concentration.....there was an important change in both the nature of the accumulation of industrial capital and the role of the industrial capitalist.....Increasingly, corporate managers were hired to direct and oversee industrial enterprises.....[and] profits and interest came to be a result of passive ownership."(51)
(...) Marx , in attempting to correct the fetishism inherent to the first chapter of Capital, observed that "commodities cannot themselves go to market" and that "we must, therefore, have recourse to their guardians."(57) A similar strategy becomes necessary if we are to explain how economic theories gain currency. After all, the mere enunciation of a theory does not inexorably lead to its adoption. In this context, it is my contention that the appropriate focus of study ought to be Alfred Marshall and his neoclassical synthesis and not the marginal utility theorists per se. For, it was Alfred Marshall who presided over the shift in paradigm and it was his synthesis that ultimately took root as a new orthodoxy.
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