The governance of capitalism

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By ELEUTÉRIO FS PRADO*

There is something perverse about the fantasies of economists

The science of economics was born under the name of Political Economy; was so named by classical economists. However, in the last quarter of the XNUMXth century, neoclassical economists changed its name to Economics simply in order to point out that it had laws that politics had to respect. If the classical economists unashamedly understood this science as a social, historical and political science, the XNUMXth century innovators, now haunted by the class struggles that were developing in society, began to face it as a positive science or as a mathematical, transhistorical science, similar to classical mechanics.

Recently Franco Beraldi, showing a lack of appreciation for the discourse of economists, categorically stated that economics is not science – but a religion, a cult of an earthly god, albeit a very metaphysical one. He advanced, in this sense, that economists should not be considered scientists, but only priests of a sect that prays for the fetish “market” and that abandoned its Enlightenment origins some time ago to embark on the path of a barely apparent, largely mystifying scientificity.

What happened, then, to this “science” over the last few centuries? In an attempt to understand its misfortune, its history from the last quarter of the XNUMXth century to the present is resumed here. Behold, little by little, it left safe ground to rise on the wings of fantasies, which are machines that aim to transform dissatisfied enjoyment of the calamitous state of the world into the pleasure provided by mathematical idealizations.

Adam Smith was concerned with explaining the wealth of nations; for him, its source was work, the division of labor, the increase in the productivity of labor provided by improvements in ways of working and by new technologies of production. And he shows that he would like to see this growing wealth also reach workers in general: “it is the great multiplication of the productions of all the different crafts – multiplication resulting from the division of labor – that generates, in a well-managed society, that universal wealth that extends to the lowest strata of the people”.

David Ricardo, who wrote at the beginning of the XNUMXth century, does not seem to have been concerned with the poverty that abounds in society. As is well known, he sought to determine the laws that regulate the distribution of income between social classes – between workers, capitalists and landowners, but his concern concerned the long-term gains of capitalists. For, he thought that “the tendency of profits… was to decrease”. He feared, therefore, that the coming of the steady state would eliminate all motivation for investment: "nobody accumulates except for the purpose of making accumulation productive." Profit, as Marx later said without adding anything on this point, is the sting of capitalist production.

John Stuart Mill, in the middle of the XNUMXth century, hailed the possible arrival of the steady state as the advent of civilization, of overcoming a primitive stage in which the carriage of the English society of his time was still rolling. Like the current ecologists, he already condemned the insatiability of the rational economic man who is, as we know, a figuration of the support of the capital relation.

“I confess” – he said – “that I am not delighted with the ideal of life defended by those who think that the normal state of human beings is that of always struggling to progress from the economic point of view, who think that trampling it and stepping on others , that elbowing… is the most desirable fate of the human species”.

In the last third of the XNUMXth century, Alfred Marshall appears and, with him and others, neoclassical theory emerges. Economics (sic!) has an advantage – he says – in relation to the other fields of social science because “it gives the opportunity to apply more precise methods”. For, in this field, human motives can be measured and expressed in money and the human being can be understood as a machine which can be described with Lagrange multipliers.

However, he also takes pains, apart from the appendices in which he pours out the mathematics, in unraveling sentimentality about the barbaric conditions in which the workers live: “those called the scum of our great cities have little opportunity for friendship; they know nothing of decorum and peace; and very little even of the unity of family life; religion does not reach them”. In any case, this author still found reason to complain about the “little attention given by Economics to the superior well-being of man”!

The advent of socialism in Russia, the great crisis of 1929 and the depression of the 1930s after World War I, the rise of fascism in Europe, produced a realistic economist: John Maynard Keynes: “the main defects of the economic society in which we live” – he said in his General Theory – “are its inability to provide full employment and its arbitrary and unequal distribution of wealth and income”.

His diagnosis of the disease of the economic system was that it was sluggish due to a tendency for the rich to oversave. Thus, he reached the conclusion that “measures to redistribute income in the sense of increasing the propensity to consume can be very favorable to the growth of capital”. He consoled himself in the face of a world in crisis by assuming that the rate of profit would fall in the long run and that, then, the “euthanasia of the cumulative power of capitalist oppression in exploiting the scarcity value of capital” would occur.

After World War II, the scientific – and even moderately critical – spirit that had driven classical political economy, and which had already faded in the last third of the XNUMXth century, died completely. Economic theory then adopts the Walrasian method as its tool and main foundation. It thus becomes just an instrument of governance of capitalism, that is, a theoretical automation that aims to repair and maintain the automatisms of the economic system, thus automating social existence itself whenever possible.

León Walras, still at the end of the XNUMXth century, promoted a radical break with classical political economy: if the latter thought of the economic system as self-organization, as a process that contains a certain anarchy and laws of turbulent motion, this French economist will conceive it as a system of general equilibrium. In this way, he plunges headlong into the metaphysics of pure ideas, is inspired by “Platonic philosophy” and builds an imaginary representation of the real existing economy. “It is a truth clarified a long time ago by Platonic philosophy” – he states – “that science does not study bodies, but the [ideal] facts of which bodies are the theater”.

Anguish in the face of a world that generates crises and booms, wild struggles for survival, embarrassing poverty and scandalous wealth, led the professional engineer – but also a dreamy socialist – to the repression of reality and to theoretical fantasy. He founded, then, the pure political economy that, according to him, “is a science in everything similar to the physical-mathematical sciences”. This theory is very similar to mechanics; it employs "the mathematical method [which] is not the experimental method, but the rational method."

Walras, however, surely did not imagine that his methodological twist would be used some eighty years later to support nothing more than pseudo-representative models, theorizations that aim exclusively to promote the governance of capitalism. The method adopted by him, while repressing the anarchy of the system, allows economists to become “very, very competent” social engineers.

How do these models work in economists' practice? They create an image of an ideal economic system that would function optimally were it not for the still existing imperfections of institutions and individuals. Furthermore, they educate in the sense that it is necessary to think with notions such as growth, perfect competition, optimization, efficiency, etc. As a result of the created fantasy, as Berardi notes, they tend to “consider that social reality is out of order when it no longer corresponds to such criteria”.

All their actions then turn to reforming the system in a way that is more favorable to capitalists and their investments under the constant lie that previous reforms were not enough. Moreover, as they have now become beings imbued with neoliberal rationality, they have also become unrepentant defenders that working people must transform themselves into human capital, into companies of their own.

Now, today capitalism is no longer synonymous with progress and a better future for many – even if not for all: the secular fall in the rate of profit did not produce a steady state in which civilization began to prosper, but generated a system in which stagnation process that grows by means of small bumps and that spreads more and more the state of barbarism. As a result, economists have become defenders of continuous obscene reforms, always insufficient, which implicitly aim to reduce real wages (direct and indirect), that is, to worsen the living conditions of workers, in an attempt to recover the rate of profit.

That's why Franco Berardi writes: “But economists are not wise. They shouldn't even be considered scientists. In denouncing the bad behavior of society, in demanding that we repent of our debts, in attributing the threat of inflation and misery to our sins, in idolizing the dogmas of growth and competition, economists resemble priests much more. From a diabolical cult, one might add, from a cult that will lead humanity to suffocation, to extinction

* Eleutério FS Prado is a full and senior professor at the Department of Economics at FEA/USP. Author, among other books, of Value excess: critique of post-big industry (Shaman).

 

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