Beyond the critique of political economy



Economics presents itself as a science when it no longer is, it has become just a preaching of unspeakable interests.

As is known, the critique of Political Economy consists of a combined objective of the dialectical presentation of the automatic subject in the work of Karl Marx The capital, the systemic despot who governs the functioning of the capitalist mode of production and conditions both the institutions and the behavior of individuals in bourgeois society.

This criticism, as we also know, stems from a difference that was indicated by Marx himself in a footnote to the first chapter of this monumental book: classical political economy distinguishes itself because it “investigates the internal nexus of bourgeois production conditions”, while that vulgar economics aims only at “the apparent nexus (…) offering a plausible understanding of the phenomena”. It is also known that vulgar economics was consecrated as such in the last decades of the XNUMXth century, as this knowledge came to be considered as a positive science par excellence.

Marxian criticism, therefore, consists, on the one hand, in showing the apparent veracity or even falsity of the formulations of vulgar economics and, on the other hand, in rectifying classical theories, eliminating their confusions, but especially correctly linking the form and the content, appearance and essence of capitalist production relations. A central element of this criticism, as is currently accepted without dispute, is to show how all this scientificity, vulgar or not, falls into the fetishism of merchandise, money and capital itself. There is no doubt, moreover, that this model of criticism remains important in the XNUMXst century, even if it can be considered that it has become insufficient.

The reason why it became necessary to go beyond the critique of political economy stems from the need to make a critique of technocratic economics, which did not yet exist as such in Marx's time. Behold, the first was gradually replaced, from the last quarter of the XNUMXth century, by a scientificity that makes use of the resources of differential calculus to create a knowledge that is increasingly appropriate to the governance of capitalism.

Thus, it began to be called simply Economics on the grounds that it was constituted from then on as a positive, highly rigorous knowledge, supposedly exempt from normative guidelines. However, the suppression of the qualification of political knowledge takes place only in appearance. The concealment of its character of knowledge from the interest of the classes and the State only favored the development of a technocratic knowledge – which ended up imposing itself, but not at the end of the XNUMXth century and the beginning of the XNUMXth century. In fact, it acquired this character only later.

Disregarding the fruitful past of this science, Stanley Jevons, for example, declared that, “if economics is to be a science at all, it must be a mathematical science”. Alfred Marshall, who also used calculus in the construction of the nascent neoclassical economy, relegating, however, formalizations to appendices, considered that “the role of systematic scientific reasoning in the production of knowledge is similar to that of the machine in the production of goods” . León Walras considered that the theory of exchange value had to be inspired by classical mechanics with the aim of building “a science similar in every way to the physical-mathematical sciences”.

All these authors used mathematics with the main objective of formulating a theory of economic decisions, of purchase and sale of goods in particular, knowledge based on the role of marginal increments in the maximization of utility or profits. Only afterwards, however, did the theoretical structure constructed in this way become instrumental knowledge aimed at economic policy. In any case, the economic man, already in the texts of these authors, came to be thought of as a perfect computational machine, automatons that ideally personified the human being who became a support in the concrete plots of the capital relationship. That man ultimately boils down to an optimization calculation.

One thing is certain, the mathematization of political economy sought from the beginning to benefit from the prestige of the natural sciences, which were able to employ exact methods in the domain of knowledge of nature, a precondition for this domain to also become effective and extensive in industry. The performative effect of this transformation was evident from the beginning.

Economics can thus aspire to become similar to the “physical-mathematical” sciences, even if its lack of conceptual rigor has been camouflaged behind this formal accuracy. The reduction of the utilities of different goods, which are incommensurable in principle, to an abstract measure of utility is, for example, a logical operation that has never been clarified. However, a huge and pretentious theoretical edifice was built and thrown over this theoretical abyss. Like the cats in the cartoon, it rises and hovers in the void only because it doesn't allow you to look down inside it.

From the beginning, its future as technocratic knowledge aimed at the governance of private and state organizations under capitalism was inscribed in the mathematization of Economics. For, the mathematical logic employed in the formulation of economic theory from then on will be the logic of the algorithm, of the automation of procedures, of the transformation of the human into a machine. And it is evidently consistent with the pursuit of efficiency and effectiveness, apparently dedicated to raising social well-being, but which is actually focused mainly on capital accumulation. And this, because it is governed by a principle of infinite development, has as its counterpart the inexorable exhaustion of human and non-human nature.

It should be noted that governance is usually understood as the way in which power is exercised in the management of the social and economic resources of a company, a State apparatus and the economic system as a whole. Now, the purpose of governance invariably consists in the automation of procedures in general, in the automation of human behavior and, thus, of social existence itself.

Well, it consists of the management of organizations in general in favor of capital accumulation. Governance, in principle, therefore, works to produce suffering and not pleasure, a bad life and not a good life, even though the system it regulates can compensate for part of the frustrated and permanently dissatisfied subjects that it creates through compulsive and wild consumerism.

Contemporary Economics presents itself as a positive science, that is, as a knowledge that seeks knowledge about the apparent functioning of the economic system. And in this sense, it seems to fit perfectly with the notion of vulgar economy created by Marx in the XNUMXth century. However, this hides its true character of normative knowledge, or rather, technical-normative knowledge that works in the central and dominant interest of reproducing the structures of capitalism.

Consequently, she does not apply neutral knowledge to an object that is indifferent to her. On the contrary, it always works with two objectives: first, to educate the relevant actors in the university, in the government and in the private sector so that they start to act, mechanically if possible, in accordance with the supposed needs of reproduction of the system; second, to institute regulatory norms that establish the conditions within which this system operates.

However, as is well known, the workings of capitalism are not neutral either. In the first place, because they always privilege the ruling classes to the detriment of the dominated classes, which, however, can be more or less protected from the exploitative insatiability of capital – to the benefit, in general, of capital itself. Furthermore, even within these large social compositions, they can favor certain fractions, whether from the dominant classes or even from the subordinate classes. That is why economic knowledge is inexorably crossed by interests; Economists are always zealous employees of these interests even if they peremptorily deny it in order to obtain legitimacy for the knowledge they profess.

Even the methodological precept that supposedly scientific knowledge should guide and govern utilitarian and technocratic practice is often violated by Economics. Behold, it is even more true in this field that theories are constructed – adapted, molded – with the primary purpose of supporting certain practices previously judged adequate to meet certain interests. And this is allowed by the nature of the models employed in Economics.

As its assumptions are, in general, highly unrealistic, they can be suitably arranged at the whim of the technocratic formulator, to obtain certain results. And these, evidently, come at the behest of certain particular interests, which are often expressed in the form of money. That is why authors like Franco Berardi accuse Economics of presenting itself as a science, when it no longer was, to become a preaching of unspeakable interests.

And here it is necessary to give an example. The growth of public debts in advanced capitalist countries in recent decades has become a matter of concern for the financial interests that, as we know, dominate in contemporary capitalism. Then the economists of the mainstream, Robert Barro, for example, tried to formulate a “serious” theorization to show that public deficits did not stimulate the expansion of the economic system. And which, therefore, should be avoided so as not to jeopardize the course of economic growth, whose strength supposedly comes from the private sector.

They gave this “theory” a nice name: “Ricardian equivalence theorem” and presented it by means of highly sophisticated mathematical models, which are not accessible to the understanding of people in general and even of economists who do not want to waste time with the scholasticism of mathematical economics. According to this “theorem”, fiscal deficits, even when financed by the growth of the public debt – and not, therefore, by tax increases – would be compensated quickly by the reduction of private sector expenses. Thus, what one puts in, the other more dynamic one takes away, in such a way that the final effect can be quite disastrous. It is then on the basis of this type of “theory” that economists mainstream tend to frighten politicians with the imperious demand that they opt for fiscal and monetary austerity.

Now, this supposedly positive proposition is not supported by any historical data from capitalist economies in general. Macroeconomic statistics simply show that it is not true [1]. However, the economists who formulated this conjecture were based on imaginary evidence: according to them, private sector agents form rational expectations about government behavior: if today the public sector finances itself by raising its deficit, tomorrow it will raise taxes to balance your budget; therefore, the only rational behavior of the private sector is to contract its expenditure immediately. They assume, therefore, that private agents learned this lesson not from practical experience, evidently, but from the “treaties” that these highly competent economists wrote with the hope of winning an (ig)nobel prize in Economics.

Faced with this situation, for the one who writes here, it is not possible to have a democratic coexistence with economists who opted for technocratic economics. Note that they, due to the fragility of their positions, tend to behave extremely arrogantly. On the contrary, it is necessary to criticize them in order to restrain themselves in their teaching and governance practices, which ultimately undermine democracy and even the well-being of the majority of the population, as well as probably the future of civilization.

* Eleutério FS Prado and phead and senior professor at the Department of Economics at USP. Author, among other books, of Complexity and praxis (Pleiad).



[1] See Podkaminer, Leon. “Prelude to a critique of the Ricardian Equivalence Doctrine”. In: Real-world Economics Review, no. 93, 2020.

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