Date: Tue, 22 Oct 1996 11:12:55 +0930
Subject: Re: HoPE article


Having written a very passable overview of imperialism and a good
commentary on *Capital*, it is a bit disconcerting to see someone as well
informed as Anthony Brewer declare that Marx is passe. He is, of course,
giving the nod to Samuelson's appraisal, although Samuelson was probably
trying to be provocative. His assumption is that price theory is pretty
much all that an "economist" should be renowned for. He claims that Marx's
value theory is inconsistent and totally worthless.  He thus gives a nod to
Steedman's appraisal. Steedman, however, intends only to say that Marx's
value theory is worthless in order to retrieve the message of a "great
theorist" on the structure and dynamics of a capitalist economy.

Brewer addresses Marx on crisis theory but notes that Marx's views are
fragmentary. He notes Marx's schemes of reproduction but does not consider
that the influence on Leontiev et al is significant. You could do pretty
much the same sort of job on Adam Smith, of course. Adam Smith's price
theory is inconsistent, fragmentary and outmoded (Of course, Smith can
claim some originality for his sketches of "cost plus profit and rent",
embodied labour and labour commanded price theories which Marx cannot, but
Marx can claim some originality for his distinction between labour and
labour power and his fragments of endogenous crisis theory, however
supercede they may now be).

My feeling is that Brewer represents the kind of explanation for the
passing over of Marx which he claims is unnecessary. No objective observer
can doubt the overwhelmingly ideological character of mainstream economics.
One of Brewer's critics, M.C. Howard makes the point that given certain
assumptions, all of Marx's conclusions can be proven rigorously.
(Basically, the assumption of equal organic compositions of capital). These
assumptions are restrictive but so are the assumptions on which
neoclassical propositions depend. Marx's assumptions tell a parable -
capitalism is analogous to feudalism and slavery - and neoclassical
assumptions tell another parable - the free and competitive exchange of
commodities allows the social co-ordination of private activities and gains
>from trade. Despite this equivalence, mainstream economists somehow think
their models are more realistic than Marx's. But are variations in organic
compositions of capital any more essential to the workings of markets than
departures from perfect competition?

It is utterly amazing how many "economists" trained in neoclassical theory
go around making pronouncements which depend on taking the neoclassical
model as an accurate account of how markets work rather than as an accurate
account of but one factor taken in isolation. They assume that because the
neoclassical model tells us this, that or the other, we are supposed to
make our economies more like that model, regardless of demonstrations that
the model is not robust. (ie its properties do not necessarily hold in
approximations). Surely this is ideology at its best? (I am excluding the
leading lights of mainstream economics from this. Stiglitz, for example,
knows that the neoclassical model is just that.)

 Brewer's announcement that he has returned to the fold is appropriate to a
growing free market totalitarianism in advanced capitalist societies. He
tells us in effect that Marx should be shut up and that Marxist economists
should be denied academic arenas and standing (Surely redundant?). The
products of our contemporary free market totalitarianism will no doubt be
every bit as edifying as the products of the hey day of  Soviet
totalitarianism.




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