| Abstract: |
This paper was presented to the May 2013 conference of the Postglobalization
Initiative in Moscow, and deals with the function of economics in the modern
world order. It seeks to explain why, as a profession (notwithstanding
individual exceptions) economics failed to predict the crisis that opened in
2007; why it then failed to foresee its length and depth; and why it proposes
no solutions that could bring it to an end. The paper challenges economics’
most fundamental claim, that it conducts itself as a science, arguing that it
instead behaves as a religious system for making and justifying political
decisions whose core belief is market perfection: the notion that the
combination of private property in production with universal commodification
is not only optimal, but cannot fail. The paper proposes a radical new
conception of the ethical duty of economists as resisting untruth, which it
can do by conducting itself as a pluralist science. To this end, the paper
introduces a distinction between two functions of knowledge: its exoteric
function through which society arranges to control nature, and its esoteric
function which organises, within a rational structure, systems of law, ethics,
morality, and their relations to each other. In science, the exoteric
predominates over the esoteric. In religion, the reverse is the case. This
explains the real function of economics, which is a disguised normative system
rooted in the primary principle of market perfection. Its prescriptions are
derived not by the normal scientific method of testing a variety of theories
against the evidence, but by the elevation of this supposition into an
unchallengeable dogma. It operates as a monotheoretic body of knowledge in
which, at any given time and facing any given problem, only one unique answer
is offered, denying the users of economics the basic democratic and scientific
right to choose between a variety of answers on the basis of their own
independent assessment of both the evidence and the presuppositions of the
theories from which the prospective answers are deduced. The primary mechanism
of its religious function lie therefore in its methods of theoretical
selection: it permits the promulgation and indeed, development, only of those
theories which yield predictions consistent with the dogma of market
perfection. It is constructed to suppress any body of theory which leads to
conclusions inconsistent with the assumption of market perfection, most
notably those, such as the theories of Marx and Keynes, which demonstrate that
the market system is self-contradictory – that is to say, that it acts so as
to undermine the basis for its own existence. The more likely it is that a
given theory may lead to such conclusions, the more thoroughly it is
suppressed. In consequence, those theories that escape the suppressive net of
economics are precisely those in which the present social order is presented
as not merely optimal but natural, inevitable and eternal. Interference with
this market then becomes a crime against nature. All private benefits of the
property-owners become the result of natural forces: they are rich because
nature intended them to be. Take their riches from them, and things can only
get worse. Poverty, destitution, famine: these are sad but inevitable
consequences of nature. Any policy designed to offset or overcome them is
misguided. Nature, in a word, has been enthroned as a God, by excluding humans
from Nature. I employ the term market serfdom to characterise such a system,
because it removes choice from the field. Human agency is itself designated a
crime against nature. Hayek and his followers, the paper, have erred in making
an issue of the claim that ‘serfdom’ comes from interfering with the market:
Actually they propose that they only course open to humanity is to submit to
the market. His is the freedom of the slave who accepts his destiny. We have
no choice but what the market ordains. Economics, as we now know it, is the
theoretically perfected manifestation of this doctrine, just as late mediaeval
Catholicism was the perfected manifestation of the doctrine of submission to
the established aristocratic and monarchic order. The paper then analyzes the
two principal mechanisms by which the profession of economics has arrived at
this point: selection for conformity and institutional delegitimation, and
briefly outlines how ‘assertive pluralism’ could, if applied systematically,
restore the study of political economy to the status of a science. Slides, and
a video of the presentation and discussion, will be made available through the
link to this paper at https://londonmet.academia.edu/AlanFreem
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| Keywords: |
Value, Price, Money, Labour, Marx, MELT, Okishio, TSSI, temporalism, rate of profit |