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Class struggle and hired prize-fighters. A Marx-inspired perspective on the present state of economic theory and its social causes
Fabio Petri

Last modified: 2018-06-21

Abstract


This paper is on how useful Marx’s class-conflict perspective is to understanding the limited impact of the 2008 crisis on economic science. I will argue that his Postface to the second edition of Das Kapital gives us a clue to the social conditionings on economic discourse, that fits very well with the subsequent evolution of economic theory and suggests the answer to the above query. In that Postface, Marx views the social situation after Ricardo’s death—with the victory of the bourgeoisie in Western Europe and the first workers’ organized struggles—as leaving room in economic discussion almost only for “hired prize-fighters”, admitting at most the ‘shallow syncretism’ of a John Stuart Mill. The implicit message is that when the ruling class is strong it will bend economic discourse to a justification of the status quo, admitting limited modifications in favour of the lower classes only when these are indispensable owing to political pressure from below or to other needs of capitalism. In this perspective, the Great Crisis of the 1930s and the fear of communism explain the success of Keynesian economics, the creation of the welfare state in Europe, and the general advocacy of full employment policies after WW2. Toward the end of the 1960s the students’ protests and workers’ politicization, with the French May ’68 as a high point, explain the entrance into academia of a number of radical economists. The difficulties with controlling wage labour that explain the end of the Golden Age after 1973 also explain the victory of monetarism and New Classical Macroeconomics. The paper argues that purely scientific reasons do not suffice to explain this latter development. One might have expected an analogous big change in the dominant discourse in economics after the 2008 crisis: but it does not look like it, and the paper asks why. Scientific reasons for the continuing domination of DSGE macro models are even more difficult to find than for the victory of monetarism, given the incredible disarray of the claimed ‘microfoundation’ of these models, the modern theory of general equilibrium. What seems to be missing is the element of danger for the ruling class: in other words, the fear of left-wing movements. For space reasons the paper only suggests hints on the causes of this fact. It then asks what explains this capacity of the political situation to influence economic discourse, and suggests some mechanisms.


Keywords


hpolitical pressures on economic theory; economic theory after 2008; Marx

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