ORIENTATION
Why do political science and neoclassical economics go in one ear and out the other?
A human being who has a fully integrated social body understands that economics is about a social system of circulation of goods and services. In other words, provisioning for the population. Politics is the collective process of evaluating and deciding a) where have we been (our past) and b) where are we going (the future). Politics is about steering. With this framework, it would be inconceivable to steer or govern without referring to how well the economic system is working. How can you steer without an evaluation of how goods and services are circulating? So too, how can you monitor the economic provisioning process without checking on the decision-making process of the steering of our social direction? In fact, a person with an integrated social body only makes a distinction between economic and political processes for analytical purposes. It would be better to call the whole endeavor “political economy”.
However, if you received an undergraduate college degree you probably never had a class in political economy. What you probably had is at least one class in political science and another class in economics. If you are like most people, you found these classes either boring or incomprehensible. Why? The answer is because both fields are riddled with capitalist propaganda that has little basis in most people’s experience. Sure, there are some people who are convinced that political science and neoclassical economics make sense but which social class is this? Chances are it is members of the upper middle class for whom political and neoclassical economics make sense from their class position. But upper middle-class people are 10% of the Yankee population. Even if we take half of the 30% of the middle class, it is still only a quarter of the population. (I exclude the ruling class and the upper class for whom these courses are not relevant for different reasons).
For the rest of the middle class and lower classes, these courses are likely to produce apathy. There is a reason why Yankee masses hate politics and why they pay no attention to economics. For the elites who control political science and neoclassical economics fields, mass apathy is fine because they don’t want the lower classes asking political and economic questions. Mass apathy doesn’t mean they haven’t internalized the propaganda of political science and/or neoclassical economics. It just means some of these assumptions and images exist in the unconscious of people. For example, most people will say, if asked, “we live in a democracy”. So too they will say economically “there are no free lunches”, right out of neoclassical economics guru Milton Friedman’s playbook.
In the meantime, the social body has now slowly been taken over by two zombies: a political science zombie and a neoclassical economics zombie. This zombification process undergoes at least five processes:
- Political science and economics are cut off from history, anthropology and sociology.
- Political science and economics are separated from each other. In a political science class, if you ask an economic question about politics you will be told that is “not their department”. If you ask a political question in an economics class you will be told the same thing.
- Political science and economics classes become reified because both disciplines are presented as changeless and not subject to scandals, false turns or ideological manipulation. Both fields appear as things, dogmas, idols. In the case of the Constitution or the Declaration of Independence, these documents have become dogma. George Washington or Thomas Jefferson have become idols that are uncriticizable.
- Both fields focus on very small micro processes that are relatively inconsequential for the average person’s life. In both fields, this is done because smaller processes lend themselves more easily to scientific measurement. In addition, most neoclassical economics theories are presented in mathematical form which is intimidating for working class and even some middle-class people because they do not have formal training.
- Scientific method is emphasized over the content in the field. Unless you have some reason for going into each field professionally, knowledge of how they do science is not really relevant. In the case of Trump, if you want to know how someone with no political experience or training could become the president of Yankeedom, you won’t find the answers in your political science or civics courses.
The result is that any zombified Yankee college graduate is filled with self-congratulatory political science propaganda about the nature of democracy as well as self-congratulatory neo-classical economics which is filled with economics propaganda about the wonders of capitalism.
For this article I will draw on the books Tragedy of Political Science by David Ricci and Disenchanted Realists by Raymond Seidelman and Edward Harpham. For the economics section, I’ve drawn on Introduction to Political Economy by Sackrey, Schneider and Knoedler as well as E. K. Hunt’s History of Economic Thought and Polanyi’s The Great Transformation.
FROM INTERDISCIPLINARY TO SPECIALIZATION OF POLITICS AND ECONOMICS
In the beginning of both the study of politics and the study of economics each was understood as being inseparable from history, philosophy, sociology and anthropology. So, in the case of politics, we could never understand a form of rule without understanding the economic property relations through which rulers, and ruled interacted. Nor could we make sense of the rise and fall of dynasties without understanding the social class composition of the society. Lastly, how could we know how the current ruler differs from rulers decades or even centuries ago without including history.
In the case of economics, the interdisciplinary field that preceded it was called political economy. In the work of Smith, Ricardo and Marx, no economic transactions could be understood without understanding the machinations of political rulers or how the newly formed industrial capitalist society differed from the agricultural, slave capitalism that preceded it. This way of looking at things began to change in the last three decades of the 19th century with the marginal utility theorists Menger, Marshall and Walras, who gradually isolated economics from these other fields. This isolation continued into the 20th century with the Austrian school economics in the work of Eugen Ritter Böhm-Bawerk, Von Mises and Von Hayek just before World War II.
In the United States during the depression the work of Keynes was carried on as a political economy point of view because Keynes was interested in macroeconomics and he insisted the state needed to intervene to keep capitalism from going off the rails. The work of neo-classical economists Samuelson and then Milton Friedman in the 1950s and 1960s emphasized the independence of the market from all political influences.
ZOMBIE NUMBER ONE: POLITICAL SCIENCE PROPAGANDA FOR DEMOCRACY
How the political ideology of liberal pluralism gets in the way of research into how democratic Yankeedom actually is
American political theory has always fancied itself a democratic politics well before the end of the 19th century. There was never a time when political theory considered that Yankee politics’ “democracy” was ever something to be proven. It was already always the case. Political science was not a neutral approach to the study of politics. It dwelt in a national context of liberal democracy. This political ideology operates with the following postulates:
- presumption of human rationality – people are capable of thinking through their situation about what their own interest requires them to do;
- the separation of religious from secular institutions (separation of church and state);
- separation of political powers into legislative, executive and judicial fields;
- the presence of more than one political party to represent factions of citizens who must have their interests checked and balanced by the upper classes (electoral college);
- all that is most profound and enduring about politics was laid down by the Founding Fathers in their documents; and,
- liberal faith in science as the midwife of social progress and enlightenment.
The infrastructure of democracy – political parties, the electoral college, the constitution, the separation of powers – could not be challenged. This is crucial because it puts a damper on the study of power blocks and the behavior of elites. To the extent that it takes inequalities seriously, it farms them out to other social science disciplines such as sociology or political sociology.
What would happen if the results of actual political scientific research continually denied central tenets of democratic ideology that political scientists in the United States believe in? Supposed research showed that American citizens do not behave much like democratic citizens? Suppose a political scientist has a hypothesis that democratic theory in practice is an illusion. Can you still practice political science if you believe democracy really doesn’t exist? Suppose a scientist insists on studying politics scientifically even though their inquiry cannot insure the health of a democratic society. Hypothetically you should be able to do this research.
What are the chances of a research grant for a hypothesis designed to show how anti-democratic American social institutions are? Of course, political scientists have done this research in these areas and received grants. But the research in political science would be easier if you proposed research that made people hopeful, comfortable or at least neutral, rather than disturbing them. As of around the year 2000 there were two political science textbooks which did not toe the line of what will later be called “political pluralism”. One was Michael Parenti’s Democracy for the Few, which is Marxist. The other is Irony of Democracy by Louis Schubert and Thomas Dye, which are from the Elitist school of political science.
But political scientists work in educational communities and are somewhat dependent on each other. They have political tendencies that are not based on political facts but on political ideologies that inform the facts whether they are conservative, liberal or Marxist. These ideologies inform whether the reception they receive from their work is cool, hostile or enthusiastic. For example, the topic of political disorder is not looked upon favorably by political scientists. It undermines their theories and cracks their time-honored assumptions. This kind of research is far from welcomed, as important a topic as it might be.
As a political scientist, do you try to use the research to change the institutions in a more democratic way or do you leave the institutions alone and rewrite democratic theory to fit the growing problems and weaknesses of its institutions? The field of political science in the United States did the latter. We will focus on how the ideology of democracy kept political scientists from critically analyzing their own institutions.
Generations of Political Science in Yankeedom
The first generation of politics in the US, from 1880-1900 grounded politics in morality and comparative history. The goal was to pass on qualitative, comparative, eternal wisdom through the ages that led to the development of character. Teachers taught many subjects in the humanities. A single teacher would be responsible for teaching rhetoric, criticism, English composition, logic, grammar, moral philosophy, natural and political law and metaphysics. Teachers were not expected to “publish or perish”, as commercial publishers would not publish books on research because they were not profitable. Scholars in other disciplines, however, judged their work. A single organization, Allied Social Science Association (ASSA) housed History, Economics and Anthropology. Teachers were both products and co-producers of breadth-full learning.
Progressive era of muckraking: Charles Beard
The period of muckraking in the Progressive Era (1896 – 1916) was more down-to-earth and left-liberal compared to the previous generation. The desire was to expose the conditions and the workings of corporate capitalism with writers like Upton Sinclair, Lincoln Steffens and Ida Turnbull. Yet they were still interdisciplinary. For example, Charles Beard famously took the Constitution apart and identified the economic property relations that underlined it. Beard’s vision of a new society included the fusion of new state powers with a revived, educated, informed and activist public.
Positivism political science
But after World War I, interest in political muckraking and activism cooled. When the American Political Science Association (APSA) was set up as a field, its connection to research was separated from history, economics or sociology. As capitalists expanded their industry, companies merged into corporations. They increasingly needed more highly trained managers to help in coordinating production, planning and supervising workers. Universities were chosen as the location to train the middle classes for work in these institutions. Some of these folks became political scientists.
Masses seem uninterested in substantive democracy
Beginning in the 1920s and 1930s, the field of politics was taken over by a positivist scientific orientation and was rechristened as “political science”. The emphasis on science meant using techniques of modern empirical research and descriptive studies. Guided by the perspective that the social sciences could be as rigorous as the natural sciences, modern political science was based not on the discovery of eternal truths, but on an ever-expanding body of quantitative research. Science was considered a university affair in which basic research was done, supposedly independent of how the research could be used.
What this new science found was that Americans did not seem to be acting very democratically at all. Many did not bother to vote and masses were susceptible to dictators. The research showed the average American does not conform to the modern liberalism of Dewey and Roosevelt. Merriam and Gosnell wrote about the non-voting public that 44% of non voters gave general indifference or inertia as reasons for not voting. Lasswell pointed out that the findings of personality show the individual is a poor judge of their own interest. In a world of irrational humans, Lasswell argued that a stable order must rely on a universal body of symbols and practices which sustain an elite. This stable order propagates itself by peaceful methods and wields a monopoly of coercion which is rarely necessary to apply, as Graham Wallas said in Human Nature in Politics.
But what if scientific investigations carefully carried out with the intent to improve society might instead contradict popular expectations and undermine faith in democracy? Were political scientists to inquire into the most efficient ways to overthrow America’s government and then publish the results? These are not the types of questions political scientists would be happy to entertain. The tragedy of political science is that in pursuing scientific facts while ignoring political values, those political values became unconscious as they crippled their ability to critically evaluate and challenge the social institutions that stood in the way of a substantive democracy.
Political science fails to explain dictatorships, communism or fascism
Liberal democracy had failed to take hold in Europe after World War I. Instead, in Mussolini’s control of Italy, dictatorships were established in Portugal, Yugoslavia, Austria, and Bulgaria. In 1931 the Japanese invaded Manchuria. In 1932 the Nazis were voted into power and in 1939 fascism triumphed in Spain – and then came World War II.
Political science provided little guidance for understanding the political processes that were shaping Germany (fascism) and Russia and China (state socialism). With regard to key questions of the day such as why fascism existed or how it was possible for peasants to overthrow governments, they provided no serious answer. Even more damning, they could not explain why the politics in their own country were becoming less democratic. The entire corpus of scientific knowledge seemed unable to provide a course for society to follow which would enlighten the population about the rudiments of democratic government. World War I, fascism, Stalinism and World War II signaled a loosening of forces that would make human progress chaotic at best, rather than automatic
In spite of all this, political science proceeded on its merry way as if nothing had happened. Old liberalism counted on the rationality of citizens and the responsiveness of government. Neither was found to be very true. These are not findings that political science wanted to hear because it strongly supported institutions and practices of liberalism. Probably the most famous political scientist of the 1920s and 1930s, Charles Merriam, still held out hope for the public. He promoted a civic education to improve the political life of the average person.
THIN DEMOCRACY
The reification of research methodology
The first thing political science did was to bury itself in research methodology and stop paying attention to voting patterns or even more seriously, the electoral process itself. It worked overtime to be accepted as a kindred spirit to the natural sciences. Its aim was to make its research methods as close to natural science as possible. This meant quantitative measurement and specialization of the field.
Liberal democracy is like scientific method
John Dewey saw science as organized intelligence. When humans work together at science, the methods they employ individually are reinforced by their interaction collectively as an ever-increasingly joint capacity. Dewey developed a system called instrumentalism to organize the findings of science. Dewey believed that discovering the truth was a dynamic process which was forever incomplete yet evolving. Likewise, Dewey thought democracy must be the scientific method applied to politics. He came to think that the method of political science as at least as important, if not more important, than criticizing and changing political institutions.
In 1945, Karl Popper’s The Open Society and Its Enemies was published. For the next decade, this was the stance that informed many polemics of the Cold War. Like Dewey, Popper saw the application of the scientific method as the road to democracy. He wanted to use the scientific method in his professional work so as to make modest proposals for reforming small parts of society one at a time – piecemeal social engineering as opposed to a “dangerous” utopian program for reframing all parts of society totally and simultaneously as in Marxism. Part of the process of distinguishing science from non-science is to make a distinction between what is true as the result of research, and what should be done with the research. The basic concepts and hypotheses of political science should contain no elaboration of political doctrine or what the state and society ought to be or do.
A product of this specialization was the loss of communication with the public. Political scientists talked to fewer and fewer people and those who listened heard more and more about less and less. Their research was guided by statistics, survey research, and later on formal modeling and game theory. These studies created jargon incomprehensible to the lay person. Instead political scientists became more concerned with how the work might interest their colleagues. As this happened political scientists lost touch with their colleagues in other disciplines and only discussed their findings with those already in their field. Associations which once housed many disciples differentiated into specialized bodies: Political science became more on the surface and lost its depth and breath. Only concrete scientific investigations could yield true knowledge and that knowledge was empirical, particular and experimentally verifiable.
Political scientists naively believed that by simply amassing more data, eventually a theoretical breakthrough would occur about how political systems changed. But while political scientists were slowly amassing reliable political knowledge about increasingly smaller political processes, in their insistence on separating fact from political commitment they left the barn door open by not providing political alternatives as a guide for social policy. Their political crisis came when Leninists and fascists did have political commitment while political science had nothing qualitatively to offer their own politicians.
Thin (Procedural) Democracy
Additionally, besides burying themselves in research method, their standards for what constituted democracy slipped badly. Instead of facing the lack of real substantive democracy in their own country they simply compared themselves favorably to “totalitarian societies” to make them seem relatively more democratic. The bad news for substantive democracy in the West was papered over by a comparison with the political life in “totalitarian” societies. As the evidence on individual and group irrationality mounted, many members of the discipline felt constrained to advocate an approach to politics designed to compensate for some of democracy’s shortcomings. This thin theory of democracy would praise existing liberal practices and institutions rather than criticize weak democratic processes such as voting and the electoral college. They needed to find new justifications for accepting the sometimes-disappointing outcome of democratic processes in the real world.
Rise of pluralism: political practice of interest groups as social science
If individuals are irrational, how did American democracy control its rulers? Empirical democratic theorists or pluralists examined the dynamics of group politics and the effect of organized interest groups on electoral competition. A plurality of groups competes with each other to constrain rulers and political parties to some extent. Pluralists claim, following Arendt, that unlike atomized individuals in totalitarian societies, in liberal democratic societies voluntary associations can and do exist for exerting pressure. William Kornhauser argued for the importance of maintaining pluralism, a bevy of competing power centers to guard against “mass society”.
Tinkering Instrumentalism as the invisible hand of politics
Why isn’t democracy the collective process by which we first establish our values, list our alternatives, prioritize the alternatives, weigh the potential consequences of each alternative and then act together to test what works? According to pluralists, this collective rational deduction process won’t work because humans cannot agree as to which values are to be pursued.
Dahl and Lindblom claim there is another way, which they call disjointed incrementalism. In Politics, Economics and Welfare, Dahl and Lindblom claim that democratic politics is incremental. Here small policy steps are taken without reference to unattainable consensus or grand objectives. Since a great many political actors from voters to interest groups to parties to bureaucrats must be consulted before anything gets done, this process will be disjointed. Yet it is a series of policy adjustments and taking small steps via calculated risks where immediate additions to old policy will not at once achieve all goals but at the same time will not unduly invite unforeseen tumultuous consequences.
Political science and the end of ideology movement
The self-congratulatory nature of political pluralism reached new heights with the “end of ideology movement.” From the late 1940’s and well into the 1960’s many leading scholars in the US agreed that Western society had progressed beyond any need for an explicit liberal ideology because liberalism had already won. The fundamental decency and social efficiency of American policy had been conclusively proven between 1930-1950. Daniel Bell (End of Ideology), Seymour Lipset, (Political Man) and Edward Shils agreed that most political parties in the West paid only lip service to ideology anyway. Secondly, there were so few social issues left that only practical tinkering rather than ideological solutions was needed. Daniel Boorstin’s book The Genius of American Politics argued that American political institutions by-passed the need for ideology. Raymond Aron, in the Opium of the Intellectuals, called for the abolition of ideological fanaticism and the advent of skeptics who will doubt all models and utopias. They rejected ideological speculation because its propositions could not be confirmed or disconfirmed. To questions about their ideological use of “the end of ideologies” in the service of the Cold War they responded that the Cold War was largely a military affair. Anti-ideologists represented the dominant American mood after WWII.
Political science pluralism excludes the working class
Seymour Lipset writes about working class authoritarianism. He points out that studies show the poorest strata of Western society were most likely to support Communist parties. Lipset believes the lower-class people simply do not fit the requirements for good citizenship. They are insufficiently pragmatic, open-minded skeptical and tolerant. Therefore, there is a social utility in the relative weakness of the lower classes. Real world democracies operate on the basis of high participation by elites with their superior political knowledge. Low participation by the masses might impair the political process with their undemocratic attitudes. Liberal political scientists had accepted apathy among citizens.
Rough road for political science in the 1960s
As most everyone knows, the 1960s were a time of explosion that neither Popper nor the pluralists predicted. As far back as the mid-1950s C. Wright Mills described a concentrated power elite which controlled society rather than the pluralist theories of a many-centered polity. The civil rights movement, the opposition to the Vietnam War, the rise of the New Left and the women’s movement all went unexplained by political science pluralism. Whether they called for reform or revolution, the politics of the 1960s were far from pluralist instrumentalism. Murray Edelman, in his book Symbolic Use of Politics, says the job of democratic procedures is to provide the public with symbolic gratification. Elections are for expressing discontent, for articulating enthusiasm, for enjoying political involvement and legitimating the democratic regime by giving it the appearance of popular support. Herbert Marcuse attacked pluralism for creating a “one-dimensional man”. John Galbraith argued that capitalism was not creating real public goods such as roads and bridges but was creating or expanding on the fleeting fancies of consumer products introduced by advertising.
Students complained that the universities were machines in the service of churning out passive consumers or beholden to military contractors. Student activists wanted universities to be agents of change, not handmaidens to the status quo. What united all these strands was a vision of politics that was participatory, not consensual. Political sciences had been focusing on conventional political processes, not the quality of the institutions themselves. They dealt with congresses, political parties, but not the content of what these institutions were doing. Students wanted more policy studies – that is, what the government chooses to do or not do. There were too few, if any, quantitative research studies found on powerful bureaucracies like the Department of Justice, the Ford Foundation or Institute for Defense Analysis. Political philosopher Sheldon Wolin advocated a for a renaissance in the vocation of political theory – to read, analyze, appreciate, extend and build upon the great political philosophers of yesterday. He called for a development of “epic theory”. Political science was not neutral. No stance is a stance for the status quo.
ZOMBIE NUMBER TWO: NEOCLASSICAL ECONOMICS
From political economy to neoclassical economics
Just as political science got cut off from its relationship to history, sociology, anthropology and moral theory by end of World War I, so too economics theory also got cut off from history, politics, anthropology and moral theory beginning around 1870. What now passes for economics, which is known in the United States as neoclassical economics, didn’t exist until the mid-20th century. Throughout the 18th-19th century there was a tradition called “political economy” which included Adam Smith, David Ricardo, Karl Marx and John Stuart Mill among others. Political economics assumed that economics could not be separated from history, politics or anthropology. It was only in the last three decades of the 19th century with the work of Jevons, Walras and Marshall – with what was called “marginal utility theory” – that economics began to be treated as if it could be separated from these other fields. The Austrian school of von Böhm-Bawerk, Von Mises and Von Hayek continued this tradition which separated the economy from the rest of social life. In the United States Paul Samuelson and Milton Friedman brought together neoclassical economics fields.
Polanyi’s Great Transformation
In his powerful book The Great Transformation, political economist Karl Polanyi argues that for most of human history there was no such thing as a separate realm called “the economy”. The economy was embedded in social relationships regarding the circulation of goods based on principles of “reciprocity” within families and kin groups. At the level of the state power of kings and aristocrats, these political relationships were regulated by what Polanyi called “redistribution”. What might be called an “economy” was limited to some trade relations between societies, not within them.
Polanyi argues that this began to change when capitalism brought into society the wheeling-and-dealing that was once limited to trade between societies. At the end of the 18th century when industrialization began to pulverize community relations based on generalized reciprocity and redistribution, the state became more centralized and reorganized society as market relations. There is no better account of this great transformation than to examine Adam Smith’s Wealth of Nations. While Adam Smith is considered the “father” of neoclassical economics, in most ways he represented a cross between political economy and neoclassical economics. In the first section below I will contrast him with those harder-line political economists like Marx. In the next section I will show how different he was from neoclassical economists.
Substantive vs formal rationality
If you ask most people what an economy is, they will tell you that it is a social process by which people work to produce goods and then the goods are circulated and consumed. But in the minds of neoclassical economists, the economy is not a society-wide social process involving the transformation of nature to meet human needs through a production and circulation process. For neoclassical economists, the economy is a micro exchange between self-interested, hedonistic individuals who compete with each other. Their decisions about what will be traded or bargained is based on short-term self-interest in which they weigh the pros and cons. Society is no more than the aggregate sum of these micro interactions.
Adam Smith vs radical political economists (Marx)
Turning to Adam Smith’s The Wealth of Nations, the first thing worth noticing is the ahistorical manner in which the origins of capitalism are presented. Smith argues that individuals “trucked and bartered” all the way back to hunting and gathering societies. Ideologically it is important to establish that some form of capitalism has always existed. For Marx and the institutionalist political economy theory, capitalism has a more recent origin in the 15th and 16th centuries. No anthropologist who studied tribal societies would try to make Smith’s case.
Secondly, Smith claims that capitalism starts when frugal, hard-working, shrewd traders identify a need to invest capital in land. In the best of all possible worlds, the product sells and he makes a profit. This capitalist has to compete with other traders and the results of this competition are better products for everyone. Smith called this “the invisible hand” of the market. Marxists and post-Keynesians contest this. Marx argued that capitalism doesn’t begin with trading. It begins with what Marx called “the primitive accumulation of capital” when peasants are thrown off the land (enclosures) and their tools and animals are taken away from him. The capitalist uses the land for commercial farming growing coffee, sugar, cotton and tobacco through the labor of slaves. Meanwhile former peasants are driven to work in cities and eventually work in factories after capitalists have revolutionized industry in the 19th century.
Smith believes that the source of profit is in the circulation process. Capitalist make profits by winning the competition, buying land cheap and selling it dear. His ingenuity and risk-taking are rewarded. For Marx, the key to understanding the source of profit is not primarily circulation process, but the production process. Marx says that the exploitation by the capitalist of the laborer comes in the form of wages paid to the worker. Marx estimated that the wages of work covered the first four hours of labor. This was enough money to reproduce working-class life. The last 4-6 hours were surplus labor that was pocketed by the capitalist. So, the ultimate source of profit was the exploitation of labor power. Smith also has a labor theory of value, but it was not the most important factor.
Adam Smith was sensitive to the cost the specialization of labor might have on the body and mind of the worker in terms of alienation on the job. Despite that, he felt that the massive productivity of volume that would result was worth that cost. In Bertell Ollman’s great book Marx’s Theory of Alienation he points out that workers are alienated from a) the process of labor; b) the products of labor; c) other people on the job while laboring; d) the tools harnessed; e) alienation from himself. Marx’s hope was that once an abundance of goods was produced the worker should work less and have a diverse set of activities, as he said, fishing in the morning, cattle rearing in the afternoon, criticism in the evening.
Human nature for Smith is pretty bleak. He believed that human beings are pleasure-seeking, rational and competitive, but lazy. Most people would prefer to do nothing and it is only by the carrot and the stick of enterprising capitalists that makes workers productive. For Marx, people are naturally collectively creative and want to cooperate. People only appear lazy when they have been performing wage labor and they are tired and miserable. When people control their conditions of labor, they are more productive than under capitalist conditions. This has been shown in evidence of worker cooperatives and workers councils during revolutions.
For Adam Smith the fruits of competitive capitalism led to lower prices for consumers. Marx said this is not what actually happens. Competition between capitalists leads to a concentration of capital in a few corporations and the elimination of smaller capitalists. As Marxists Baran and Sweezy point out, corporate capitalists agree not to engage in cut-throat competition and the prices of commodities are pretty much the same. They compete through advertising, not through the prices themselves. There are many more contrasts that could be made, but these are the most important. Let me turn now to the difference between Adam Smith and neo-classical economists like Milton Friedman. It is Milton Friedman‘s right-wing economics that is propagandized in college courses.
Adam Smith Vs Milton Friedman
Despite Smith’s departure from the more leftist political economists of Marx or Thorstein Veblen, compared to Milton Friedman, Adam Smith would have been considered a left liberal. In the first place, Adam Smith understood that the state was necessary for public works like roads, canals and harbors to provide education and defense. With rare exceptions, Milton Friedman wanted the state completely out of the market. His theory was “let the markets run everything”.
While Adam Smith was sensitive to the impact of the working conditions in factories, Milton Friedman might say that workers are free to find work elsewhere if the working conditions did not suit them. In terms of the source of profit, Adam Smith, like Marx, also included a labor theory of value. That means that the cost of a product depended at least partly on the labor time it takes to produce the product. To my knowledge, Milton Friedman ignored this.
How is wealth measured? Smith had an infrastructural answer to this. For him wealth is measured in a) the increased dexterity of every workman; b) the amount of time saved; and c) the inventions of machines that would shorten the workday for workers. Ultimately for Smith the increase in the standard of living of the poor should be the ultimate determination of social wealth. By today’s neoliberal and neoconservative light, Adam Smith would be to the left of Bernie Sanders! For Milton Friedman, he believed that maximizing the profits of capitalists would have a trickle-down effect on the poor.
Notice there is nothing in Adam Smith’s work about investment in the military or finance as sources of profit. For Adam Smith production of material, physical wealth was how profit was measured. For Milton Friedman, profit should be measured regardless of the field. This means that the profits made on a tractor and the profits made on a tank should all count as profit. This fails to make the distinction between tools which can produce food and tools which destroy land and people. So too, for Friedman, profits made on finance capital, investment in paper which produces no material wealth is the same as profits made on building roads, bridges or houses.
Adam Smith, like political economists such as Thorstein Veblen, included the creativity of farmers, artisan, scientists and engineers as creative sources for the economy. For Milton Friedman, the only fount of creative power was the ingenuity of the capitalist. Apparently, Friedman had little idea that the wealth capitalist possessed was not the result of personal ingenuity but most often from inheritance. Last time I checked about 2/3 of capitalist got their wealth from the inheritance they received.
Playing Hardball: the totalitarian nature of capitalist economics courses
In the fields of psychology, a student is presented with six different theoretical schools: psychoanalysis, behaviorism, humanistic psychology, physiological, evolutionary psychology and cognitive. In the fields of sociology, we might be presented with three founding schools – Marx, Weber and Durkheim. Second generation schools might be added: The Elitists (Mosca, Pareto, Michels), symbolic interactionists and rational choice theory. But in the field of economics, in Economics 101 classes, the student is presented with one school. That school would be the neoclassical economics of Samuelson and then later, Milton Freidman. No matter what the chapter heading, neoclassical economics has an interpretation and analysis. Keynesian theory might be presented somewhat, but only in select chapters. Surprisingly only two schools are presented. Does this mean there are only two schools? Hardly.
In their book Introduction to Political Economy, Sackrey, Schneider and Knoedler identify a number of other schools. In addition to a full presentation of Keynes, also included are the works of John Kenneth Galbreath, Thorstein Veblen, Karl Marx, along with might be called the anarchist economics of worker cooperatives. There are other schools called post Keynesians like Steve Keen and Michael Hudson. These are all first-rate economics, why are they not included?
The reason is solely for propaganda purposes. Neoclassical economics theorists are cheerleaders for what I call market fundamentalism. Other schools vary in calling for more state intervention (Keynes, Galbraith) while some are critical of finance capitalism (Keens and Hudson). Others like Marxists and anarchists are critical of the entire capitalist system. The propagandistic nature of neoclassical economics can be more blatantly seen in the fact that there is not one Marxian economist in the United States that is the head of an economics department.
Conclusion
It has often been said by people living outside of Yankeedom that the Yankee masses are stupid people. We don’t know anything about the history of other societies or where they even are on the globe. As true as this may be, what is even more disturbing is that Yankee masses do not understand our own political economy. This article was designed to show how our social bodies have been snatched away and then inhabited by two zombified entities. A political science body which is designed to persuade us that we live in a democracy despite our own best judgment. The evidence political science offers us is self-congratulatory, contradictory, irrelevant, myopic, filled with deceptive comparisons and anti-communist. The other body is a neo-classical economic entity which is also triumphant, mystifying, naïve, cynical, wooden, anti-social, shallow, obscurant and also anti-communist. Anyone in Yankeedom who manages to recover their social body must go through a process of de-zombification. What does this recovery look like? We must analyze the world through a political economy which is interdisciplinary, which is always undergoing quantitative and quantitative changes and through which we can collectively imagine and then build a new socialist world.
• First published at Planning Beyond Capitalism