Marx: The Spectre Haunting Economics

This paper was presented to the 1998 conference of the Brazil Society for Political Economy. Two short sections are flagged for later incorporation, and this never happened so the article is until now unpublished. The ground these were to address is fully covered elsewhere, however this text contains material that does not exist anywhere else, so for the record I am depositing it with Repec. The original abstract follows: The paper examines the present state of the discipline of economics in the light of Marx's Critique of political economy. Marx's dedication to the study of economic theory is without parallel in the history of the subject; yet, in the work of the economists of today, he receives less attention than in any other subject. Moreover the profession's unanimous official teaching, repeated tirelessly and dogmatically for most of this century, is that Marx's development of the classical theory of value leads irrevocably into contradiction, that therefore the further development of this theory is fruitless and the only alternative is its current orthodoxy. This state of affairs is called into question by an internal crisis of economics, provoked by a combination of two factors: the appalling failure of its official remedies, and the political defeat of Keynesianism. Major international institutions such as UNCTAD, the World Bank and the IMF are in open conflict over their predictions and recommendations concerning globalisation; the profession itself faces a growing body of internal criticism, and heterodox economic associations are flourishing. The abandonment of Keynesian economic remedies, the consequent loss of influence by economics in policy-making circles, and the relegation of economics to the status of an ancillary of banking and commerce, has accelerated this crisis. The large body of economists displaced from positions of influence at the ears of governments have been reflecting more carefully than before on the transitory nature of market phenomena. This paper proposes a materialist analysis of the theory and practice of academic economics, the body of thought which Marx dubbed the 'graveyard of economics'. It proposes to subject the claim of the profession to be acting as a science to a rigorous theoretical enquiry, examining both its reaction to the empirical facts of its failures, and the manner in which its theoretical categories express the material interests to which it is subjected. The aim is not dismiss the profession and its products as simple apologetics, but to uncover the internal structure of its thought and to propose an alternative, critical standard of scientific conduct for economic enquiry under a market economy.