In that sense, this article aims to explain and make a critical analysis
of the historical and epistemological process through which it has been tried “depoliticize”
the economics which still happens today.
The classical revolution
The classical school was born in 1776 when Adam Smith published his
famous book Investigations on the nature
and causes of the wealth of nations. The publication of this book was a
great revolution in the history of economic analysis by the fact that from
there it began to consider the economics as an independent scientific
discipline.
As is well known Adam Smith wasn't an economist by profession but rather
a philosopher especially interested in ethics, politics and law. This is
clearly reflected in several of the passages of Wealth of Nations when, beyond his initial approach about the “invisible
hand”, Smith analyzes the interests of different social classes and their
relationship with the good of the community in general. For example, with
respect to the landowners he argues that, as they get their income without
working, they often ignore their own interests and are therefore unable to
understand the consequences of any policy that might be proposed.
As regards the bourgeoisie, Smith considers that this is the social
class better able to appreciate their own interests and thus, of propelling
economic development. But this does not inhibit him see that we must be wary of
these men’s attitude toward public policy and that their interests necessarily
come into conflict with those of the working class because, as he himself
explains: “current salaries of labor depend on the contract established between
two parties whose interests are by no way identical. Workers want to get the
maximum possible and give employers want the minimum. While the first join to
raise them, the seconds meet to lower them”. (1)
In addition to Adam Smith, among the main representatives of the
classical school we have David Ricardo, Karl Marx and John Stuart Mill. None of
them ever separated political analysis of economic analysis but that instead
they always incorporated the first to the second. Clear examples of this are
the titles of theirs major books: Principles
of political economy and taxation (David Ricardo, 1817), Principles of political economy with some of
their applications to social philosophy (John Stuart Mill, 1848), and Capital: critique of political economy
(Karl Marx, 1867).
With regard to Ricardo, he takes as basic unit of analysis to social
classes which distribute the social surplus and therefore proposes that “the
main problem of political economy is to determine the laws that regulate the
distribution” (2). Starting from this premise it is evident the relationship
between economy and policy because Ricardo is going to come to defend the
interests of the bourgeoisie against the landowners arguing that “the interests
of the landowner are always opposite to the consumers and the manufacturers...
Interest to the landlord that increases the cost of production, which does not
favor the consumer... or the industrial... Therefore, all classes, except the landowners,
will be affected by the rise in the price”. (3)
Even more radical than Ricardo in his political analysis of the economy
is Marx who maintains the famous theory of class struggle: “The history of all
hitherto existing society is the history of class struggles. Freeman and slave,
patrician and plebian, lord and serf, guild-master and journeyman, in a word,
oppressor and oppressed, stood in constant opposition to one another, carried
on an uninterrupted, now hidden, now open fight, a fight that each time ended,
either in a revolutionary reconstitution of society at large, or in the common
ruin of the contending classes”. (4)
It is very important to note here the big difference from the analysis
of Marx on the conflict of classes with respect to the previous classics. While
Smith and Ricardo defended the interests of the capitalist bourgeoisie against
the mercantilist and feudal privileges of landowners in a time in which the
Industrial Revolution was just brewing, Marx defended the interests of the
working class front the preponderance of the capitalist bourgeoisie in a
context in which the Industrial Revolution had already been consolidated.
The first neoclassical counter-revolution
The first neoclassical counter-revolution was given at the end of the
19th century as a theoretical response to the uncomfortable policy implications
of classical analysis, particularly the marxist, with regard to the conflict
between classes. So Robinson and Eatwell explain us: “At the end of the 19th
century, the focus of social conflict had moved from the antagonism of the
capitalist and the landowner to the opposition of workers and capitalists. The
fear and horror aroused by Marx’s work were exacerbated by the effect that
throughout Europe produced the Paris Commune in 1871. The doctrines that
suggest conflicts were no longer desirable. The theories that distracting
attention, away from the antagonism of the social classes, had a good
reception”. (5)
It is in this context that arise marginalist and neoclassical schools which
main representatives were Jules Dupuit, William Stanley Jevons, León Walras and
Alfred Marshall. Facing the classic paradigm, which was based on social classes
as basic units of analysis, this new approach will support a radical
subjectivism in which the atomized individual who seeks to maximize his benefit
is the basic unit from which is built the entire building of the economic
theorist. This artificially removes any political or sociological factors of
the economic analysis and is in this sense that the English teacher Eric Roll
maintains that “schools of the utility claim their validity by a different
reason than the classical school because they hold that formulate a theory of
value independent of any specific social order. (...) Some theories that had
been made on the basis of equal individuals dedicated to save and work could
not say anything about the social differentiation of these individuals”. (6)
Economists of the Austrian school, and especially its founder Carl
Menger, were mainly responsible for the introduction of this mentioned
subjectivism in economic analysis. But in reality were León Walras and Alfred
Marshall who gave the final blow to the classical economics, understood as
“Political economy”, when they matematizaron the economic theory based on their
analysis of general equilibrium and partial equilibrium, respectively. It is
absolutely impossible for a mathematical system can consistently illustrate the
intrinsic relationship that has politics with economy. This was clearly perceived
by Alfred Marshall himself who, although "was a mathematician who could
use, and in fact used, algebraic and geometric technique to show the exact
relationships between different variables in certain well-defined situations,
(...) never felt fully satisfied with the purely mechanical study of abstract
forces that act in isolation. (...) Marshall who was a realistic deep
connoisseur of the complexity of economic life, (...) was convinced that it
should be something that this paradigm could not successfully assimilate
". (7)
References
1. Adam Smith, Research on the
nature and causes of the wealth of nations (1776), Ed. Modern Library, New
York, 1937, p. 149
2. David Ricardo, Principles of
political economy and taxation (1817), Ed. Everyman, 1926, p. 1
3. David Ricardo, Principles of
political economy and taxation, op. op. cit., p. 225
4. Karl Marx and Friedrich Engels, The
Communist Manifesto (1848), elaleph.com (electronic PDF), 2000, p. 25
5. Joan Robinson and John Eatwell, Introduction
to modern economics, Fondo de Cultura Económica, Mexico, 1976, p. 54
6. Eric Roll, History of economic
doctrines, Fondo de Cultura Económica, Mexico, 1978, p. 366
7. Eric Roll, History of economic
doctrines, op. op. cit., p. 389.
You can contact the author of this article in: “Dante Abelardo Urbina Padilla” (Facebook) and dante.urbina1@gmail.com (email)
You can contact the author of this article in: “Dante Abelardo Urbina Padilla” (Facebook) and dante.urbina1@gmail.com (email)
