The 1983 Nobel Prize in Economics: Neoclassical Economics and Marxism

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The 1983 winner of the Nobel Memorial Prize in Economic Science, University of California Professor Gerard Debreu, epitomizes the current standard of excellence in establishment "economics." His award, following thoe given in the 1970s to the economists Kenneth J. Arrow and Tjalling C. Koopmans, invites us to evaluate the pinnacle of bourgeois economic theory from a critical Marxist perspective.

For over a hundred years, two broad traditions of economic theory have clashed over ho to understand and change the economic aspects of capitalist societies. We may call these contending approaches the class vs. nonclass traditions. The former is usually identified with Karl Marx. The latter dates back at least to Adam Smith's Wealth of Nations (1776) and David Ricardo's Principles of Economics (1817). Since then, major nonclass economists have been Leon Walras in the 1880s, Alfred Marshall in the 1890s, John Maynard Keynes in the 1920s and 1930s, and Paul A. Samuelson after the Second World War. For simplicity, we will use the term "MArxism" to label the class tradition, while borrowing the conventional term "nonclassical" for the nonclass tradition.

Of course, there are variations on the basic themes in both these traditions. In recent times formulations have gained attention with such labels as neo-Ricardian, post-Keynesian, and neo-Marxian economics. In other circumstances it would be appropriate to differentiate these new theories from each other and from their predecessors. However, for our purposes here we can broadly consign the various neo- and post-theories into the class or nonclass traditions according to their particular arguments.

The two tradtions of economic analysis literally see different things when they look at societies. The Marxis t tradition focuses on class relations in society and how they interact in a complex way with all the other, nonclass aspects of society to generate change. The neoclassical tradition usually denies the very existence of class (although occasionally using the word "class" in a different sense from Marx's). IPt focuses rather on the more-or-less given human natures of individuals and seeks to show analytically how societies function and change depending directly upon such hmuman essences. Proponents of the two traditions not only see the world differently, they also act differently in constructing and changing social institutions. Social relations are shaped, consciously or unconsciously, in part by the economic theories lodged in people's minds. In short, the different traditions of economic analysis have real and different effects on the politics and hisotyr of society. As we intend to show, these different effects can matter a great deal. After all, that is why a Marxist critique of the nonclass tradition is worth-while.

In the award to Professor Debreu, the Nobel committee made a choice between the two traditions. It reaffirmed the "scientific correctness" recognized in its earlier awards to other economists working within the nonclass tradition. Neoclassical economists are thus approved as engaged in the true, singular "science" of economic life. For the Nobel committee, as indeed for most neoclassical economists, truth is absolute and singular: they have it, and Marxist class-analytic economists do not. They do not accept the possibility of two alternative theoretical traditions which made sense of the world differently, whose proponents see and act differently. Indeed they see right and wrong, truth and falsehood, objectivity and political bias, good and evil with all the dualistic intensity of old-time religions. The persistence of the class tradition in economics, in the face of "science," is then written off--or hotly denouced--as the perverse result of diabolical political intentions, sheer ignorance, or both.

The Nobel Prize, for the nonclass tradition, is an important annual ritual; it hallows that tradition's efforts to secure its social preeminence by casting itself in the role of the science of economics. …