Critical Realism, Marxism and the Critique of Neoclassical Economics

By O'Boyle, Brian; McDonough, Terrence | Capital & Class, February 2011 | Go to article overview
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Critical Realism, Marxism and the Critique of Neoclassical Economics

O'Boyle, Brian, McDonough, Terrence, Capital & Class


There is an historical anomaly in the relationship between critical realism and mainstream economics. While inadequacies within neoclassical development theory originally drove Bhaskar to an analysis of its philosophical deficiencies, Bhaskar himself has never elaborated an explicit critique of the neoclassical mainstream. This is despite the fact that he not only approves of Marx's analysis of the 'vulgar economy' of his day, but actually posits it as the paradigmatic example of ideological critique. (1) Indeed, this silence is all the more striking given that others within realism, most notably Tony Lawson, have placed such a critique at the centre of the development of their positions, but have explicitly eschewed the possibility of an ideology critique in doing so. Thus we have a situation within realism wherein, on the one hand, its founder has chosen to restrict any criticism of economic orthodoxy to its meta-theoretical underpinnings and, on the other, those within the critical realism in economics (CRE) project - a genealogically related school, but one which is developing its own trajectory - have sought to engage much more directly with academic economics, but on a level which has little basis in Bhaskar's initial work. (2)

While some authors have noted this distinction and the tensions it entails (see, for example, Nielsen, 2002), others such as Fine (2002, 2004) have taken the CRE critique of orthodoxy as being the definitive (in fact the only) critical-realist position on the economic mainstream. This, however, is not the case, and it is the contention of this article that conflating the CRE position with that of Bhaskar and critical realism as a whole has been a mistake. We wish to propose an alternative line of critique of neoclassical economics to that developed within the CRE project, which is more in line with the more explicitly Marxian position of the (early) Bhaskarian tradition within critical realism) This will be achieved by drawing out the tensions that Nielsen has perceptively noted, before using these to delineate the CRE project from its Bhaskarian relative. It will be found in this context that most of the weaknesses identified by Fine are confined to the CRE position. We will contend that, ironically, CRE is often uncritical and despite its explicit attack on positivism, frequently positivist. This is evident in both its preoccupation with the epistemological inadequacy of mainstream economics and in its clear lack of a critical sociology grounded in the structural reality of the mainstreams real historical trajectory (Fine, 2002). (4) This is not the case for Bhaskarian realism, however, and in demonstrating this, the paper will attempt to put clear water between the two traditions and in the process provide criteria for preferring Bhaskarian (Marxian) realism to that of CRE.

Part 1

Two strands within critical realism

In an important contribution to the CR literature, Peter Nielsen (2002) has maintained that in order to advance the position of realism within political economy, one must initially attempt to resolve a number of currently existing tensions, centering on 1) the presence of two distinct research programmes within political economy - a Marxian current and a broadly heterodox one; and 2) more generally, a tension surrounding the status and importance of philosophy and the scope of critical realism. This section will argue that while the analysis of the first tension is illuminating, the second is mis-specified, and we therefore begin by recounting Nielsen's case for distinguishing the two perspectives before moving on to substantive concerns.

In his appraisal of the situation within political economy, Nielsen contends that a particularly striking feature of Bhaskar's critical realism is its Marxist pedigree (p. 728). He offers evidence from Reclaiming Reality and The Possibility of Naturalism to suggest that, in the main at least, Bhaskar's work is centred on traditional Marxist themes such as ideological critique and fetishism, and on a mode of reasoning that originates in Marx's own mature work on political economy.

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