Academic journal article Review of Social Economy

The Historical Approach to Political Economy

Academic journal article Review of Social Economy

The Historical Approach to Political Economy

Article excerpt

This article begins with an exposition and critique of the ahistorical approach of neoclassical economics (similar approaches have been criticized -- and an historical approach proposed -- in anthropology by Marvin Harris, 1989, and in sociology by Eric Olin Wright, et al., 1992). Then, there is a discussion of two Marxist approaches, the official versus the critical. By "official Marxism" is mean the version of Marx taught in the former Soviet Union and by most Communist parties for 70 years. By "critical Marxist" is mean all those Marxists who are independent and not tied hand and foot to a particular dogma or an official party program. The historical view of critical Marxism is identical in many respects to the "evolutionary" view of U.S. institutionalists. Many of the points made here in Marxist terminology could be stated equally well in institutionalist terminology, but for lack of space the parallels are developed only briefly in one section.

Equilibrium and Universal Laws in Neoclassical Economics

The main tool used by neoclassical economists is the notion of equilibrium. It may be defined as follows: "A market or set of markets is in equilibrium if the agents participating in that ... market(s) have no cause to alter their plans (how much they desire to buy and sell)" (Weeks, 1989, p. 36). This type of analysis assumes that the real economic world is mostly in balance, or that it is adjusting back to balance by marginal or incremental changes after some exogenous shock. This approach rules out evolutionary change as the central point of analysis. Paul Samuelson notes that a neoclassical equilibrium theorist "naturally tended to think of models in which things settled down to a unique position independently of initial conditions" (Samuelson, quoted and discussed in Mirowski, 1989, p. 390).

Not only is the economic world viewed as an automatic equilibriating process in capitalism, but the same sort of analysis is applied to any society observed by neoclassicals, no matter how different its institutions may be. Thus, the eminent neoclassical theorist, Lord Robbins, attacks "the view that the laws of Economics are limited to certain conditions of time and space, that they are purely historical in character" (Robbins, 1935, p. 80).

On the contrary, Robbins sees land, labor, and capital in every society; and he finds rational marginalist optimization behavior by consumers and producers in every society. The specific institutions of slavery or feudalism or primitive clan ownership do not change the marginal laws at all, in his view. Thus, Robbins claims: "No one will really question the universal applicability of such assumptions as the existence of scales of relative evaluation, or of different factors of production ..." (1935, p. 81). Robbins claims that one may draw very important conclusions from such universally valid assumptions.

A similar argument was made by the neoclassical economist, G. C. Archibald, who stated that the economic problem consists of scarce resources and insatiable needs; he concluded that this problem "is universal: it transcends times and space, political or social organization ... From the universality of the economic problem, it also follows that if the theory of the firm proves to be a useful ... portion of the theory of allocation ... in a ... capitalist context, so it must be in a Communist context; there must be a Soviet analogy" (quoted in Sawyer, 1989, p. 19).

So the same analysis can apply to neolithic cave dwellers, Egyptian pharaohs, feudal nobility in France, and modern English financiers. As one example of this approach, neoclassicals see competition in the market place as a product of an unchanging individual psychology -- whereas Marxists and institutionalists see it as a product of particular socio-economic relations. In the neoclassical view, "The 'market' represents rationality per se, outside any specific social context" (Amin, 1990, p. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed


An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.