Commentary on Political Economy

Monday 31 October 2011

‘Time Is Money’ – Intellectual Origins of the Neoclassical Revolution, Part One.

There are two sides to human activity. The very “necessity” of human action requires a mediation between volition and gratification, between ends and means. The ends are “ideal” and the means are the ex-pression of volition through human instrumental action that takes place (a “place” is the material expression of human activity which is indistinguishable from ec-sistence). Both the projection of the ideal ends and the manifestation of the means are human “needs”. The point is to ensure that human activity does not become destructive in the sense that it foreseeably defeats its purpose by negating or barring the harmonious expression of this “system of needs”.

The task of German Idealism, culminating in the Absolute Idealism of Hegel and in the historical materialism of Marx, is to enucleate this “finality” of human living activity in the reconciliation of volition (the will) with freedom (the limits of the scope of the will on the environment, above all the “human” environment). Human living activity is an ex-pression of the will, it is its ful-filment, that dis-covers or un-conceals (the Greek meaning of a-letheia, a remembrance that un-covers the truth) the inter esse (“interest”, the common being) of human beings as beings human, as individual manifestations of the species.

Even British Utilitarianism, from Hobbes to Locke and Bentham through the “science” of Classical Political Economy, allows the homologation of human activity as an inter-est, a common being, through the mediation of “labour”. The “labour” is intended as a mechanical “power” – a “force” that works in time – and that can be measured and quantified in terms of the “utility” of its “pro-ducts” – the “goods” it “brings forth”. And because this “utility” is not “subjective”, because it is inter-subjective, it can be quantified even to the extent that it can be “exchanged” for the “labour” of other human beings. In other words, this “labour” becomes a “quantity” that can be accumulated or “saved” in the shape of its material pro-ducts so that it can then be utilized “to purchase or acquire” the “labour” of other human beings in the form of “wages”.

Even in the form articulated by Karl Marx, even with the distinction that he drew between “labour” and “labour power”, the fact that Marx uncritically accepted the ability of “the market mechanism” to allocate labour-power as a resource through its “measure” as “socially necessary labour time” – this fact meant that the objectification of human living labour into its pro-ducts as “dead labour” was accepted universally even by the Socialist parties that represented the industrial proletariat from the second half of the nineteenth century.

Even when “labour” is understood as “labour power”, and perhaps especially then, its “utility” is accepted as being “inter-subjective”: labour is the source of all “addition” of human wealth to the “wealth” already freely available in “nature”. By “trans-forming” nature, labour “creates and pro-duces” goods that have universal human “utility”. Consequently, human “labour” constitutes the “social synthesis” – the ability of human beings to reproduce themselves and their societies physically and to accumulate wealth – “to grow” their economy.

The “satisfaction” of human needs and desires comes at the “cost” or “price” of human effort, of “labour”, of toil – a reminder that excessive material gratification negates the spirituality of mankind and constitutes a neglect of religious duty: in excessive amounts, it may even amount to sinful conduct. “Labour as toil”, therefore, can be also a form of “penitence”, of atoning for the sins of the flesh: the Benedictine command of “Ora et labora” (work and pray) calls the faithful to an existence of “renunciation” of wordly goods in exchange for other-wordly rewards.

This is the essence of the “calling”, of the Askesis, of the ascetic ideal described by Weber as the origin of the “spirit of capitalism”: the elevation of “labour” to “an end in itself” finally degenerates in the accumulation of the “goods” it produces – especially when these goods can be “exchanged” for the labour-power of other human beings. And here we have truly the origins of capitalism: - NOT in the Askesis, but rather in the ability to command the “labour-power” of formally “free” human beings!

Max Weber not only fails to perceive this essential distinction, but he also makes the error of identifying the centrality of “labour” as the ascetic ideal with the genesis of “the spirit of capitalism” and, therefore, with the birth of “a specifically bourgeois economic ethic”. So long as “labour” – however understood - remains the “essence” of “wealth”, the bourgeoisie will never be able to breathe easily or sleep peacefully. – And that for reasons that are too obvious to discuss, really. Even in its “socialistic” acceptation – from the left Ricardians to Keynesians, from Proudhonians to Kaleckians – the bourgeoisie barely tolerates the “goody-goody” moralizing of these “wet” ideologists.

The only “economic theory” that can serve as “a specifically bourgeois ethic” or strategy (“ideology”) is one that stresses the paramountcy of “capital” in the process of production. But to do so, what must be defeated if not confuted first is precisely this archaic centrality of the Arbeit (“labour”) in the history of Western metaphysics, from the Bible (Paul Samuelson in his Economics textbook cites the Old Testament: “The laborer is worthy of his hire”!) to Paul Krugman’s “Conscience of A Liberal”, all drenched as it is in Keynesian buffoonery and mental confusion. And the centrality of “labour” consists all in this “egregious and nefarious” belief – this absurd “faith” – in the ability of “labour” to provide “the social synthesis” – to be “social labour” – to act as the foundation of the inter esse, of the “common being”, of what turns atomised “human beings” into “beings human”.

The Neoclassical Revolution that began in the middle of the nineteenth century is perhaps the most imponent ideological and conscious effort ever performed in human history by a social class to defeat the ideology of another class using all the power influence and resources – intellectual, religious and propagandistic – available to the capitalist bourgeoisie on the back of its exploitation of human living labour.

Closely linked to the “reaction” against the French Revolution and the European uprisings of 1830 and 1848, the theory of marginal utility first excogitated by Gossen, was elaborated in German engineering circles and then divulged by Jevons and Menger, then Bohm-Bawerk and the Austrian School, until it was promulgated and widely publicized by Marshall and formalized mathematically by Walras as “general equilibrium analysis”.

In our next intervention, we will take a closer look at this “Copernican revolution” (it is the claim made by Stanley Jevons about the importance of his theory, reported by Keynes in “Essays In Biography”) or rather “counter-revolution”.

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