Commentary on Political Economy

Saturday 21 October 2017

Economic Science and Nietzsche’s Invariance

Thus far, we have sought to show how the ontogeny of thought is founded solely on the twin notions of the indivisible In-dividuum and on the transcendence of the mind or soul. Indeed, whereas human beings, far from being indivisible atoms, are inseparable from one another (!) - whereas the only human interest is literally “inter homines esse” (to be with other humans), the ontology of thought defines individuality so that, first, it becomes a physical attribute, and second the epistemological basis of this individuality is derived from the transcendence of the mind. Hence, there is a hypostatization of physical nature on one side, and of spiritual mind on the other! 

Nietzsche could see the spurious character of the latter - of the self, of the Ego -, but failed to see the equally fictitious basis of his phenomenalism and naturalism. This failing is what we are trying to redress here with our elucidation of what we call Nietzsche’s Invariance. But how does this notion apply to science, and in particular, to “economic science”? As an illustration, here is an excerpt from a letter sent to Professor Bob Rowthorn at Cambridge, England, on the topic. 

Rowthorn email: "In a nutshell, my quest, provoked by your early work, was to answer this question (put in Kantian form): given that "value" is not and cannot be an "objective" entity, contrary to what Marx sought to prove with his "socially necessary labour time", how is it possible for the capitalist economy to function, that is, to reproduce and even expand the wage relation? (This is the classic question of economics that Hayek brought back to the centre of economic analysis - broadly put, how is a market economy "co-ordinated"? how is "the social synthesis" possible?) The important hint was in your genial link or nexus between "conflict" and "inflation": yet many questions remained unanswered. The task was not to determine how to measure inflation but rather to understand the far deeper "meaning" of inflation as a "measure" of social conflict, - put differently, to establish what the institutional and instrumental use of inflation as a monetary category could be. But above all, the hardest task remained to explain how it was possible for a "mathematical" relationship between two obviously fictitious notions - that of "price" and that of "value" or "quantities" (cf. the title of Hayek's "Prices and Production") - to be "effectual", that is, to serve as the "rule of thumb" for the conduct, regulation and expanded reproduction of the wage relation (let us remember that "profit" is meaningless without its "negation" - money wages). Once we have established, with Nietzsche, that there is no "scientific truth", the question then assumes Weberian overtones, revolving around how it is possible for the "rationalisation" [Weber] of social reality to occur. To answer this question I had to revise Marx's own approach to the content and methodology of what we call "science" - including especially this thing called "economic science". 

And that is what I have done in the works on Nietzsche (mainly in Part One, section 2 of "The Ontogeny of Thought") and Weber (mainly Part 3 dedicated to his methodology of social science). They are admittedly difficult works - because the subject-matter is difficult, involving a level of abstraction that would have tested even Marx himself, but one for which Nietzsche was far better equipped. So I am sending you now the draft chapters of the Nietzschebuch that I would be quite pleased for you to pass on to David. There is a whole universe of learning here; my greatest reward in life has been to have earned the financial freedom to be able to commit it to writing!

Once this analysis is understood, the musings of a Joan Robinson on "History versus Equilibrium" begin to sound like the kind of philosophical dualistic puzzles that keep undergraduates amused. The whole "intention" of neoclassical analysis was never to comprehend the capitalist economy as a "historical" reality, to reveal its "truth". The aim and practice of equilibrium analysis was never "to capture" or "photograph" a reality of any description. (Weber made this pellucid in the quotations I give in Part Three of the 'Weberbuch'.) Nor should neoclassical theory be confused as an "ideology" that somehow "distorts" this (fanciful notion of) "reality" (what Robinson and Lawson and others would call "history" or "the ontic"). A million times no! The power of neoclassical theory, and of equilibrium as the core aspect of it, is that it expresses "the will to power" of the bourgeoisie: it describes and understands life and the world NOT as it "should" or "ought" to be, least of all "as it is" - but rather as it MUST be for the bourgeoisie to be able to control the society of capital, to command living labour. In short, neoclassical theory is a pure instrument. Put in Weber's own analytical framework, it is the purest expression of the "value-free rationality" that displays entirely the "freedom" of the bourgeoisie, subject to their will to power! That is what Weber called "the politics of responsibility" opposed to the moralising "politics of conviction" espoused and represented by the Sozialismus. For Weber (and I accept this) "ideology" belongs to the Sozialismus, not to the "rationality" of the bourgeoisie! Equilibrium theory and game theory with their "equilibria" are the bluntest "value-free" expressions of this will to power - the will to exploit and dominate - because they allow that "mathematisation" or rationalisation of social life that makes the reproduction of the society of capital dependent on the survival of the wage relation as its dominant institution. Here "rationality" and "freedom" are seen not as "positive values", as "ultimate truths" shared by and common to all human beings; they are seen instead "negatively" in terms of "choosing what conflict and strife among human beings make us choose"!

(Just to exemplify the total in-comprehension of this point by academic economists, this is from Prof. Harris's [Stanford] review of Robinson's "History v. Equilibrium":

Though critical of the concept and uses of equilibrium, Robinson was not a
“Luddite”. She was too diligent and penetrating an analyst to dismiss the advantages,
albeit recognized to be quite limited, of using the equilibrium concept as a tool for analytical purposes. She herself used the device to great effect in her own work. She viewed it, at times, as a “thought experiment”, useful for solving “analytical puzzles”, even to the point of recognizing a “perverse pleasure” in this practice [1956, p. 147, n. 3].

Obviously, had Robinson truly recognised the significance of equilibrium analysis as a project of command over living labour she could never have used it "as a tool for analytical purposes" because the usefulness of neoclassical equilibrium theory does not lie in the "analysis", which is "meaningless" as Hayek first and then Myrdal [and Tony Lawson, da ultimo] showed, but in the "purpose", which is the mathesis of capitalist "command"! As Weber would put it, economic theory is not an end but a means, a tool; its rationality is not a Wert-rationalitat but a Zweck-rationalitat.)

This aspect of capitalist reality is entirely absent from Capitalism, Conflict and Inflation. The book valiantly and lucidly enucleates and explains the complex institutional interaction between the "phenomenon" of inflation and its "role" as the "measure" as well as a mediation of class antagonism as the product of a "trade-off" between money wages and unemployment levels. But it does not answer the basic question of how it is possible, not just institutionally but above all epistemologically, even ontologically (!), for inflation as a cognitive notion to serve as a "measure" of class conflict - as a tool (!) for the analysis of conflict. For inflation to be a "measure" of conflict, the bourgeoisie has to ensure that "conflict" remains within the institutional bounds that can be measured by inflation. Above all (and this is the most important point of all) "conflict" must be of such a "nature" that it is capable of being measured and mediated by the "phenomenon" of inflation.This in turn requires the elimination of all "values" other than the simple and blunt function of capitalist command over living labour represented by its political subordination to dead labour through the institutional form of the money-wage. Keynes's 'General Theory' is all here! This is his greatest discovery: - the money wage as the fundamental "unit" of measurement of social conflict in the society of capital; the centrality of the working class in that historical stage of capitalism - a "centrality" that the working class and Keynesianism (!) are clearly losing and "ex-hausting" as the social conflict generated by the wage relation poses new "systemic risks" to the rule of capital.

From the epistemological angle, we must come to another realisation. Neoclassical analysis works on mathematical identities (equilibria). As Keynes would say, "one of two things": either the two sides of a mathematical equation are absolutely identical, in which case they cancel each other out (they "say" absolutely nothing - Wittgenstein); or else they are not identical (Nietzsche), in which case the "equation" is impossible. Yet it is the very ability of human beings to perform mathematical calculations and to treat them as "valid" that displays the full "value-lessness" of life and the world for Nietzsche (and for me), and that annihilates all notions of "truth", scientific or otherwise. I call this "Nietzsche's Invariance" (as in matrix algebra). (A literary example: you will recall that Winston Smith in Orwell's 1984 believes that it is "the truth" of the statement "two plus two makes four" that "saves" him from the arbitrariness of Big Brother's totalitarian power. What Nietzsche and I argue here instead - but so did Wittgenstein! - is that it is precisely our ability to conceive of mathematical identities that is the supreme proof that the "power" of Big Brother is possible!) Put in other words, if "truth" actually ex-isted it would not be "detectable" by us - because all criteria for "truth" need themselves to be "truthful" (a regressio ad infinitum). (Thomas Jefferson intuited the difficulty when he wrote: "We hold these truths to be self-evident..." But if "these truths" are "self-evident", why do we need "to hold them to be so"? The same applies to "mathematical and logical truths" - cf. Godel.)

Don Patinkin also came very close to this pivotal point in the philosophy of mathematics, language and science. His response or objection was that mathematical equations "save time" in computation! But Wittgenstein will reply (maybe aiming his poker at him!): What does "time" have to do with mathematics and logic? Patinkin says that "time is a device to stop everything from happening at once". But Nietzsche will reply (almost his exact words): who tells you that everything does not happen at once? If mathematical and logical identities "say" anything, it is precisely that "all the powers of the universe are drawing to their own conclusion". (These conclusions were reached but inchoately as early as Nicholas of Cusa in the 1400s and then taken up by Leibnitz - and of course by Russell in his discussion of Leibnitz's "pantheism". None of them went as far as Nietzsche in confronting them "fearlessly" [I am referring to the book of the 'Gaya Scienza' called "We, the Fearless Ones"].)"]

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