Tuesday 5 May 2020
The 'Close' of Economic Science
The schism, the Great Divide, in economic
theory is always between the methodological individualism of the negatives Denken – society and the
economy are products of spontaneous individual choices for which economic
theory can only provide rational alternatives (a mathematical “proof of
existence” [Walras and equilibrium theory] or a “science of choice” [von Mises,
Hayek and Robbins]) – and the methodological objectivism of the Sozialismus for which social choices
must be imposed scientifically and collectively on individual members. But
crucially in both instances – whether for individualism or for collectivism –
the State does not figure as a fundamental, indispensable, constituent
ingredient of the scientific and practical spheres of economic action. For both
liberalism and socialism (and even for most “Marxisms”), the economy is an Object (a neo-Kantian “thing-in-itself”)
of scientific inquiry whose operation can be determined “objectively”,
scientifically, for the benefit of its individual members – taken
ontogenetically as “in-dividuals” – in accordance with the Law of Value, that
is, by acknowledging and positing the supreme “truth” that economic relations
are rationally
(logico-mathematically) quantifiable
either in a relative sense (Value is
the mechanical resultant of the “haggling” or conflict of atomic individuals
with subjective self-interested utility schedules, as in Neo-classical
equilibrium theory) or in an absolute
sense (socialist-Marxist notion of Value as “socially necessary labour time”).
Up until Adam Smith set out to formalize the operation or functioning of
“the market”, economics had not existed as a “science” separate from theories
of society or indeed of “the body politic”. Yet in this very separation of “economic science” from
other aspects of social life and from its history lies the fatal flaw of this
“science”:- because once its methodology leads it to exclude non-economic social forces as “exogenous
factors” or as “externalities”, then it becomes a “closed system” of pure
logico-mathematical relations in which “economic facts” are completely deprived
of all sociological and environmental content (of what Schumpeter called “extra-economic
effects”). Consequently, “economic science” is incapable of (a) specifying the content of its subject-matter and (b) explaining
historical change, including the
transformation of economic reality itself, totally extruding thus from its
scope both the “value” (in both senses of the word, the economic and the
ethico-political) of its inquiry and the very “positive empirical experience”
on which it is supposedly founded.
In his review of
Comte and Mach, in Knowledge and Human
Interests, Jurgen Habermas emphasises one aspect of positivism as his
crucial objection to it - namely, that positivism as a philosophy of science is
incapable of understanding and explaining the “historical evolution” of
“science” itself. We partly agree with Habermas; but this can only serve as an
“internal” critique of positivism in terms of its internal consistency, whereas
as we will discuss more fully below this type of criticism of positivist
methods entirely misses the point about their “external” real practical political
effectuality! In short, Habermas criticizes positivism in the name of “science”,
when in fact bourgeois “science” is a real political practice that cannot be
“contradicted” in purely “scientific” terms! “Science” simply does not have the
politically-neutral epistemological status that Habermas’s neo-Kantism assigns
to it – as Max Weber showed conclusively, although only obliquely (cf. “Objektivitat”
and “Science as Vocation”).
Put in simpler terms, science as praxis must
be able to justify its intrinsic human interest and it must combine theory and
facts: science without human interest is abulic or harmful; theory without
facts is empty, and facts without theory are blind. But the “facts” that
“economic science” pretends to theorise are the very violent reality that the
capitalist bourgeoisie has already imposed on human society! Bourgeois economic
science therefore pretends merely “to observe empirically” its misdeeds or
“facts”, and then to dress them up as “human nature” that gives rise to
“natural human rights”. This miserable combination of scientific positivism and ethical jusnaturalism is the very essence of
bourgeois economic science! At the hands of positivism and empiricism, the Statik of equilibrium theory contradicts
the Dynamik of capitalist reality: hence,
equilibrium expels history, stasis stymies metabole,
necessity chains freedom. How then to reconcile these irreconcilable opposites? How
to evade and escape these antinomies and apories?
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