Lecture
Before discussing this topic, let us emphasize: political economy differs from "economics" also in that it poses the very questions that the "mainstream" seems not to see.
The political economist, unlike his neoclassical counterpart, reflects objective socio-economic problems and contradictions that cannot be reduced to the tasks of maximizing income and ensuring macroeconomic equilibrium, and tends, rather like the gadfly celebrated since Socrates, to pester the calmly working "professionals" with strange questions: Are the forms you are studying, colleagues, not perverted forms — that is, forms that distort content into its opposite? Is there not, right beside you, an abyss of other research fields and problems that are fundamentally important for understanding the nature and fate of today's economy and society, yet cannot be analyzed with your methods and tools? Is there not, quite close to you (and even within your own universities), some other clientele besides business and the state — one that poses to the science questions different from those you are accustomed to answering? Today these questions are being asked increasingly not so much by the departing generation of post-Soviet professors (in the former USSR) who grew up on Marxism and never renounced it, or by those belonging to the "generation of '68" (in the West), but by young generations of students and other intellectuals, whose demands we described in the preface; these questions are being asked by activists of the multimillion-strong social movements of the European Union and Asia, the USA and Latin America, the CIS and Africa...
Contrary to the opinion of many specialists in the social sciences, the authors believe that the questions posed by these subjects of the historical process must be answered. The approaches that respond to these challenges and serve as an alternative to "economic imperialism" presuppose a fundamentally different emphasis, one genetically rooted in classical political economy — the use of a broad socio-humanitarian (and, under present conditions, also eco-oriented) approach and methodology for studying economic processes themselves, which in this case are viewed as merely one sphere of social development — a sphere, moreover, in which its means, rather than its goals and values, are formed, and which is therefore subordinate to, and bounded by, the tasks of the progress of Man, Society, and Nature. This, in our view, is the chief defining feature of both classical and contemporary political economy. In this context the latter appears as an eco-socio-humanitarian-oriented economic theory, counterposing a kind of "expansion" of socio-humanitarian and ecological approaches into the domain of economic phenomena, in contrast to the current — "economics-style" — expansion of narrowly economic (market) approaches into the social, political, and humanitarian spheres. At the same time, the properly "political" aspect of political economy in no way disappears, forming one of the central problems of the broad social bloc. This "expansion" of social (including political) and humanitarian problematics is nothing fundamentally new for classical political economy (which is, incidentally, one reason we so often use the term "re-actualization"). Beginning with Adam (Smith is meant here), classical political economy proceeded from the fundamental unity of the moral and economic principles. For Karl Marx, the broad social, political, and humanitarian (and, in a number of works, "naturalistic," i.e., in today's language, "ecological") context of economic processes was self-evident. It was no less self-evident to such followers of his as V. I. Ulyanov, G. Lukács, and many others. Moreover, even the "advanced" Soviet textbooks on historical materialism fought hard against a "crude economic materialism" that ignored the reverse influence of the "superstructure" on production relations and failed to account for the complex web of interactions between production relations and productive forces, and between society and nature.
But in this context that is not the main point. Humanity is entering the twilight period of the world that Marx called the "economic social formation," and in this epoch the problems of interaction between economic and socio-humanitarian, ecological, and technological aspects of development are becoming fundamentally significant. That much is a truism. The question, however, is how to respond to this truism — by the method of "economic imperialism" (i.e., by imposing market fundamentalism on non-economic spheres) or through the eco-socio-humanitarian transformation of the economy. This strategic alternative is directly linked to the theoretical debates between the resurgent classical political economy and the still-dominant economics. These two paradigms answer all the "eternal" questions of economic theory in substantially different ways, defining differently the very phenomenon of the economy (i.e., their own subject matter) and the methods for studying it, its actors, and its basic categories. It is perhaps worth dwelling on this in somewhat more detail, by conducting a brief comparative analysis of these two paradigms along the parameters outlined above.
Thus, in the interpretation of economics, the economy itself appears as the sphere of individual choice, by a rational economic individual, of the most efficient way of using limited resources. This thesis may be somewhat adjusted (in particular, in light of current debates about the extent of the bounded rationality of the individual), but the fundamental framing of the question does not change: the central problem is the choice, by an atomized actor, of the optimal model for conducting transactions, which by definition are market transactions. It is precisely this model that is transferred to other spheres of social life as well. Moreover, in most cases the masters of monetarism (who define the mainstream within economics) tend to reduce economic science to a theory of money altogether (the statement "economics is money" is attributed to dozens of "classics" of economics, and even to Russian finance ministers). Our science treats "the economy" in a fundamentally different way. The subject matter of the renewing classical political economy is the totality of (1) qualitatively distinct, (2) historically specific, (3) objectively conditioned (4) systems of (5) production relations, into which not only individuals but also (6) their social groups enter in the (7) process of the reproduction of human society. These systems (8) interact with nature and with the technological foundations of the economy, as well as with (9) its socio-humanitarian shaping, in the course of (10) historical development, whose criteria of progress set the highest criteria of efficiency for the economic process. All these emphases radically distinguish the political-economic approach. At the same time, a number of objects of study coincide for political economy and economics: both analyze the processes of the movement of goods (products, services) and the actors of this process (the individual, the state...), and they share similar categories (value or worth, money, capital, rent...). That is why comparing these paradigms makes sense. The research methods of these disciplines are likewise quite different. Whereas for economics the starting point of research is, above all, quantitatively measurable (in the overwhelming majority of cases, in monetary terms) empirical data, for political economy it is social practice, understood as the activity of the social individual, while empirical data in most cases are no more than an indirect reflection of appearances and perverted forms that must be investigated in order to reach the truth, rather than accepted as fact = criterion of truth. For economics, research itself is above all positive, verifiable modeling (as a rule, mathematical) of the functioning of certain market parameters, the behavior of its actors, and, in part, regulatory interventions. The key link in the method of political economy is the dialectical reflection, within a system of categories, of objective economic relations, their contradictions, and their historical development. In this system some categories (appearance) negate others (essence), and only the system of categories as a whole gives a concrete picture of the subject matter, while contradictions are evidence not of error but of an approach toward truth. Mathematical models in political economy, for their part, play the role of one of the forms for depicting quantitative interactions, far from exhausting the complex world of relations within the economic system.
The understanding of the actors of the economy differs just as much. As we have already written, in economics the human being is a more (for some schools) or less (for others) rational egoist who maximizes his utility (which, as a rule, is identified with money) and minimizes his costs (above all, of labor). If the problem of human qualities arises at all within this paradigm, it is only in order to turn the person into a special kind of capital and then consider him from only one angle: which of his qualities it is most profitable to invest in developing. In classical political economy, Man is capitalized not by accident, for, first, his personal development is posited as the supreme criterion of progress and, correspondingly, the supreme measure of the efficiency of any economic system.
Second, it is shown that Man is qualitatively different in his socio-economic being across different economic systems: under pre-bourgeois systems he could be an object of extra-economic compulsion, striving to reproduce a traditional type and volume of activity, and regarded the maximization of money as an immoral pursuit; under a market economy is born that very economic man whom economics regards as "natural," although in reality this personality type and its corresponding system of values and motives became dominant in the world barely a hundred years ago: before that, most people produced and consumed under the influence of entirely different intentions. Moreover, at present a new personality type is increasingly actively developing — the subject of creative activity, for whom labor becomes a value rather than a burden...
Third, from the standpoint of political economy — both classical and contemporary — man under the "economic social formation" is embedded in large socio-economic structures (classes, strata, etc.), which in turn also substantially determine the type of his economic behavior, values, and motives. Correspondingly, fourth, the problem of rationality in political economy is, above all, a question not of greater or lesser rationality, but of the type of rationality. We proceed from the premise that there exist qualitatively different kinds of rational human behavior. That is why for us the main question is not how rational a person is, but how he is rational — what and why he maximizes (honor and adherence to tradition, money, creative activity, justice and solidarity...), what and why he minimizes, and, most importantly, how and why he performs particular acts in his social-historical practice, how and why he determines himself by supporting or rejecting eco-socio-humanitarian reforms, by initiating (or supporting), or not, revolutions (including anti-feudal ones, for example the War of Independence in North America), and so on. And last (in order, not in importance): from the standpoint of Marxist theory, man is not only a product of certain productive forces and objective social relations (above all, production relations), but also the maker of history. These are two opposite yet unified hypostases of human being within a social economic formation.
It is significant that in recent decades, within neoclassical economics and theories based on its methodology, relatively new developments have appeared in the area of the problem of the human being. Among such "discoveries" are the works of representatives of the new institutionalism, who have found that institutions influence the decision-making and choices of individuals. Here, so to speak, no comment is needed: this is a direct borrowing of one of the conclusions of Marxism. As we have noted more than once, representatives of our school showed a century and a half ago that, in particular, production relations determine the social type of the human being, his interests, values, and motives. "Translating" this thesis from the language of Marxism into the language of institutionalism, and reducing the problem to a description of the forms of production relations (without analyzing their essence and its contradictions) — that would be the "contribution" of this school on this question, were it not for a significant "nuance." And this "nuance" is neither accidental nor insignificant: the new institutionalism offers concrete developments that reveal, for the processes of capital accumulation, important forms of the alienated existence of the human being under late capitalism. On this last point, the new institutionalism and the neoclassical developments of recent decades have indeed made real progress, revealing, following Becker, ever newer forms of the "marketization" of the human being and his subordination to the global hegemony of capital. For the practice of the principal actors of the market system (to put it more bluntly and precisely: of the bourgeoisie in general and the nomenklatura of global capital in particular), these are, without question, quite important theoretical results with great prospects for practical application.
No less important are the questions of whether such "actors" as collectives, social strata, and classes are relevant for theoretical economic analysis, and, finally, the question of what society is and whether it can be regarded as an independent actor possessing certain real economic interests. To assert that, from the standpoint of political economy, the interests of the people as a whole are not a fiction, nor even merely a theoretical abstraction, but a real economic phenomenon that must be reckoned with in practice and studied in theory, let us give just one example. The universal human interest in the preservation and restoration of nature is a real factor necessitating internationally coordinated economic action and the incurring of significant costs; it is a phenomenon that requires a shift, in assessing macroeconomic efficiency, toward indicators that take into account the depletion of non-renewable natural resources and environmental pollution, and so on. And this example by no means exhausts the spectrum of national interests, which include a host of theoretical and practical problems of social protection, economic security, etc., requiring a corresponding adjustment of all evaluative indicators, and not only these... Even more complex is the question of the state and its role in the economy. In political economy the state appears as a historically variable actor, specific to different economic systems, representing a complex aggregate of interests (ranging from the interests of the people as a whole to the interests of the class dominant in a given society, as well as the interests of the state bureaucracy as a special subsystem of this institution). Correspondingly, the role of the state in the economy is by no means reducible to the minimally necessary intervention associated with compensating for market failures. It is defined as the actions of a special economic subject realizing a special mode of economic coordination — accounting, control, regulation, programming, etc. — developing a new class of relations of (public) property, of income distribution (social transfers, and not only these), of reproduction, and so forth. The seeming similarity in the definition of the "firm" in post-classical political economy and in economics also turns out to be illusory.
On the one hand, economics (and even the new institutionalism) has, in essence, borrowed the classical political-economic definition of the principal economic agent of the market economy: (1) the separate owner of a commodity (in developed form, of capital), for whom (2) planned internal ties and competitive-market external ties are characteristic (recall the definition, given in Capital, of capitalist cooperation as the historically and logically original form of the capitalist "firm").
Neoclassical economics reproduces the first (only in somewhat different words), the new institutionalism the second. On the other hand, the political-economic approach to interpreting the primary economic unit is broader and deeper. Broader, because it involves identifying such a unit across different economic systems. Thus, in the era of pre-industrial feudalism the primary unit was the manor, the peasant community; in early capitalism, simple capitalist cooperation; in developed industrial capitalism, the capitalist factory; in the post-industrial system, the capital-network, and so on. Deeper, because political economy specifically analyzes the difference in the technological foundations of the primary unit (as we noted above), its socio-economic form (say, under capitalism it evolves from the small producer of commodities to the transnational corporation), and its legal form. Finally, for political economy the "firm" is a cell in which all the production relations of a given economic system are reflected (as the ocean in a drop of water) — the latter being also, in part, characteristic of the classical institutionalism and economic sociology that are close to political economy. This is why the question of interpreting practically all economic categories will confront us with the same tasks-problems of distinguishing and correlating their meanings and place in the science, which differ between economics and political economy...
And all this, in the end, will require an answer to the key questions:
Thus we have again (we hope, at a new turn of the inquiry) returned to the conclusion of one of the preceding subsections: practice as the activity of the social human being making history is far broader than business in a stable bourgeois society. This thesis allows us to continue the comparative analysis of economics and political economy.
And we shall continue it by appealing to a banal proposition: do we acknowledge that the world is qualitatively changeable and that these changes have been occurring especially intensively in recent decades (the post-industrial revolution, the intensification of global problems, the birth and collapse of "actually existing socialism"), and that, increasingly, it is precisely these changes that will define the leading edge of our social practice and hence of theory; do we acknowledge that the world is global and that its socio-economic life cannot be reduced to the functioning of the market; do we acknowledge, moreover, that the politico-economic theory needed for practice in the broad sense of the word cannot be reduced to the narrow set of conclusions used by economics? If we acknowledge all this, and also take into account the differences between political economy and economics formulated above, then we can formulate some quite important methodological hypotheses showing the range of problem fields that economics either does not cover at all or treats by borrowing from the stock of political economy — and borrowing superficially, incompletely, and without acknowledging the original source. This range will correspond directly to the specific character, outlined above, of the subject matter and method of post-classical political economy versus economics.
1. "Beyond the pale" of economics remain, in essence, all questions concerning the study of non-market economic systems and non-market economic relations; this theory is "market-centric"; whatever is not the market does not exist for it, or is assessed solely as a "market failure" to be minimized (we shall reflect specifically on the "market-centrism" of the contemporary mainstream in the next text, and we shall mention below some contemporary exceptions — for example, the economics of happiness).
2. Even if we set aside non-market systems, economics provides theoretical grounds only for studying the mechanism of functional interconnections among various economic agents. The problems lying at the depths of the essence of the "market economy" — the complex system of capitalism's production relations, the laws of its evolution, its contradictions, the causes of its birth, development, and decline — this theory does not even pose, and cannot pose.
3. Economics leaves aside the study of the real social relations among various large groups of people (classes, strata) in the process of production and distribution, and not merely of exchange and consumer choice. As a consequence, both production-economic and socio-economic problems are largely ignored, and along with them the economic foundations of socio-class stratification, the understanding of the interests and behavioral regularities, contradictions, and compromises of these forces, and the causes and consequences of reforms and revolutions, etc.
4. Beyond the pale of economics also lie the causal links characterizing the problems of macroeconomic dynamics (reproduction). Answers to the questions of the causes of crises or their absence, of the causes of this or that quality of growth, of the relationship between growth and development, of the economic foundations and criteria of socio-humanitarian progress (or regress), etc., cannot be found within the framework of standard macroeconomics. The latter provides only a characterization (more or less adequate, since it always abstracts from a mass of parameters that are fundamentally significant but not quantifiable) of certain functional relationships (growth models, etc.).
5. With a small number of exceptions — works written, as a rule, by scholars who came to neoclassical economics from classical institutionalism and/or Marxism — economics ignores the problem of the interaction between the material-technical foundations of the economy and economic processes proper. Left outside its purview are the economic causes and consequences of shifts in technological modes of production, their influence on economic processes, relations, and even the behavior of economic agents. It does not consider the question of why and how a particular type of production relations determines a particular type of technical evolution — the dominance of luxury-goods production in the era of late feudalism, the fetishism of things characteristic of the market economy, the orientation toward the production of simulacra noted already by Baudrillard (we write about this type of market in Appendix 1 of our book), increasingly characteristic of capitalism in the postmodern era... These problems are actively studied in the Western literature, but almost exclusively outside the methodology of neoclassical economics.
6. Finally, for economics, by and large, only those economic parameters exist that are subject to quantification, that can be expressed numerically. From everything else — in essence, from the main substance of the economy, which requires the application not so much of quantitative as of qualitative systemic analysis — this theory simply withdraws, declaring unscientific everything that cannot be depicted and verified "rigorously" (that is, in its view, by means of a model that is mathematically precise, however far removed from reality).
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