THE DISCUSSION SPARKED BY PIKETTY CONTINUES

As I had hoped, my lengthy review of Piketty has sparked a vigorous and interesting series of comments on this blog.  I am going to spend a good deal of today expanding on my discussion and responding to some of the comments [since it is pouring here, so no early morning walk today.]  Let me start with Chris's reaction to my plaintive comment about one of Piketty's footnotes.  Here, in part, is what Chris said:

 

"In regards to:   "Page 600 -- note 33 Why is Piketty always so careful to speak disparagingly of Marx?"
What is your assessment of this claim in regards to ALL economists and (many) philosophers? Nearly ALL economists go out of their way to refute Marx and yet it's always clear that those same thinkers simply haven't bothered to read him at even a cursory level. For instance, the NYTimes had an op-ed series a few weeks back on Marx, and it was crystal clear all but one author had [not?] actually read Marx. Along with Kenneth Rogoff's recent article in Project Syndicate. I mean these are people with degrees from Ivy League schools, so it's not as if Marx is beyond their reading comprehension, but for some reason people in general feel totally comfortable with speaking about something they haven't done the slightest investigation into. Yet you'd never see an op-ed piece on: "was Einstein right to worry about quantum mechanics", covered by people who had no knowledge of the subject...."

 

This is a large and [at least to me] very interesting question.  The cheap and easy response is that all these folks are bought and paid for flacks for capitalism and feel no need to take seriously anyone who calls that commitment into question.  And of course, cheap and easy responses are very often right [as are superficial conspiracy theories -- bad people really do get together in back rooms and plot bad things.]  So let us agree that some of the professional economists who dismiss Marx without ever having studied what he had to say are really just mouthpieces for capitalism.  But I honestly do not think that is true in any simple way of a great many quite intellectually brilliant economists, a number of whom have rather progressive politics.  So what more is going on?

Let us start where it all began, in the decade after Das Kapital was published.  The 1870's saw a transformation in mainstream economic theory, led by the work, more or less simultaneously, of Carl Menger in Austria [born in Germany], Léon Walras in France, and William Stanley Jevons in England.  Their so-called Triple Revolution quickly replaced the classical political economy of Adam Smith and David Ricardo [and Karl Marx] with the marginalist analysis that dominates academic economics to the present day.  There are two important things to understand about this Triple Revolution:  First, it was mathematically much more sophisticated than anything that had been done before in the field, and its sheer intellectual beauty and fecundity [spinning off new research questions and possibilities for further sophistication] was mesmerizing to professional economists.  Second, it completely changed the questions that economists asked.  The old Political Economy had been concerned first and foremost with growth and distribution -- what were the factors that promoted or stymied economic growth? and How did the annual social product get divided among the three great classes of society -- entrepreneurs, workers, and landowners?  The new economic theories gave beautiful, elegant answers to an entirely different set of questions:  How are prices determined in a free market?  How does the market guide the allocation of scarce resources with alternative uses?  The questions of the old Political Economy were dangerous questions, because even if one had never heard of the obscure German Karl Marx, it was clear that the well-known and widely read David Ricardo was teaching that the interests of the entrepreneurial class are strictly opposed to the interests of the working class.  Even without any real mathematics at all, Ricardo's conceptual framework made this opposition transparently obvious.  Marx [in my view -- one must always add that caveat when writing about Marx] brought the classical school to completion and transcended it by asking a new set of questions built on his answers to the old ones.  But Marx's questions were, if anything, even more dangerous than Ricardo's.

Marx was not ignored.  Quite to the contrary.  His works were studied and commented on extensively, and of course several world-historical political revolutions were carried out in his name [if not in accord with his teachings.]  But Marx's writings were mathematically unsophisticated [at least superficially -- I will get to that in a moment] -- which made it easy for mainstream academic Professors of Economics to ignore them.  Mind you, they pretty much ignored Smith and Ricardo as well, save in low status optional "History of Economic Thought" courses.  The academic rewards and status more and more went to mathematically sophisticated economists who developed ever more elegant and arcane elaborations of the ideas introduced by Menger, Walras, and Jevons.

A word about the mathematical sophistication of economists.  Modern society suffers from what C. P. Snow, in a famous lecture, called The Two Cultures.  Even most superbly educated people these days are dead ignorant of anything remotely mathematical, and many of the most  raffiné intellectuals are utterly unashamed of their Stone Age grasp of anything formal.  The remainder of the glitterati have, in the immortal words of W. S. Gilbert, "learned up the germs of the transcendental terms" and can actually read a mathematical equation without heart palpitations.  Now, Economics, as an academic discipline, resides in the Faculty of Social and Behavioral Sciences, cheek by jowl with the Humanities and far from the Natural Sciences.  Even though the mathematics used by economists is for the most part undergraduate math [calculus, linear algebra, statistics], in the land of the blind, the one-eyed man is king, and so economists get to lord it over literary critics and historians and even philosophers.

These days, scientists are clearly the academic upper classes.  They do arcane things, use lots of math, get big grants, teach fewer courses, reside in more modern buildings, and have hordes of grant funded grad students to do their bidding [and much of their work.]   The rest of the campus longs to introduce the same sort of mathematical rigor into their disciplines, hoping thereby to pull in grants, cut their teaching loads, and gain some measure of the high status accorded to the natural scientists.  Indeed, if I were given to phrase mongering [which of course I am not], I might suggest that the non-sciences suffer from an advanced case of rigor mortification.

So it is that philosophers splash backwards E's throughout their manuscripts and get a cheap thrill from writing "for all x," while sociologists have stopped reading Weber and Mannheim and Durkheim [all three of them conservatives, by the way], and hand out endless questionnaires to study the contours of surface appearance instead of probing the structures of underlying social reality.

In the period after World War II, three things happened more or less at the same time.  First, in the United States [but not in France, if Piketty is to be believed], academic economists moved into positions of great influence and important as government advisers [the Council of Economic Advisers was established in the U.S. 1946].  Their increased prominence brought with it [in my opinion] enormous pressure to support the dominant interests of capital, which had long exercised powerful influence in the halls of government.  Second, a global struggle developed between the two most powerful empires to emerge from the war, the Soviet Union and the United States.  One of those empires was nominally committed in a quasi-religious way to the memory, if not the teachings, of Karl Marx, with the result that taking Marx seriously in America was tantamount to treason.  The third development, quite surprisingly, is that a number of mathematically sophisticated economic theorists took another look at the classical tradition of Political Economy, including Karl Marx, and very quickly demonstrated that it was capable of being represented by mathematical models as sophisticated, as elegant, and as elaborate as those spawned by the Triple Revolution.   Starting with the publication in 1960 of Piero Sraffa's exquisite little monograph, Production of Commodities by Means of Commodities, a flood of books appeared by mathematical economists around the world -- Michio Morishima in Japan, Andras Brody in Hungary, Luigi Pasinetti in Italy, Abraham-Frois and Berrebi in France.

I began to study Marx seriously in the 1970's, just as this global rediscovery of Marx was taking place.  I swatted up linear algebra, brushed up my calculus, and began plowing through every one of these new interpretations of the classical tradition as they appeared, starting with Sraffa.  In my naiveté, I honestly thought I was getting in on the ground floor of an intellectual revolution that would bring Marx back into the mainstream.  It seemed obvious to me that what was needed was an Introductory Economics textbook that would translate this intellectual ferment into a teachable series of diagrams and models in just the way that Paul Samuelson's magisterial text had done for the neo-classical synthesis.  I knew I did not have what it would take to produce such a work, but I thought my colleagues at UMass, Sam Bowls and Herb Gintis, would do it.  Then, I thought [I really was a child], the panjandrums of academic Economics would have to sit up and take notice, and Marx would enter the curriculum where it mattered, at the Freshman level.

Well, it did not work out that way.  But who knows, Chris?  Maybe CAPITAL in the Twenty -First Century is the Trojan Horse that will be dragged into the walled city and issue from its belly in the stealth of night warriors who will slay the defenders.  I am too old to play Odysseus in this fable, but perhaps there are younger and abler men and women who will carry out the destruction of the walled city of capitalism.