ABSTRACT
As argued in the Introduction, proffering checklists of supposed key identifying features of capitalism is a woefully inadequate way of making a case for either the existence or passing of capitalism in history as the way in which human beings organize their economic affairs. Rather, as will become increasingly evident with the progression of this volume, to capture the complex and very peculiar modus operandi of capitalism demands theoretical exegesis adequate to the task. To reiterate what was said in the introductory chapter, the hope of authors of books such as this is that they will make their way into the hands of the broadest spectrum of readership. It is with some trepidation therefore that I alert those beginning the journey through this book’s pages to the fact that the discussion to be unfolded in this chapter and part of the following one does contain elements of complexity given the necessarily abstract tenor of the argument: Though every attempt is made here to present the subject matter in an accessible fashion as possible. To readers steeped in a particular tradition of economic thought, Right or Left, it is asked that you focus upon the logic of the argument and not seek refuge in well worn categories to gloss over the new ideas being put forward here. For the reader not well acquainted with esoteric debates in economics follow each of the steps in the discussion carefully. It is our hope that one day these ideas will become those most widely disseminated in both classrooms and society at large. The payoff for all will be novel insights into the economic physiognomy of the world we live in which will then provide us with a vantage point for creative thinking about ways to improve the material economic lot of humanity. Addressing thorny empirical questions of the historical ascendancy of capital, including possibly confirming when capitalism actually becomes the preeminent mode of economy, is a topic for later chapters. However, for the discussion at hand, it is instructive to note that, already by the late sixteenth and early seventeenth century, European intellectual commentators were pointing to a new found predictability in human economic life, increasingly ensnared as it was in market and trading activity, and commenced heated debate over the impact such a transformation would have on politics (Hirschman, 1977). What is particularly interesting about this commentary is the fact that, as studies by economic historian Karl Polanyi demonstrate, in societies antedating capitalism, to even think
about the economy as an entity distinct or dis-embedded from other sets of social relations – thaumaturgy, religion, culture, ideology, politics, and so forth – was inconceivable. And, indeed, grappling theoretically with this historically unique and peculiar characteristic of capitalism has been one of the most abiding problems for modern social science as a whole. Unfortunately, what may be referred to as mainstream economic theory is not particularly helpful in this regard. Early, or classical, mainstream economic theory (political economy as it was known), often associated with the work of the Scottish economist Adam Smith, began on the right track with a research agenda seeking to explain the novel upsurge in production of wealth under capitalism. Smith, himself, however, offered a teleological argument holding that capitalist wealth creation springs from an innate human propensity to “truck and barter” which increasingly bears fruit to the extent the division of labor in society becomes more complex through the growth of markets and trade. True, Smith’s well known descriptive term for market operations as guided by an “invisible hand” implicitly recognizes the above noted dis-embeddedness of economic from other sets of social relations but, given Smith’s ideological affinity with the rising bourgeois class and his overriding concern with the technical applicability of his theory in support of laissez-faire policies, the bulk of his work tends to evade questions of theorizing the historical uniqueness of capitalism. With the supplanting within mainstream economic theory of classical political economy by neoclassical economics, a move largely completed by the beginning of the twentieth century, there remains not even the most perfunctory interest in questions of capitalism’s historicity. A primary reason for this is that neoclassical economics switches the very course of mainstream economics from concern with the production of wealth to the narrowest focus upon the distribution of resources among competing ends (Dasgupta, 1987). At the core of the neoclassical concentration upon distribution is its theory of relative prices and investigations into the way market forces of supply and demand purportedly realize an “optimal” allocation of resources in a static equilibrium. This intellectual trajectory of mainstream economics away from concern with the modalities of production to a highly delimited focus upon distribution reaches its zenith in the post-1950’s period with the “formalist revolution” in neoclassical economics which transforms even the question of equilibrium in a real economy into “a mathematical problem about a virtual economy” (Blaug, 2003, 147-8). This gradational transposition within mainstream economics of economic problems per se into mathematical ones is paralleled by another conceptual move that further eviscerates the historicity and peculiarity of capitalism from economic debate: This involves what Polanyi dubs the “economistic fallacy” (1977, 10ff.). Quite simply, this fallacy refers to the dual senses in which the term economic is used and how one notion of economics currently substitutes for both. We, of course, in common parlance, talk about “economic interests” as those relating to our needs as human beings for material sustenance and its provisioning. Put differently, the foregoing amounts to little more than the recognition that economic life is a necessary feature of all human societies in history. Neoclassical eco-
nomics – dominating economic discourse in Anglo academies as well as in Western popular press – which in fact studies the capitalist, or in its own terms, “market economy”, refers to its field as “economics” and the economic interests of human beings as “rational” in a fashion that does not distinguish between the particular modalities of material existence and expression of economic interests holding under capitalism, and those existing as the substantive foundation of all human life. And it is the mainstream neoclassical economics substituting of its notion of “economic” for economic per se which in perpetuity forestalls those steeped in its tradition from grappling with the historical peculiarity of capitalism in a way that allows them to genuinely make sense of the world managed by capital or that in which we live today.
