What is ‘Economics*’?: A Primer (for the Uninitiated)
By Rajani Kanth
No, IT is not about the real economy.
Not even remotely.
It was (still is), Firstly, a Policy Project: dating back to the era of Adam Smith, and continuing on, as so-called ‘Classical Economics’, through Ricardian times, in the Nineteenth Century.
With an interlude/interregnum, caused by many factors, not least the part-apostasy of JS Mill, Stanley Jevons picked up the same baton, steering it into what is now termed ‘Neo-Classical’ Economics.
Stated succinctly, ‘Economics’ was simply a formal, often elegant, way of demonstrating the Merits of Laissez-faire: i.e., to leave the real economy unfettered by any negative intervention, by any force, so that capital-owning classes are left free to make all ‘business’ decisions, as/when it suited them.
That’s how it began: that’s how it (largely) functions still.
This ploy is sometimes defended by the suggestion that rational capitalists , at this early stage of nascent capitalism, faced unmerited ‘intervention’ by ‘irrational’ or ‘non-rational’ landed aristocrats – and their allies.
Now, this was true in part, in the sense that landed owners, living off rents, didn’t always see eye to eye with factory-owners living off profits: and had their own vision of ‘public purpose’, and the ‘public interest’.
But there is no obvious ‘wertfrei’ reason why economics , qua science, should support the will of the profiteers as against rentiers.
Pre-Capitalist societies were run in favor of Landlords, much as Capitalist societies, now, are run in favor of Capitalists.
We ‘accept’ the latter society as ‘normal’ today, for being habituated to this mode.
But, from another (laborer) point of view, both classes could be considered parasites, of a sort.
So, Economics, as a Game, was a rigged game, from the start.
But a Second Project (dear to the heart of our very own Neo-Libs today), increasingly, took precedence, over the First Project, since/after Jevons
This was – through a detailed specification of what is now termed ‘Micro-Economics’ (ME) by economists- to legislate/inculcate appropriate behaviors/expectations on the part of the 3 Prime Actors in the Economic Drama: i.e., entrepreneurs, workers, and consumers.
There is, btw, not one single empirical fact to be found in a conventional ME text: it is a series of axiomatic truisms/tautologies presented as universal ‘science’, all derived by making ‘appropriate’ – but not culture-free- ‘assumptions’.
Change the assumptions, and you can turn all of ME upside down.
But then – there goes your shot at a Nobel, as well.
Mark what I am saying: a Buddhist qua Buddhist could not pass a Micro exam.
S/he must reach for the higher indifference curve, or fail the test (for, more is better, remember?: yes, this cosy Pig Principle squats at the very base of Anglo-Norman political economy that rules the world today).
Now, as it happens, few workers, consumers, or even capitalists, ever live up to the demands of this pseudo ‘theory’.
But It doesn’t matter: for that is not its purpose.
Its purpose is to uphold and validate amoral, acquisitive, asocial, individuals as the preferred genre of ‘rational’ activists in the (new) economic game, commenced in Post-Enlightenment Europe.
In my language Economics (ME) is the (coded) Instruction Manual for EuroModernism.
That is why it fetches a obel award, nlike Anthropology, e.g., which, any day of the week, is far more factual, useful, and informative.
Samuel Smiles and Harriet Martineau (mid-Nineteenth century), amongst many others, touted this nouvelle propaganda in nursery pap distributed far and wide across the Brit Empire, with the Economist as the new Hero of the Modernist Opera.
And we buy it still: despite the clearly visible toxic impact of its noxious nostrums on society.
Now you know why Economists make such indefeasibly lousy ‘predictions’, when they move from their nether world to the real world (the few that venture out, that is).
Theirs is NO science: it’s pure guff.
In fact, any run of the mill Gujarati (or Jewish, or Lebanese) trader from Antiquity (wherein these three named groups dominated global trade) would have been familiar with this ONE LAW of Economics (of Supply and Demand), long before Late Europeans wrote their ponderous treatise/tomes on the subject.
And virtually all other so-called ‘laws’ of economics (real or spurious) are but spin-offs, of that basic idea.
So, why waste time studying ‘economics’, unless it is to win that Nobel (granted, there is a decent career in it, for many where, via the idiotic use of gratuitous mathematics, one can appear highly learned whilst (re)stating the most trite, and platitudinous, propositions in inscrutable symbols)?
With a BA in Eng. Lit. you can still run a Bank, or even an MNC, successfully: I know the Prez of a Bank, and a Corporate CEO, with but that one credential – and they both thrive.
You get the picture: (mainstream) economics is neither a necessary nor a sufficient condition to understand the lay workings of the real economy.
In fact, au contraire, it can be the exact opposite: a veritable barrier to understanding it.
Princes and lay civil servants, have similarly, ‘managed’ the macro-economy no worse than our ivy-stained (!) economic experts.
Possibly, you get it?
Economics is about Economics: no more, no less.
But, I may be overstating matters a bit (though a rather famous Cambridge economist, whom few reference today, Joan Robinson, had said much the same, 60+ years ago).
For there is one thing you can do with economics.
If you wish to fool all the people all the time – and I’ll let you guess who are deep into that tawdry enterprise – there is absolutely no better language invented/available today.
It’s the ultimate con.
So, let me close by coining a new adage for our times.
There is bluff, there is bluster: and then there is – you guessed it –Economics.
*btw My Comments, in this Note, pertain to mainstream economics.
R E F E R E N C E S
Kanth, Rajani. Political Economy and Laissez-Faire, NJ: Rowman and Littlefield, 1986
____________ Against Economics: Rethinking Political Economy, London: Avebury, 1997
____________ Farewell to Modernism, NY: Peter Lang, 2017