Three Ideas Threatening to Orthodoxy

Neoclassical economics, which remains the prevailing orthodoxy, emerged in the late nineteenth century as apologetics in the context of rising working-class opposition to capitalism. Classical political economy had not provided defenders of the system with a comparable apologetic. Not only had it partly informed Marx’s analysis of capitalism but there were socialist movements drawing on interpretations of Ricardo’s labor theory of value. Class was central to the understanding of capitalism in both classical political economy and Marx, and no attempt had been made to conceal the class antagonisms inherent in the system. The neoclassical economists, with transparent intent, sought to change all this. Ever since, they have worked hard to deny or obfuscate any aspect of capitalism that might be damaging to this apologetic project. Three theoretical insights in the history of economic thought seem particularly relevant in this respect.

Continue reading