If They’re so Rich, Why Aren’t they Smart?

This paper was originally presented to the 1997 conference of the European Association for Evolutionary Political Economy (EAEPE). In 2008 I published it on SSRN in the light of renewed relevance of its critique of the economics profession, and for the historical record, in the wake of the 2008 financial crash and ensuing Great Recession. After six years of battling the systematic refusal of my fellow-economists to deal scientifically and rationally with Marx’s theories, faced with the evident failure of neoliberalism to resolve (or even recognise) either the domestic problems of the ‘advanced’ economies or the perilous rise in international inequality that it had provoked, in 1997 I drew the conclusion that the problem lay within economics itself, to which I then turned my attention, confident that the TSSI scholarship had resolved the major theoretical issues concerning Marx’s value theory adequately for future generations, should they choose to study them scientifically and with a view to understanding reality. Economics, I argued at the time, had lost its way and has proven itself incapable of reasoning or explaining the world we observe. Increasingly, it plays a religious rather than an explanatory role. The reason for this is the substitution of a dogma – equilibrium, or comparative statics – for scientific enquiry. The article presages subsequent development of the debate, in the course of which the defenders of the equilibrium reading systematically continued to refused to engage with the temporal alternative. The fact that the temporal reading was not accepted, it argues, is evidence of a profound malaise at the heart of economics, to which academic Marxist economics is no exception. The equilibrium paradigm is at the root of what David Colander and his collaborators, following the financial crash of 2008, rightly labelled the ‘systemic failure’ of economics. It is what renders economics impervious, theoretically, to theoretical comprehension of the world around it. In the dock, the paper argued, is not Marx but Marx’s target: the economics profession. This is not just a question for scholars but millions – probably billions – of victims of the market economics of the 20th Century. If the conclusions of this paper are true, then a very powerful weapon is available to these victims, of which they have been deprived for more than eighty years by the neoclassical reading of Marx: Marx’s own ideas.