Zombie Marx and Modern Economics: or, how I learned to stop worrying and forget the transformation problem

There are two versions of this piece: one, here, a conference paper, and the other in the new edition of Jacobin. The Jacobin piece is shorter and stripped of its academic accessories, and much of the section on the value of money, but it’s not entirely an abridged version – I changed the tone a little, and added a Joan Robinson quote someone reminded me of. I’ve had a lot of responses to this, so a follow-up will hopefully follow.

In 2009, UC Berkeley Economics Professor and former Clinton adviser Brad DeLong took a pot shot at our David Harvey on his blog. Headlined ‘Department of “Huh?”’, and beginning “Why neoclassical economics is an absolutely wonderful thing”, the post quotes 11 straight paragraphs from a Harvey essay, which DeLong proceeds to ridicule.

For DeLong, the essay is contentless waffle. It strings together economic concepts without making an economic argument. He would call it “intellectual masturbation”, he writes, except that it “does not feel good at all”. Only in the eleventh paragraph does he find “the suggestion of a shadow of an argument”. Here Harvey argues that the US stimulus package is bound to fail because the deficit needs to be financed by foreign powers, and the amount of Treasury bonds it will be able to sell to the likes of the Chinese central bank will not fund a big enough stimulus. DeLong responds that this is a question that requires a theory of the bond market and interest rates, which Harvey does not provide: “The question is thus not can government deficit spending be financed… the question is at what interest rate will financial markets finance that deficit spending.” [DeLong, 2009]

[More: Zombie Marx and Modern Economics (pdf)]

Published in: on 17 July, 2011 at 3:29 pm  Comments (1)  

Pessimism of the will

I’ve reviewed Eric Hobsbawm’s How to Change the World in the new issue of Jacobin:

It is a little bright spot at the end of the penultimate, gloomiest chapter of Hobsbawm’s history of Marxism: at least the albatross of “really-existing socialism” might not hang around the neck of the latest generation to turn to Marx. “… [E]ven today only those in their thirties and above have any memory of the actual years of Cold War.” The idea that Marx was “the inspirer of terror and gulag, and communists… essentially defenders of, if not participants in, terror and the KGB” was no more valid than “the thesis that all Christianity must logically and necessarily lead to papal absolutism, or all Darwinism to the glorification of free capitalist competition.” Most “really-existing communists” in the West had been critics of Stalinism since 1956 (yes, says Hobsbawm, who stayed in the British Communist Party into the 1980s, even “by implication” within Moscow-line parties). But the line that socialism meant Stalin and Mao was always an effective rhetorical strategy for anti-communists, always a way to change the subject whenever socialists were in the conversation. As the Soviet Union and the Great Leap Forward recede into history, surely the shadows they cast over the very idea of a post-capitalist society will lighten. […]

Published in: on 16 March, 2011 at 8:07 am  Leave a Comment  

Rundle on Zizek

I’m more of a fan of Guy Rundle than Slavoj Zizek. Now the former has reviewed the latter’s First as Tragedy, Then as Farce. It’s a generally positive review – it’s good as motivational literature apparently – but it makes the following point about a certain brand of philosophical Marxism that has been pretty fashionable these last few years, a point I think is spot on:

The question Žižek perhaps does not face is whether invoking the idea of communism for the relatively unspecified transformation he suggests acts as a form of focus, and a renewal of possibility, or a slaking-off of energy by taking on the glamorous role of spectre, the – hushed tones – ‘communist’. It is not ridicule that is the greatest risk, but an easy resort to an historically given role, which not only refuses to connect to current struggles or movements, but on whose ideal content one is equally silent.

If you start worrying about what you are going to call a movement, before you actually get on with building it, are you firing your guns too early? After all, it is potent movements – from Methodism to Big Bang physics to Marxism itself – which have been named by their enemies, a moment of recognition of their real status. Meanwhile it is the most ephemeral and/or dated movements – Theosophy, Christian Science, fissiparous late Trotskyism – that wasted so much energy arguing over names.


Since the act of self-describing is rhetorical anyway, its only criteria of judgement is whether it gets some sort of effect – or whether it instead rushes to get a dividend from a process of getting people to think otherwise what, at this stage, needs to be more concrete and particular, albeit not fragmented and ungrounded in postmodern fashion.

Published in: on 2 December, 2009 at 7:31 pm  Comments (8)  

The Art of War by Sun Tzu AND The Communist Manifesto by Karl Marx

Dear Amazon.com Customer,

As someone who has purchased or rated books by Karl Marx, you might like to know that The Art of War by Sun Tzu AND The Communist Manifesto by Karl Marx is now available.  You can order yours for just $9.95 by following the link below.

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I’m actually pretty sure I never purchased or rated any books by Karl Marx from Amazon, by the way. But they certainly do make a good argument.

The Art of War by Sun Tzu AND The Communist Manifesto by Karl Marx
Published in: on 9 September, 2009 at 10:10 pm  Comments (3)  


In the eternal struggle between economics and sociology, a savage blow is struck with Problem 2.10, Workouts in Intermediate Microeconomics [7 ed.], by Theodore C. Bergstrom and Hal R. Varian [2006]:

Martha is preparing for exams in economics and sociology. She has time to read 40 pages of economics and 30 pages of sociology. In the same amount of time she could also read 30 pages of economics and 60 pages of sociology.

(a) Assuming that the number of pages per hour that she can read of either subject does not depend on how she allocates her time, how many pages of sociology could she read if she decided to spend all her time on sociology and none on economics? (Hint: You have two points on her budget line, so you should be able to determine the entire line.)

(b) How many pages of economics could she read if she decided to spend all of her time reading economics?

Published in: on 17 April, 2008 at 12:40 pm  Comments (3)  

On the liberal use of artificial ice in the ruling of India

In the context of a discussion of the impact of climate on various races’ fitness to rule:

This may have to be modified a little, but only a little, if F. Galton should prove to be right in thinking that small numbers of a ruling race in a hot country, as for instance the English in India, will be able to sustain their constitutional vigour unimpaired for many generations by a liberal use of artificial ice, or of the cooling effects of the forcible expansion of compressed air. See his Presidential Advice to the Anthropological Institute in 1881.

– Alfred Marshall [1920 – but 1 ed. in 1890], Principles of Economics, 8 ed., p. 603.

Maps and diagrams

My friend Peter gave us Alan Greenspan’s memoir, The Age of Turbulence, as part of our wedding present, and I’ve finally managed to prise it from Raych’s grasp. I’m only a few chapters in, but in the first couple he outlines his development as an economist.

Strikingly, he is an empiricist through and through. He’s at best uninterested and often hostile to theory, especially macroeconomic theory. He developed an early scepticism even about the predictive power of econometrics beyond the short term and the local, though its statistical techniques help to clarify a complex picture. His approach appears to be a brute-force attention to detail. He started with industrial economics, the steel industry in particular (his early work was as a corporate consultant) and built up a picture from there.

In later years I developed some skill in building quite large econometric models, and came to a deeper appreciation of their uses and, especially, their limitations. Modern, dynamic economies do not stay still long enough to allow for an accurate reading of their underlying structures. Early portrait photographers required their subjects to freeze long enough to get a useful picture; if the subject moved, the photo would blur. So too with econometric models. Econometricians use ad hoc adjustments to the formal structure of their models to create reasonable forecasts. In the trade, it’s called add-factoring a model’s equations; the add-factors are often far more important to the forecast than the results of the equations themselves.

If models have so little predictive power, what use are they? The least-heralded advantage of formal models is simply that the exercise of using them ensures that basic rules of national accounting and economic consistency are being applied to a set of assumptions. And models certainly can help maximise the effectiveness of the few parcels of information that can be assumed with certainty. The more specific and data-rich the model, the more effective it will be. I have always argued that an up-to-date set of the most detailed estimates for the latest available quarter is far more useful for forecasting accuracy than a more sophisticated model structure.

At the same time, of course, the structure of a model is quite important to its success. You can’t (or at least I can’t) draw abstract models out of thin air. They have to be inferred from facts. Abstractions do not float around in my mind, untied to real-world observations. They need an anchor. This is why I strive to ferret out every conceivable observation or fact about a happening. The greater the detail, the more representative the abstract model is likely to be of the real world I seek to understand. [p. 36]

This doesn’t surprise me at all. I’ve thought for quite a while that mainstream economics is supported by an exoskeleton of empiricism rather than a backbone of general equilibrium theory. At least the parts that matter. Attacks on a monolithic ‘neoclassical economics’ – conceived as an abstract, ridiculously unrealistic construct – miss the mark, because outside the academy – and even in much of that – this is not how economics is done. Mostly modern economics is about extrapolating data series from past trends, and drawing maps rather than diagrams.

Published in: on 29 March, 2008 at 2:25 pm  Comments (9)  



 What better way to be eased back into blogging than to be tagged by JCD at Fragments for one of these memes?

1. Pick up the nearest book (of at least 123 pages).
2. Open the book to page 123.
3. Find the fifth sentence.
4. Post the next three sentences.
5. Tag five people.

Here goes:

Between the two Queens the favourite waiting-woman stood like the figure-head on a fire-dog; an approving smile might cost her her life.

“How can I be as gay as you after losing the late King, and when I see my son’s kingdom on the eve of a conflagration?”

“Politics do not much concern women,” replied Mary Stuart.

This is from Balzac’s About Catherine de Medici, translated by Clara Bell (1901). The first half of the dialogue is the lady herself, and it’s from a great moment of confrontation between the Queen Mother and the teenage Queen Mary. Irony of course; these two don’t do much besides politics.

It’s a strange book, collecting a novella and two short stories written years apart and set 250 years before most of the Human Comedy. Balzac’s politics shine through: the main point is to vindicate Catherine for the St Bartholemew’s Day Massacre. Not that she wasn’t behind it, but that she should have made it bigger and totally wiped out the Huguenots. In the last story (chronologically, but actually written first) she appears in a dream to Robespierre in the late 1780s and explains that if she had been successful none of this questioning-the-throne business would be taking off. Still, the story works works against Balzac and she seems like quite the bitch.

Alright, I’m supposed to tag five people: How about Maps or Skyler at Reading the Maps; Nate at What in the Hell; Mr iBreed at iBreed; Eric at Recording Surface; and… that may well exhaust the readership of this blog. So, uh, whoever runs that LOLCats site.

Published in: on 18 February, 2008 at 9:12 pm  Comments (2)  

Technological regress

A few months ago I got very excited when I discovered that you could use Google Books to read whole books. Google has permission from a lot of publishers to return from their books a ‘limited preview’ of a few pages around the text you searched for. By typing in a few words from the end of the ‘limited preview’, you could read the next few pages and read your way through until your eyes got sore.

Alas, sometime in the last couple of weeks the loophole seems to have been closed. Google Books now skips pages and won’t keep serving up consecutive pages for long. It was great while it lasted.

For people with access to university library accounts, the web is much bigger. Through a library you can generally search or read almost any periodical you want these days, including decades of back issues.

But now I’ve started to feel that even this charmed world has started to narrow. I’ve developed a sense of entitlement to text, and it has come to greatly annoy me if I can’t read something online – I was aggrieved to discover that the London Review of Books was not available through the Sydney Uni library. Fairfax recently decided to remove access to the Australian Financial Review from Factiva. Now you have to search via its own website and pay to read articles, or pay a prohibitive monthly subscription for online access. This is pretty dire for a major daily newspaper, but possibly a good business decision, since I imagine many businesses will cough up for continued access. It has certainly made me buy it more regularly than I otherwise would.

It’s funny how much effort now goes into disabling the distributive potential of the internet, in order to protect the commodity status of text, music, films, etc. Was there ever a clearer case of the productive forces straining relations of production?

Published in: on 10 July, 2007 at 9:17 pm  Comments (8)  

Robinson Crusoe’s labour shortage


For some reason I started reading Daniel Defoe’s Robinson Crusoe [1719]. It’s one of those stories I thought I had already absorbed by osmosis. Shipwreck, desert island, Man Friday, expository myth for 18th century political economy, etc.

But there’s a lot in there that never made it into the versions we get as kids. For example, the purpose of Crusoe’s ill-fated voyage was cut out of the Pierce Brosnan Disney version¹:

They listened always very attentively to my discourses on these heads, but especially to that part which related to the buying Negroes, which was a trade at that time not only far entered into, but as far as it was, had been carried on by the Assiento’s, or permission of the Kings of Spain and Portugal, and engross’d in the publick, so that few Negroes were brought, and those excessive dear.

It happen’d, being in company with some merchants and planters of my acquaitance, and talking of those things very earnestly, three of them came to me the next morning, and told me they had been musing very much upon what I had discoursed with them of, the last night, and they came to make a secret proposal to me; and after enjoining me secrecy, they told me, that they had a mind to fit out a ship to go to Guinea, that they all had plantations as well as I, and were straiten’d for nothing so much as servants; that as it was a trade that could not be carried on, because they could not publickly sell the Negroes when they came home, so they desired to make but one voyage, to bring the Negroes on shore privately, and divide them among their own plantations; and in a word, the question was, whether I would go their super-cargo in the ship to manage the trading part upon the coast of Guinea? And they offer’d me that I should have my equal share of the Negroes without providing any part of the stock.

This was a fair proposal it must be confess’d…

1. Alright, I confess I haven’t seen the Pierce Brosnan Disney version (yet). I’m just making smug assumptions.


Published in: on 30 May, 2007 at 10:43 pm  Comments (7)