It seems obvious to say, for a leftist, but the strange reality of the current confusion over economy at a time of crisis is that the capitalist paradigm has been a smashing success–of ideology. In the contretemps between Sanders and Krugman one was struck by the way that assumptions about economy confuse even critics. That the whole foundation of neo-classical economics is pseudo-science should have led long since to a powerful challenge to the reigning ideology. It has, in fact, and yet… This was just the whole point of classic marxism, but somehow a new set of theories came into being, Marx’s mostly, that were set against their capitalist equivalents. But the whole game backfired. We should start over with a clearer sense that theories of economics are confusing us, and that the way beyond them is not an alternate set of theories, but a practical system of replacement. Marxists fail to see that their long challenged marxist theories tend to re-validate capitalist views.
Let’s reiterate the simple point: the foundations of mathematical neo-classical economics are bogus and generate a pseudo-science. That ace up the sleeve should have long since proven effective in creating a challenge. But it hasn’t done so, why?
That means among many other things that while we might sense the effectiveness of markets in practice we have no theory to really prove that, and certainly no theory to override the clear, increasingly stark, empirical evidence that markets have a dark side, to say the least. It is the perception of the latter that is constantly scotched by the citation of the ‘theory’ to assure us markets are justified, in theory. The reality is that we cannot arrive at a theoretical foundation in any direction, a point the Krugman’s, so brilliant in the theory, seem unable to understand.