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R48G: neo-classical economics: the emperor has no clothes…

August 13th, 2017 · No Comments

We got the quotes wrong on this and are reposting it corrected…
Not only is political jargon corrupted, but the science of economics is no science at all, left or right…

archive: neo-classical economics: the emperor has no clothes
July 30th, 2017 ·

http://yanisvaroufakis.eu/2013/12/10/confessions-of-an-erratic-marxist-in-the-midst-of-a-repugnant-european-crisis/

The Siriza group is probably in the end social democratic in its focus, but its nonetheless vital to raise the issues of communism in this and any other context of the ongoing crisis.

Yanis Varoufakis the Syriza marxist has a good take on Marx’s theories, something we have discussed in the context of Last and First Men. The discussions of the left wasted a lot of their time with the weak theories of Marx. Marx was a student of classical economics, and yet almost as soon as his classic texts were completed economists were moving to a new world of economic theory, including the marginalist revolution which has served to put discussion of theory beyond the reach of most critics of capitalism, short of embarking on a considerable study of mathematics thence the marginalist theory fantasy world. It is very hard to decipher ideological mathematics, and I think Marx become embroiled in classical models, which were set aside as the profession shifted gears into a new and more elaborate set of sophistries. I think the fact should be faced that models of economic dynamics are not possible using the classical calculus of physics. And yet an immense effort has been put into the attempt. You can play at the game, but the reality is that the causal determinism of classical calculus studying physical bodies doesn’t work. But this world of imaginary science has overtaken the whole field. It would help to realize that the emperor has no clothes here.

Yanis Varoufakis:

Marx’s second error, the one I ascribe to commission, was worse. It was his assumption that truth about capitalism could be discovered in the mathematics of his models (the so-called ‘schemas of reproduction’). This was the worst disservice Marx could have delivered to his own theoretical system. The man who equipped us with human freedom as a first order economic concept; the scholar who elevated radical indeterminacy to its rightful place within political economics; he was the same person who ended up toying around with simplistic algebraic models, in which labour units were, naturally, fully quantified, hoping against hope to evince from these equations some additional insights about capitalism. After his death, Marxist economists wasted long careers indulging a similar type of scholastic mechanism, ending up with what Nietzsche once described as “the pieces of mechanism that have come to grief”. Fully immersed in irrelevant debates on the transformation problem and what to do about it, they eventually became an almost extinct species, as the neoliberal juggernaut crushed all dissent in its path.

How could Marx be so deluded? Why did he not recognise that no truth about capitalism can ever spring out of any mathematical model however brilliant the modeller may be? Did he not have the intellectual tools to realise that capitalist dynamics spring from the unquantifiable part of human labour; i.e. from a variable that can never be well-defined mathematically? Of course he did, since he forged these tools! No, the reason for his error is a little more sinister: just like the vulgar economists that he so brilliantly admonished (and who continue to dominate the Departments of Economics today), he coveted the power that mathematical ‘proof’ afforded him.

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