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A Reply to "Anarchist Economics, Marxist Economics, and Pareconist Economics."

category international | economy | debate author Saturday July 07, 2012 03:04author by Robin Hahnel Report this post to the editors

Robin Hahnel's response to Wayne Price's article "Anarchist Economics, Marxist Economics, and Pareconist Economics".


A Reply to "Anarchist Economics, Marxist Economics, and Pareconist Economics." In his review of three essays by supporters of “participatory economics” published in The Accumulation of Freedom: Writings on Anarchist Economics Wayne Price distinguishes between the nature of capitalism, how best to go about overthrowing capitalism, and how best to organize a desirable post-capitalist economy. On the third issue – other than some methodological quibbling -- he offers no substantive criticism of the model of a “participatory economy” originally developed by Michael Albert and myself. One can even read his own essay on that subject in The Accumulation of Freedom as mildly complimentary toward our attempt to make the left libertarian alternative to capitalism more concrete and therefore more compelling. Price is correct, however, that we disagree about the nature of capitalism as well as what we are going to have to do to overthrow it.

Price offers no argument in favor of a “Marxist” analysis of capitalism – including the assertion that there is a long run tendency for the rate of profit to fall in capitalism, leading to crises -- as compared to a “liberal Keynesian” or “Sraffian” analysis of capitalism – which does not subscribe to any such tendency. He merely cites the work of Marxists Brenner, Foster, Magdoff, Kliman, and Mattick approvingly, and disparages the work of Keynes and Sraffa without argument. Since he offers no argument for the Marxist analysis, or against what Keynes or Sraffa had to say, there is nothing for me to rebut. I can confirm that I know the work of the Marxists Price cites approvingly and believe their analysis of capitalism to be flawed and misleading. That is one reason I do not call myself a Marxist economist.

Price is wrong when he says: “Since the Pareconists reject Marx’s labor theory of value and the analysis which follows from it, they have no theory of where profit comes from.” I do not call myself a “Pareconist” because I think it is a poor choice of a word to describe oneself. However, just because I reject Marx’s labor theory of value does not mean I have no theory of exploitation and where profits come from. Any interested in a non-Marxist theory of exploitation should read my: “Exploitation: A Modern Approach” published in the Review of Radical Political Economics (38, 2), Spring 2006: 175-192.

Price quotes Andrew Kliman to the effect that my refutation of the tendency for the rate of profit to fall published in The ABCs of Political Economy (Pluto, 2002) makes the mistake of using a model that assumes that prices stay the same after a technical change is introduced. That is also incorrect. Prices do change when new technologies are introduced in the model I use -- as my model demonstrates they must. It is Kliman who makes the elementary mistake of confusing relative prices with absolute prices in economic models.

Regarding what will be necessary to cut the albatross of capitalism from around our necks, Price and I also disagree. As best I can tell he proposes a program that is no different from the programs of libertarian Marxists and anarchists in the early twentieth century. It didn’t work then, and it is even more out of date and less likely to work now. What is called for instead is creative new thinking about political strategy. Unfortunately, in that area Price offers nothing but same-old, same-old.

Robin Hahnel

The Wayne Price article "Anarchist Economics, Marxist Economics, and Pareconist Economics" is available here:

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author by Wayne Pricepublication date Tue Jul 10, 2012 10:12Report this post to the editors

Robin Hahnel is correct that my current essay does not talk about "how best to organize a desirable post-capitalist economy." It said so. And it did not criticize "the model of a 'participatory economy' " which he and Michael Albert had first developed, and that I have been "mildly complimentaryi" about their effort to develop this model. Our disagreement, as he writes (and I had explained) is "about the nature of capitalism as well as what we are going to have to do to overthrow it."

He is alsi right that, in my brief essay, I did not go into detail about my disagreements with his analysis. I did state that he ignores the long term slowdown of the world capitalist economy from about 1970 onward, as the real background to the Great Recession and the continuing problems of capitalilsm, for which I gave a bunch of references for people to look at if they want further information.

I did claim that he has no real theory of where profit comes from (except that more useful things are made) or what exploitation consists of (except an imbalance in power between the workers and capitalists). I am basing this both on the essay I reviewed, on Spannos' essay which I was reviewing, and on Hahnel's book, The ABCs of Political Economy.

He states that I get from Kliman that he holds prices constant in the model by which he attempts to disprove the tendency toward a falling rate of profit. This is not true. I had noted that Kliman had made this criticism of those who make this argument (such as Okisho) and that Hahnel made this same exact error in his book, The ABCs (on page 124).

Hahnel criticizes me for raising the same old tired program which was raised by revolutionary libertarian socialists in the past. To a degree, this is true. We still live in capitalism, despite all its changes, and certain fundamental things remain true. But Hahnel argues that this approach did not succeed in the past and (therefore) will not work now. Instead we need "creative new thinking abut political strategy." But my criticism of his approach was not that it was too new and creative. It was that his program was the same old liberal/social democratic program which liberals such as Krugman and The Nation are arguing for right now and have argued for for a hundred years or so. And the same goes for Michael Albert's reformist program, which I discussed. The issue between us is not "old thinking vs. new thinking" but "revolutionary program" vs. "reformism."

author by Waynepublication date Wed Jul 11, 2012 00:37Report this post to the editors

For people who want further information about what Hahnel means by "creative new thinking" and my views on his ideas, see my review of his book on political and economic programs, Economic Justice and Democracy.

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