Economics and the Human Sciences
From anti-modernist dissenters to a human economy; Contents, Preface and Introduction
Preface
Introduction
Part 1. Foucault on economics and history, ethnology, and psychoanalysis in the human sciences
Part 2. One Victorian and seven dissenters from modernism
Alfred Marshall
Thorstein Veblen
V.I. Lenin
Talcott Parsons
J.M. Keynes
Karl Polanyi
Marcel Mauss
Part 3. Manifesto for a human economy
Part 4. Science, the humanities, and popular culture
References
To read further, click on A better world somewhere at the top, select Archive or See All and scroll down.
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Preface
I first refer to the relationship between economics and the human sciences, drawing on Foucault in The Order of Things (1970). I find Foucault’s discussion of history, ethnology, and psychoanalysis to be inspiring-. I then consider seven texts written in the first half of the last century, giving some background on each author:
Max Weber, General Economic History (1922)
Thorstein Veblen, The Theory of Business Enterprise (1904)
V.I. Lenin, The Development of Capitalism in Russia (1899)
Talcott Parsons, The Structure of Social Action (1937)
J.M. Keynes, Essays in Persuasion (1931)
Karl Polanyi, The Great Transformation (1944)
Marcel Mauss, Essay on the Gift (1925)
Each of these individuals, with others of course, launched a branch of knowledge that dissented from professional economics, in order: socio-economic history; institutional economics; neo-Marxism and development economics; economic sociology; macroeconomics; the economic history of world crisis; and economic anthropology. I next summarize, in the form of a manifesto, two decades of the human economy project, just one attempt to move beyond the current impasse. Finally, I consider complementary ways of getting to know ourselves and the world. It has two sections: on organized knowledge, especially the two great principles of our civilization, democracy and science; and the relationship between the humanities and popular culture in my experience.
Introduction
Ronald Coase was an English institutional economist. In his famous paper, ‘The nature of the firm’ (1937), he identified transaction costs as the reason for firms to exist in competitive markets. Much later he won a Nobel prize in economics for that paper. The Chicago free marketeers wrongly thought it supported their side in the ideology wars. Shortly before his death at the age of 102, Coase and Ning Wang announced their intention to found a new journal called Man and the Economy. Coase’s manifesto, 'Saving economics from the economists', was published in the Harvard Business Review. He argued there that:
“The degree to which economics is isolated from the ordinary business of life is extraordinary and unfortunate…In the 20th century economists could afford to write exclusively for one another. At the same time, the field experienced a paradigm shift, gradually identifying itself as a theoretical approach of economization and giving up the real-world economy as its subject matter. This separation of economics from the working economy has severely damaged both the business community and the academic discipline.
“Economics thus becomes a convenient instrument the state uses to manage the economy, rather than a tool the public turns to for enlightenment about how the economy operates. But because it is no longer firmly grounded in systematic empirical investigation of the working of the economy, it is hardly up to the task…
“The reduction of economics to price theory is troubling enough. It is suicidal for the field to slide into a hard science of choice, ignoring the influences of society, history, culture, and politics on the working of the economy. It is time to reengage the severely impoverished field of economics with the economy. Market economies springing up in China, India, Africa, and elsewhere herald unprecedented opportunities for economists to study how the market economy gains its resilience in societies with cultural, institutional, and organizational diversity. But knowledge will come only if economics can be reoriented to the study of man as he is and the economic system as it exists” (Coase and Wang 2021).
If mainstream economics has risen to public prominence, it is because it is the ideological arm of that synthesis of industrial capitalism and nation-states that I call ‘national capitalism’, the aim of managing money and markets in the interest of a citizen body. This system has been unraveling for half a century now since Nixon took the US dollar off the gold standard. Its final demise in our time is one way of understanding the contradictions of the contemporary world. For two decades, with my collaborators, I have been developing the idea and practice of a “human economy”. I wish to explore the obstacles we face through an exercise in intellectual history, especially our need to rethink the organization of knowledge and its divisions—born out of the modernist bureacratic revolution a century or more ago—that are increasingly irrelevant to the world society struggling to emerge now.
Modern education aims to train young people to work and consume in bureaucratic societies driven by machines. Its method is ‘the hose and bucket system’—forget who you are and what you think you know; we will fill you up with what you need to be a productive and passive citizen. This builds on the 18th-century Enlightenment’s commitment to organize knowledge, but without their liberalism and humanism. Around 1800, the German Romantics broke with this approach. If the world is going to hell, why learn to adapt to it? Far better to concentrate on improving what lies between your ears (lifelong self-learning). This may increase each person’s ability to cope creatively with crises they can’t possibly imagine now.
Organized knowledge may be particular while aspiring to generality (the humanities) or universal and practical (science). All academics need to take the coming revolution on board: the word means a break with the past. I mention here some features of ‘modern’ education—we are told that we should deal with the present by dividing it into small bits and becoming a specialist in our bit. This is how our academic disciplines emerged. Chemistry broke off from physics by studying only molecules; physics at my alma mater, Cambridge University, was split into two departments that couldn’t talk to each other—elementary particles and solid-state physics. We have lost the Victorians’ ability to study nature and society together. The natural scientists know nothing of human complexity and the social scientists mimic their methods, but don’t know how the world really works.
The next revolution will break down these divisions by being interdisciplinary, perhaps launching human sciences that study nature, society, history and culture together from different angles. The digital revolution has opened many new possibilities, providing a global network for sharing universal ideas, but it has been hijacked by Big Tech. We must make the most of the formal institutions that are available, but not at the expense of denigrating informal methods of learning. We are each a person with subjectivity who shares the object world with all humanity. The task is to make subject-object relations mutually compatible. Religion once did that and perhaps we need new religions consistent with known scientific laws. Our educational institutions reduce subjectivity to getting the answers right. This denies students access to the meaning of life and human history.
In the last century, universities were committed to supplying fodder to bureaucratic capitalism and broke up knowledge into uncommunicating narrow compartments. As a result, governments are now paralyzed by challenges like global warming. Indeed, for many people, nothing in their politics and education has given them the means of thinking constructively about what to do next. Ours are precarious times, but we can be better prepared. We need to tell ourselves that we are each the most important agent of our own education.