Saturday, May 05, 2018

Neo-Ricardianism: A Marxist Insult

Today is the 200th birthday of Karl Marx.

My favorite school of thought in economics is sometimes called Neo-Ricardianism, instead of Sraffianism. As I understand it, the label "Neo-Ricardianism" was invented in 1974, as an insult, by Bob Rowthorn. Basically, he claimed to more closely follow Marx, and claimed that the Neo-Ricardians were, like neoclassicals, bourgeois economists. Other Marxist economists at the time offered arguments along the same lines. Franklin Roosevelt III, for example, did not use the label "Neo-Ricardian", but rather described Sraffians as in the grip of commodity fetishism.

(This Roosevelt is the grandson of FDR, the United States president. According to Wikipedia, he is a Du Pont on his mother's side, and therefore a descendant of the famous physiocrat. I've also recently read one in the series of Elliot Roosevelt's mystery novels, in which his mother Eleanor is the detective.)

One aspect of the Marxist argument against Sraffians harkens back to J. S. Mill. The claim is that, in Mill, production is taken as a matter of natural law, while distribution is a matter of social laws that can be freely changed, if we collectively decide so, perhaps through government. According to Marxists, production and distribution cannot be separated like that. You can see why this might be described as commodity fetishism, in which social relations are taken as natural relations.

This argument also provides a context for understanding some chapters in Steedman (1977). Sraffa, for some purposes - e.g., internal criticism of neoclassical economics - takes quantity relations as given, while considering what prices would be if some distributive variable were at a different level. But, Steedman argues, that, in principle, one can relax what is taken as given. The length of the working day or the intensity with which laborers work might be varied in the analysis. This is not just a matter of, say, increasing all inputs in a production process by some proportion. You would want to consider how fuel, oil, or other elements of working capital vary with output, how output varies with concrete production processes, and whether or not these variations have an impact of the efficiency on machinery of various ages. I suppose I ought to also mention Steedman's polemics, especially his labeling of some anti-Sraffa Marxists as "obscurantists".

Of course, many arguments have been developed on both sides over the nearly half-century since these charges and counter-charges were first offered. Does Sraffa provide a constructive alternative, as well as an internal criticism of neoclassical economics? Do Sraffian interpretations of classical economics hold up as history? How do issues of money enter? Is Sraffian economics confined to logical - not historical - time? How do market prices relate to prices of production? And what does this all have to do with Marx?

Another famous adoption of "Neo-Ricardism" as an insulting label for Sraffianism comes shortly later from Frank Hahn, who was no Marxist.

References
  • Frank Hahn (1982). The Neo-Ricardians, Cambridge Journal of Economics, V. 6, iss. 4: 353-374.
  • Frank Roosevelt (1975). Cambridge economics as commodity fetishism. Review of Radical Political Economics, V. 7, no. 4. (Reprinted in Growth, Profits, and Property: Essays in the revival of political economy, (ed. by E. J. Nell) Cambridge University Press, 1980.)
  • Bob Rowthorn (1974). Neo-Classicism, Neo-Ricardianism, and Marxism. New Left Review
  • Ian Steedman (1981, first edition 1977). Marx After Sraffa, Verso.

4 comments:

Anonymous said...

"The claim is that, in Mill, production is taken as a matter of natural law, while distribution is a matter of social laws that can be freely changed, if we collectively decide so, perhaps through government. According to Marxists, production and distribution cannot be separated like that."

I wonder how many of these self-proclaimed Marxists also argued, like Trotsky, that the distribution of the product under Stalinism was "bourgeois" while the means to produce said product were "socialist"?

Obviously, as a Marxist he should have concluded if the bureaucracy appropriated surplus value from the Soviet proletariat, then the regime was state-capitalist in nature. But as a creater of that regime -- along with Lenin -- he could hardly do that...

It is unfortunate that Marx lumbered socialism with a vision of socialism which is hard to differentiate from state-capitalism. Unlike the libertarian socialist tradiion, which stressed the need for workers management of production since 1840.

Still, Marx did help our understanding of capitalism significantly -- even if he refused to acknowledge his debt to the likes of Proudhon (worse, distorted his ideas shamefully).

Iain
An Anarchist FAQ
http://www.anarchistfaq.org

Sturai said...

Bravo. Even more delightful than http://people.ds.cam.ac.uk/mgh37/sraffa.pdf

Sturai said...

This article by Kurz and Gerkhe sets a new perspective on Sraffa as a marxist.
https://www.tandfonline.com/doi/full/10.1080/09538259.2018.1442783

Robert Vienneau said...

Thanks for the comments.

For readers, here are clickable links: anarchist FAQ, Hayes on Sraffa, Kurz and Gerkhe. I thought that, even if he was not initially enthused by the labor theory of value, Sraffa started from Marx's schemes of reproduction. Kurz and Gerkhe argue otherwise.