The evolution of mainstream economics in five political-economic questions — Aabid Firdausi

The trajectory of mainstream economics can be understood in terms of how the discipline historically responded to moments of crises by attempting to “theoretically fix” the understandings related to five core “questions” of capitalist political economy – namely land, trade, labour, state, and legal-institutional framework. This involved legitimising improvements in land that led to the dispossession and the destruction of the commons, justifying free trade based on comparative advantage as opposed to mercantilist state intervention, reducing labour to a factor of production that was supposedly rewarded based on its marginal productivity and hence not being exploited, legitimising state intervention to stabilise capitalism and developing a legal-institutional framework to protect markets from popular democratic pressures. These “theoretical fixes” served to ideologically legitimise, preserve, and perpetuate the core content of capitalist social relations even as it corresponded with the modification of the surface-level appearances of capitalism.

The history of mainstream economics is closely tied to the history of capitalist development. However, the discipline of economics attempts to obscure this relationship, mostly by asserting its value-neutrality through a positivist approach. Despite criticisms, mainstream economics continues to retain its core postulates by reasserting the naturality and inevitability of capitalist social relations by dismissing questions of political economy. The outsized influence of economics in policymaking necessitates consistent critique and engagement with the assumptions and implications of mainstream economic theories and models. There is a wealth of literature that critiques different aspects of mainstream economics from different perspectives (see Chang 2015; Fine and Milonakis 2008; Kvangraven and Kesar 2021; Lee 2009; Mezzadri 2020; Reinert, Ghosh & Kattel 2016; Selwyn 2016). This essay contributes to this rich tradition of critique and argues that the trajectory of mainstream economics can be understood in terms of five core “questions” – namely land, trade, labour, state, and legal-institutional framework....

This is an article on economic sociology that also includes issues relevant to the philosophy (read foundations) of economics.

Firdausi's thesis is similar to the point I have made previously about the methodological assumption of naturalism integral to scientific method is conflated with the ontological/metaphysical, epistemological and ethical assumptions concerning materialism and positivism. This conflation involves both logical fallacies and also involves semantic difficulties with theory and modeling being representative of the actual.

While the methodological assumption of naturalism may be justified in the case of the natural sciences, at least to a great degree, it is less solid in the life and social sciences, which involve organic and psychophysiological processes in addition to mechanistic. In the social sciences, especially, this conflation is unjustified and vitiates theories and models based on it from being representative of reality.

Moreover, the assumption of positivism has been shown to be deficient. The problem is that the sharp dichotomy drawn between fact and value contradicts the findings of cognitive scientists about the enmeshment of thought and feeling at the neurological level and the discovery that that estimation of "reality" is dependent on worldview, which is both individual, cultural and subcultural, leading to the seemingly strange phenomenon of "alternative facts" unless one is aware of the underlying dynamics.

Firdausi argues that these methodological assumptions are shape economics to benefit the interests of capital accumulation resulting in distributional inequality that is justified spuriously.

Developing Economics
The evolution of mainstream economics in five political-economic questions
Aabid Firdausi

See also

The tendency to create the world market is directly given in a concept of capital itself. Every limit appears as a barrier to be overcome…In accord with this tendency, capital drives beyond national barriers and prejudices as much as beyond nature worship, as well as all traditional, confined, complacent…reproductions of old ways of life. It is destructive towards all of this, and constantly revolutionizes it, tearing down all the barriers which hem in the development of the forces of production, the expansion of needs…”

 Karl Marx

Grundrisse: Notebook IV – The Chapter on Capital