The Philosophy of Economics Today:

by Gary Tedman


As if it were in retreat but wanted to deny it, after the encroachment of Marxism and Freudianism on what it felt was its own hallowed territory, yet embarrassed by its Idealist past and wanting the fruits of the new materialism into the bargain, academia produced Analytic Philosophy to carry its contemporary positivist message. Inward looking navel gazing was the new emperor’s clothes, and a love for looking at the wood rather than the forest. The mechanisms of philosophy were to be examined in their 'purity', in the guise of logic and language, bereft of those awkward problem areas, such as politics and the passions, which hitherto had, on reflection they felt, sullied their most special realm. Here they surely must be on a stronger footing. This territory belonged to them by rights, for centuries it was at the centre of their endeavour. It did not matter that logic and language alone could not furnish meaning or understanding by themselves, in fact this was to be considered an added bonus, and something to be aimed for as a high achievement.

They would partner science’s groom with this suitable bride, able to fulfil all the duties it could possibly require, especially that of denying meaningfulness to anything that might be considered dangerous to the powers that be, while simultaneously allowing any affirmative meaning to accrue to whatever was deemed subservient to the political ideology of the day.

Such a flexible philosophy, such a denegated position, would be perfectly suitable for today’s human subject, the ‘virtualised’ individual, the flexible worker who can have his education downloaded by a mobile phone, who has all the information, the ‘data’ at his fingertips, ready to leap into whatever assignment that calls. And it would also be perfect for the new stock market, for the ever expanding economy, for world of eternal ‘growth’, for the standards of unquestioned confidence in confidence as the root of all goodness, for total moral relativism, for global competition, for the free and flexible market in every sphere of human activity, and for the ‘services based economy’ in a universe that must correspond to computer models. - My god, it a ‘services based philosophy’!

And so it came to pass that positivist Analytic Philosophy triumphed in academia, and this must at all costs keep at bay the inroads of Marx and Freud. It reached its apotheosis recently, when it lurked behind the Neo-Liberal ideology of globalism as, it has to be said, a very grey eminence, shamefaced and unaccountable. The apotheosis of this ideology thus came just before its most severe debunking. Yet still, like the bankers who have not quite run off (though a few have tried) with the money and awarded themselves with even bigger bonuses after being bailed out, there is nobody to admonish the Philosophical scoundrels. They still lurk in back of the stage, not too quietly, but quieter than the bankers, as is their habit.

What are we to think? We are, in a sense, on the outside of this argument looking in. We wonder what the deeper reasons are, why the ‘powers that be’ and the ‘pundits that be’ failed so utterly miserably to see the crisis coming and do anything about it. But just as official philosophy is ‘hands-off’ the realms of Big Meaning, so mainstream politics is ‘hands-off’ the Big Economy. In tandem they represent the wilful abdication of control and which is therefore also an abdication of their responsibility. In all the attempts to officially analyse the failures of the main players in the crisis we thus find the same feeble and impossible to believe excuse: “we didn’t know what was going on”. Lack of understanding is thus now an extolled virtue, meriting giant financial rewards, but such rewards are glossed as if it were a case of mere technical feedback.

The logic of the market can hardly be backed by the actual logic of Analytic Philosophy, especially not now, when we see that the rewards are enormous for failure, and we see the reality of the crisis unfold, and its miseries, unless the logic is only formal and has nothing to do with life, and unless the logic is able to make moral hazard its secret god. And this is indeed the case.

This Philosophy is not, apparently, concerned anymore with life; it is concerned with science. But its science is also not understood as concerned with life, except perhaps externally, as ‘behaviour’. But what science is not concerned with life? In the end this Philosophy undercuts its own base and rationale; it fades away as something irrelevant, as something only determined by this historical period, as a contingent factor of its political expediency, exactly what it supposed it sought to avoid in the first place. It did not want to be a ‘mere ideology’ like it caricatured Marx’s theory, it wanted to be the modest truth, that was all, but now Marx is seen again to be the real provider of this modest truth, we are back at crisis, and the Philosophers are the ideologists again.

Marxism was always at risk of having its philosophical edges muddied by empiricism, or vulgar materialism as Lenin called it. This was not just true in the annals of official Philosophy, where we might expect it, but in areas like art practice too, where ‘realism’, once a progressive movement, degenerated into a kind of aesthetic behaviourism, a voyeuristic fascination with the external. There is a whole industry bent, today, on continuing to muddy the Marxist waters with pseudo versions of Marxism of this nature. The ‘good’ Marx becomes analytic, and we find we are meant to ignore his politics; for he is a ‘scientist’ now. Marx had his rational system and it is not impossible to look at his work from the point of view of its formalism. Indeed, this is a necessity sometimes (Althusser). Analytic Philosophy and Positivism has, however, made this its sole virtue, if they are the official saints of the new religion (as Comte envisaged), these are its catechisms: its logic, its ‘data’, its unflinching obsession with detail, a passionless quest for validity in ‘correct’ language and its essentializing of ‘grammar’ even, contradictorily, against actual linguistic science and Chomsky. So the very point where it apparently tries hardest to grasp science, science ‘in its essence’, is where it most completely loses touch with it. Like its offspring behaviourism, it only reaches a superficial depth in its idea of depth, it deliberately limits itself, or you might say it willingly puts on blinkers for its masters, lest it let slip a few meanings that might have more than a topical value.

All such meanings are meant to be suspect, which leads to today’s quotidian principles of ‘political correctness’, an ideological panacea for all seasons, a super liberal but scathingly dictatorial “thou shalt” completely rigid in its total flexibility in whatever situation the ‘great and good’ find themselves, flexible because it is contentless. It is not that analytic philosophy has not had its political moments. Bertrand Russell for example; and it is not that it does not produce some good work, some knowledge; it would be more surprising if all this energy and expenditure and swallowing up of talent gave birth to nothing.

But, we are entitled to be angry with it, and especially in these days of extremity. Today it sits behind the arguments of bankers, of speculators automatic deals and the ‘solutions’ of IT departments, the rationale of call centres and computer mailshots; it is behind the endless rhetoric of technocratic instrumentalism, the loss of discretion and passion and, in a way, that old fashioned humanism that at least had humanitarianism sitting next to it.

Maybe the latter was just the result of embarrassment, though. Today’s hard nosed, dullard, vacuous attitude, picked up from the right wing capitalists, has lost that. The new figures for the vast gap between rich and poor are almost unbelievable, they are gross, yet there is hardly a bat of an eyelid. What has Philosophy got to say about that? Clearly very little, it is not its territory; of those things it has basically washed its hands.

What, therefore, can the academies offer us about the crisis? - The economic one, the moral one, the political one, the pedagogic one? A deafening silence, that is about all. There are a few glimmers of hope in that there is some small recognition, for example in economics after the dramatic failure to predict the crisis , that all is not working properly. To quote an extract from ‘The Financial Crisis and the Systemic Failure of Academic Economics’ (from ‘Modeling of Financial Markets’ at the 98th Dahlem Workshop, 2008), which is worth a read:

“The global financial crisis has revealed the need to rethink fundamentally how financial systems are regulated. It has also made clear a systemic failure of the economics profession. Over the past three decades, economists have largely developed and come to rely on models that disregard key factors—including heterogeneity of decision rules, revisions of forecasting strategies, and changes in the social context—that drive outcomes in asset and other markets. It is obvious, even to the casual observer that these models fail to account for the actual evolution of the real-world economy. Moreover, the current academic agenda has largely crowded out research on the inherent causes of financial crises. There has also been little exploration of early indicators of system crisis and potential ways to prevent this malady from developing. In fact, if one browses through the academic macroeconomics and finance literature, “systemic crisis” appears like an otherworldly event that is absent from economic models. Most models, by design, offer no immediate handle on how to think about or deal with this recurring phenomenon.2 In our hour of greatest need, societies around the world are left to grope in the dark without a theory. That, to us, is a systemic failure of the economics profession.”

[Source: http://www.debtdeflation.com/blogs/wp-content/uploads/papers/Dahlem_Report_EconCrisis021809.pdf]

You would think from this we were in for some results, a breath of fresh academic air perhaps. Yet this effort unfortunately seems to be doomed before it is even begun because the task is understood already as fundamentally one of a ‘lack of communication’ of the difficulties they face (and have faced) and the limitations of the science, rather than anything inherent to their method; in other words it is seen as essentially a marketing problem! It is not our fault, they want to suggest, it is the media, the press, and so on, they all expect too much from us, they whine like the bankers: “…we may be the gods of today, but this doesn't mean all the problems should be placed at the foot of our doors, we cannot be held responsible”, “It is not the fault of our Economics, it is not the fault of our Philosophy, it is…”, they hurriedly look around for someone on which to pin the blame and see everyone looking back at them, for the moment they are waiting to see if there will be an answer dawning in their consciousness….

Naturally, in this text there is absolutely no mention of Marx. Are we surprised? - Of course not. Even in an essay which wants to address the question why ‘boom and bust’ has not been taken into account in the most up-to-date macroeconomic (etc., etc) economic models, Karl Marx is not mentioned. When you wear your philosophical blinkers so prominently we guess they must be very proud of them, or are they simply too afraid to grasp the nettle, even in amongst all this 'nettle grasping' that is supposed to be going on in the name of ‘getting real’? It would be hilarious if it were not so serious. But it is serious.