There has been a curious debate in the past week within the world of economics blogging. It started with a post by Chris House on the contrast between a “well-known liberal bias” within the academy generally and the decidedly more conservative bent of most members of economics departments. House attributes this contrast to a conservative bias in economic facts – by this he means that much of mainstream economic theory agrees with a more right-wing view of the world. Take, for example, the view that minimum wages lower employment or that government regulation has negative effects on business efficiency. Noah Smith answered this provocation by arguing that the positions taken by most economists are actually closer to the beliefs of the American centre-left, by which he means that much attention is focused on the trade-offs between efficiency and equity. And the debate has moved on from there.
Smith concludes his post by making explicit the key assumption behind both pieces: that there are facts and then there is the ideological perception of those facts – that the facts are in some way neutral, but can conform to one point of view better than another. There is a long line of social theory and philosophy that challenges this assumption of independence. Here, it is tempting to quote Gramsci on ideology, or Foucault on power, or a host of other authors. That would, however, take the conversation into a space completely alien to House and Smith. So nevermind Gramsci, here is mainstream Anglo-American philosopher of science Hilary Putnam on the relation between facts and values:
I argued that the picture of our language in which nothing can be both a fact and value-laden is wholly inadequate and that an enormous amount of our descriptive vocabulary is and has to be ‘entangled’… for example, to draw the distinction between courageous behaviour and behaviour that is merely rash or fool-hardy…depends precisely on being able to acquire a particular evaluative point of view. ‘Valuation’ and ‘description’ are interdependent.
Replace “courageous” with “optimal” and “rash” with “profit-maximizing” above to get a flavour of what this means for economics. Or consider the supposedly descriptive term, “unemployed”, a negative term that helps naturalize participation in value production for another as the default human economic activity. Facts are already not neutral and implicitly already include an evaluative bias; this before they are confronted with an external evaluative position to which they either correspond or they don’t, as House and Smith would have it. That facts are not value-free is not an unpopular claim in the philosophy of science. Bias is not external to science – something brought in by the scientist and hopefully tucked away under the white lab coat in the process of doing science. Bias is a fact (zing!) of all science, social and natural, and to ignore it is to fall into the real trap of ideology, rather than the imagined trap of ruminating over which facts have so-called ideological bias.
Interestingly, House and Smith both use their posts as an opportunity to take a jab at “hardcore Marxists”, which although somewhat incidental to the main axis of debate, actually has bearing as Marx explored issues of philosophy of science to a much greater extent than most contemporary economics. Here is Smith:
If you think the liberal position is “Taxes have no detrimental effect on labor supply whatsoever,” then sure. But that’s quite a bit of a goalpost relocation. Maybe a hardcore Marxist would make such a claim (I don’t actually know, since I don’t know any hardcore Marxists). But a mainstream American liberal would not. A mainstream American liberal would likely claim that the small efficiency loss from taxation was an acceptable price to pay for the welfare gain of redistribution. The same goes for most of the other facts Chris cites. Interventionist policies lead to small efficiency losses. That contradicts the (possible) Marxist position that interventionist policies lead to no efficiency loss.
On a side-note: here is a real movement of the goalposts! Seeing as the label “conservative” applies to right-wing radicals and liberal to right-leaning or centrist social democrat (at best!) in contemporary American political discourse, then it is only fitting that “hardcore Marxist” comes to mean “naïve, bleeding-heart social democrat”. In reality, any Marxist worth her salt will see the state as problematic at best. Rather than a partner to be celebrated for its extreme efficiency in regulating capitalist enterprise, it is a dangerous arbiter of class power that can be used as a tool to score victories for workers that must then be constantly defended.
Bur back to the issue at hand: the relevant point is that Marx’s Capital is not a critique of capitalism but, as its subtitle states, “a critique of political economy” and thus also helpful in understanding why the neutrality of facts is a lost cause. Marx is in part providing a critique of the view that “the facts are the facts” in the economy, that what is true today is and will be true always and forever. His is not primarily an ethical critique but a critique from the point of view of philosophy of science. For workers, the point is not that they are unjustly exploited – that less exploitation would be OK – but that they are implicated in a social system that naturalizes their exploitation and presents it as a series of universal facts: this is simply how any economy functions.
Marx, like many radical theorists before and after, saw the immense power of capitalism to transform society through its engines of wealth generation and technological innovation, both driven by the profit mechanism. This admiration of transformative potential is, however, not to be confused with acceptance and justification. Economics has, in large part, lost this distinction, for capitalism also transforms thinking: the generation of wealth is mirrored by a generation of concepts, technical innovation by innovation in justifications. Liberal and conservative biases are two versions of these justifications that regardless leave the key issues of what the facts are untouched. In the process of capitalism’s development, the unique “capitalist facts” become simply the universal “facts”. There is a bias, but it goes deeper down than in the current debates. The facts are neither liberal nor conservative; they are capitalist.