A Reply to "Anarchist Economics, Marxist Economics, and Pareconist Economics."

international | economy | debate Saturday July 07, 2012 02:04 by Robin Hahnel

Robin Hahnel's response to Wayne Price's article "Anarchist Economics, Marxist Economics, and Pareconist Economics".

A Reply to "Anarchist Economics, Marxist Economics, and Pareconist Economics." In his review of three essays by supporters of “participatory economics” published in The Accumulation of Freedom: Writings on Anarchist Economics Wayne Price distinguishes between the nature of capitalism, how best to go about overthrowing capitalism, and how best to organize a desirable post-capitalist economy. On the third issue – other than some methodological quibbling -- he offers no substantive criticism of the model of a “participatory economy” originally developed by Michael Albert and myself. One can even read his own essay on that subject in The Accumulation of Freedom as mildly complimentary toward our attempt to make the left libertarian alternative to capitalism more concrete and therefore more compelling. Price is correct, however, that we disagree about the nature of capitalism as well as what we are going to have to do to overthrow it.

Price offers no argument in favor of a “Marxist” analysis of capitalism – including the assertion that there is a long run tendency for the rate of profit to fall in capitalism, leading to crises -- as compared to a “liberal Keynesian” or “Sraffian” analysis of capitalism – which does not subscribe to any such tendency. He merely cites the work of Marxists Brenner, Foster, Magdoff, Kliman, and Mattick approvingly, and disparages the work of Keynes and Sraffa without argument. Since he offers no argument for the Marxist analysis, or against what Keynes or Sraffa had to say, there is nothing for me to rebut. I can confirm that I know the work of the Marxists Price cites approvingly and believe their analysis of capitalism to be flawed and misleading. That is one reason I do not call myself a Marxist economist.

Price is wrong when he says: “Since the Pareconists reject Marx’s labor theory of value and the analysis which follows from it, they have no theory of where profit comes from.” I do not call myself a “Pareconist” because I think it is a poor choice of a word to describe oneself. However, just because I reject Marx’s labor theory of value does not mean I have no theory of exploitation and where profits come from. Any interested in a non-Marxist theory of exploitation should read my: “Exploitation: A Modern Approach” published in the Review of Radical Political Economics (38, 2), Spring 2006: 175-192.

Price quotes Andrew Kliman to the effect that my refutation of the tendency for the rate of profit to fall published in The ABCs of Political Economy (Pluto, 2002) makes the mistake of using a model that assumes that prices stay the same after a technical change is introduced. That is also incorrect. Prices do change when new technologies are introduced in the model I use -- as my model demonstrates they must. It is Kliman who makes the elementary mistake of confusing relative prices with absolute prices in economic models.

Regarding what will be necessary to cut the albatross of capitalism from around our necks, Price and I also disagree. As best I can tell he proposes a program that is no different from the programs of libertarian Marxists and anarchists in the early twentieth century. It didn’t work then, and it is even more out of date and less likely to work now. What is called for instead is creative new thinking about political strategy. Unfortunately, in that area Price offers nothing but same-old, same-old.

Robin Hahnel

The Wayne Price article "Anarchist Economics, Marxist Economics, and Pareconist Economics" is available here: