Reclaiming Economics illustrates the frustrations students of economics encounter and offers some thoughts of how to reclaim the subject for the 21^st century, finds Orlando Hill

Reading the introduction to Reclaiming Economics reminded me of why I decided to study the subject at university in the late 1970s. Like many of my classmates and friends, I was active in rebuilding the secondary-school student movement in Brazil, and like the authors of the book I wanted to ‘understand the world … and improve it’ (p.3). Among the social sciences, economics seemed to be the most suitable in providing the necessary tools that would enable an understanding of the reasons for inequality and how to transform society.

Differently from Alex, one of the interviewees, who got into economics ‘to relieve the barriers that people face to self-sufficiency and just living’ (p.3), I wanted to tear them down. I had no inclination ‘to influence government policy to make things easier for already marginalised people’ (p.28). I wanted the marginalised people in power. It was the 1970s. Brazil was under a military dictatorship, and I dreamed of a ‘Brasil Socialista’.¹

At the time, economics at the Federal University of Rio de Janeiro (UFRJ) had an interdisciplinary approach. The teachers were influenced by the UN’s Economic Commission for Latin America and the Caribbean (CEPAL in the Portuguese and Spanish acronym). CEPAL developed an approach to economics known as ‘historical structuralism’. According to this school of thought, the economies of the region could not be understood as going through rigid stages of development. The dynamics of late comers were necessarily different than those of countries that experienced development at an earlier stage.

The methodology developed by CEPAL combined insights from other social sciences. That influenced how economics was taught at UFRJ in the late 1970s. History was central in the curriculum. We studied Brazilian economic history and the history of political thought, covering Adam Smith, David Ricardo and Karl Marx. We were mostly influenced by Keynes, Michal Kaleki, Celso Furtado and Maria Conceição Tavares, who is now the emeritus professor of the faculty. The course was very critical towards market-oriented policies and the insertion of Brazil in the global economy. Instead, it favoured government intervention policies.

Dogmatism of orthodox economics

That is a far cry from what the authors and those they interviewed for the book experienced when embarking on their studies of economics. They encountered a subject dominated by white European and American men who followed a dogmatic school of thought. Minorities and women were underrepresented, as Francesca Rhys-Williams discovered when at the beginning of her course she was ‘surprised to find the class included few women’ (p.25). This underrepresentation shapes what is acceptable as a research topic and what is not. As the book points out, you are more likely to be interested in inequality if you come from a sector of society that suffers from the effects of inequality. Students find that any research that deals with inequality and oppression is not taken seriously. It is not even regarded as true economics. The lack of black and female economists acts as a barrier to entry and as a barrier for widening the field of what is considered credible economic research.

What is worse than the lack of representation is how narrow the study of economics in universities has become. Although economics, like any other academic discipline, has many different perspectives within it, one school of thought has become dominant within university departments and academic research: neoclassical economics, the theoretical basis for neoliberal policies. It has become so dominant that it is considered mainstream or orthodox economics. It is estimated that only 8.1% of academic research is conducted outside of this mainstream framework (p.56). It should not be that way. On pages 62 and 63 there is a table with ten different economic perspectives besides the neoclassical. A-level economics teachers should print the table and display it in their classrooms as a way of enticing students to take up the subject.

The authors are correct in identifying and examining the consequences of the dominance of the neoclassical perspective. Their analysis of its limitations in chapter three is clear and concise. They point out how the mainstream is blind to structural inequality and disregards history. There is no history. Economic laws are portrayed as being eternal and universal, like the laws of physics and chemistry. Consequently, mainstream economics can only prescribe a single and predetermined path from underdeveloped, i.e. poor, to developed. Because it does not allow countries to decide how far they would like to integrate into the global economy, it undermines democracy and the possibility of development that benefits everyone.

Name the system

I enjoyed reading the book. It was inspiring to read what a group of young economists had to say. They recognise the importance of understanding history and the structural inequalities derived from it. I agree that social sciences should not isolate themselves from each other. I will recommend it to my students. However, there were a few things that annoyed me.

Although the book is a critique of modern economies and how economics is taught, the term capitalism is rarely used. It is as if capitalism were Lord Voldemort, who must not be named. The authors prefer the term ‘modern economies’. Language is important. Defining capitalism as a modern economy is a euphemism giving it a positive connotation, which I think the authors would agree it does not deserve. Some would argue that capitalism is well past its sell-by date and should be disposed of in the dustbin of history. The avoidance of the term capitalism seems rather strange considering that the authors are extremely critical of the present form of the economy. It made me wonder whether it is an attempt to be taken seriously by academic circles, an issue that most heterodox economists struggle with. One of their interviewees, Juliana, a Brazilian student who had studied in two different European universities, felt disrespected by her professors who considered all Latin Americans as revolutionaries or communists (p.88). If only it were true that we were all revolutionaries.

Capitalism is introduced as a shift ‘from an economic system called feudalism to capitalism, the system we have today’ (p.13). The authors rightly identify slavery and dispossession of land as an important element in the transition to modern capitalism (p.126). I also agree with the evaluation of the mainstream’s definition of capitalism as simply a system based on three characteristics: private property, markets, and profit-making firms. Missing from this are the concepts of power and coercion.

The centrality of class

The working class is mentioned as just one of the many groups that suffer from the deep structural inequality of modern economies. The authors recognise the ‘deep and often intergenerational inequalities in wealth, income and power between groups in society distributed along racial, gender, religious, tribal, caste and class lines and between countries’ (p 92). Class is added at the end of this long list of oppressed groups almost as an afterthought. Very few lines are dedicated to the analysis of class inequality, or how the exploitation of workers is fundamental to the functioning of the system. The authors focus much more on gender and racial inequalities.

The competitive nature of capitalism (the modern economy) generates inequalities. It has been described as a war of all against all. It is correct to identify the different inequalities in society, but to list class as just one of many misses the point that the main contradiction is between capital and labour; those who control the means of production and those who are forced to sell their labour. In not identifying the main contradiction, it becomes very difficult to understand how political economy, the classic theory championed by Adam Smith and David Ricardo which did recognise the existence of classes, metamorphosised into the narrow, rigid, dogmatic school of neoclassical economics that we now have.

Georg Lukás described economics as the bourgeoise’s fundamental science. By arming itself with the knowledge of the workings of economics it was able to clash with feudal and absolutist rulers. It was through a revolutionary social theory based on reason, and not on dogmas and obedience to authority and tradition, that allowed the rising bourgeoise to establish its world concept, win ideological hegemony and become the dominant class.

However, once it was successful in becoming the dominant class, it had to convince the rest of society that history ended at the moment of its seizure of power. Consequently, it was not able to perfect its own ‘science of classes’ as it could not formulate a theoretical solution to the problem of crisis. For it to do so, it would have to abdicate its power freely. It would have to give up the pursuit of profit and hand over the means of production to society. The capitalist class (the bourgeoisie) would have to self-destruct.

Instead, mainstream economists and politicians try to convince us that the recession will be a short one and by the end of the following year things will be back to normal with the economy back to growth. We just have to bear with them.

This book is a step in the right direction. The authors correctly identify that there is ‘no alternative but to change our economies. Even if there was an option to continue business as usual, the necessity and urgency for economic systems change is common sense when the status quo is so clearly unjust and illegitimate’ (p.302). But if we are going to do that, we need to develop a theoretical model that allows us to understand present society globally, as a totality, and not fragmented from different perspectives.

Once in power, the bourgeoisie understood that the theory, based on reason and an understanding of history, that they had forged against feudalism had turned against them. The critique levelled at authority and tradition gave the working class the instruments to denounce the limits of capitalist economy and society. The bourgeoisie had to abandon Political Economy. The study of economics took two different paths. The ruling class developed the subject of Economics, restricted to the manipulation of variables that, at its best, allow a limited distribution of wealth. It restricts itself to the economic sphere of the market.² As the authors point out, anything that is outside these limits is considered ‘extra-economics’ and referred to other social sciences.

In opposition to Economics is the Critique of Political Economy inaugurated by Karl Marx and Friedrich Engels. Developed in the middle of the nineteenth century, it remains relevant in the twenty-first century insofar as the reproduction of capitalism still poses the same problems Marx sought to unravel, and continues to demand answers that point towards its abolition, and the elevation to a superior form of organising the economy and society.

The authors are wrong to dump Marx with other ‘White, male and Euro-American’ (p.90) economists who have dominated the subject. Genuine Marxism gives us the tools to overcome capitalism. This is not the dogmatic version presented in the book which identifies the ‘White, male, industrial working class’ (p.157) as the agency to create change. Marx himself clearly never would have accepted such a narrow definition of the proletariat. Of course we need to develop the theory and adapt it to our realities, but we do not need to re-invent the wheel.