Neoclassical economics and postmodernism


In a review of "In Defence of History: Marxism and the Postmodern Agenda" (edited by Ellen Wood and John Foster, Monthly Review 1997), economics professor, Yanis Varoufakis of the Univ. of Sydney, says,

"Come to think of it, the asymptotic limit of postmodern fragmentation is the neoclassical general equilibrium economic model. In both cases, the only admissible social explanation springs from differences in preferences (and if identities are freely chosen, in identities) which are constructed in such a manner that they ban any comparison across persons. As for social relations, these are reduced to interplay, voluntarism and exchange. Freedom is defined in negative terms, and structural exploitation is axiomatically rendered meaningless. Above all else, both neoclassicism and postmodernity espouse a radical egalitarianism that is founded in the rejection of any standard by which the claims of one group (or one person) are more deserving than those of another. Moreover, both fail to provide a principle that promotes, in the context of their radical egalitarianism, respect for the other's difference or utility. If indeed postmodernity is analytically indistinguishable (at least in the limit) from neoclassical economic method, is there any doubt about this book's pertinence? After all, the whole purpose underpinning the emergence of the neoclassical economic project, at a time when Marx's "Capital" was beginning to bite, was to rid economics initially, and social science later, of history."

What do list members think of this?

Michael Yates

Odd. Neoclassical economics, as I learned it, presents itself as value free hence no commitment to equality. A Pareto optimal situation may be an extremely unequal one. Nc economics and postmodernism have different roots. Neoclassical economics in good old British empiricism and postmodernism in Heidegger, Husserl and Nietzsche. Nc economic man is very Humean since passion and never reason motivates. Reason is instrumental finding means to ends. Since reason can never discover ends or summum bonum, ends cannot be compared. As Hume said "reason is and ought to be a slave of the passions." Postmodernism seems to be the idea that understanding cannot be accounted for in explanatory terms. The scientist attempting to explain everything cannot explain herself trying to explain everything. The neurophysiologist cannot explain neurophysiology neurophysiologically. What's left out of attempts at total explanation or metanarratives is the 'self' that does the explaining. Pomo takes its cue from Nietzsche's statement in The Will to Power that "there are no facts just interpretations". Heidegger reveals the ways that everyday practice and culture illuminate the meaning of Being. Or something like that. So if pomo and nc theory have anything in common its for different reasons. I also think that a lot of pomo is so vague that it can be interpreted to mean just about anything. The exception would be Foucault. Needless to say, neoclassical economics and postmodernism don't do much for my utility function.

Sam Pawlett