Bourgeois Economics?

[Redistribute the Rep]

I'm taking an economics class which I thought would be interesting , but really it's just all supply, demand, GDP, aggregate supply and demand, which I find pretty boring. I'm not sure if this is what you would call "bourgeois" economics, but how is this type of stuff viewed from a Marxist perspective?

[Hrafn]

Wrong?

[Bala Perdida]

And a market economy is the greatest because you vote with your dollar! Which itself isn't worth shit, when they decide it isn't. Confusing shit like that, bit it's all wrong anyways. That class is annoying, at least from my exposure to the subject.

[Creative Destruction]

Wrong?

GDP, supply and demand, etc. are not really wrong as such, as much as they're just metrics for a capitalist economy. What matters is how you interpret those metrics. There are some tweaks that Marx did to them that showed exploitation, falling rate of profit and what not. It's also a matter of perspective. An Austrian would take a "cold hard look" (even though they don't really because they negate a whole bunch of metrics and arguments) and say that they can gauge whether society is healthy. A Marxist would take a look at them and say that underneath it all is exploitation and that capitalism is inherently unhealthy.

To the OP: if your teacher tries to frame these metrics as ethical arguments or as descriptors about how good the capitalist model is, then he's taking an ideological stance. In which case, you do what you should do in any other 101 class: study the material and get the "right" answers on the test. If he's just trotting out basic, bottom of the barrel, Econ 101 concepts, then there's not much to say about them other than it's language used to understand a capitalist economy. I'd say to supplement this class, you read Andrew Kliman's The Failure of Capitalist Production, to give you a better understanding of how these metrics might fit into a Marxist argument (you may not agree with his conclusions... I find it hard not to, but ymmv.)

[Red Economist]

I'm taking an economics class which I thought would be interesting , but really it's just all supply, demand, GDP, aggregate supply and demand, which I find pretty boring. I'm not sure if this is what you would call "bourgeois" economics, but how is this type of stuff viewed from a Marxist perspective?

Yes, this is 'bourgeois' economics. it's important to keep in mind that Marxism remains the closest in it's intellectual content to the classical school of economics of Adam Smith and David Ricardo, (Thomas Malthus and John Stuart Mill are included occasionally but it's debated because Malthus discussed population and Mill, so I've heard, is accused of revising classical economics to go slightly leftwards). So Marxism is a heretical socialist offshoot of 'bourgeois' economic theory.

What your probably studying is the 'neoclassical school' of economics, with some Keynesian ideas about deficit spending thrown in.

neoclassical economics focuses on individual decision making within markets and this is important for understanding 'day-to-day' economic behavior in a capitalist economy. It focuses on 'micro-economics' which are these individual decisions and is based on ideas of self-interest or 'economic rationality' (a very crude and consumerist 'more is better' where economists have no moral responsibility to ask if what people want is really good for them; it's all about consumer satisfaction, even if the product, like tobacco, will kill them).
This was somewhat revised in the 1930's by Keynes, who introduced the idea that a national economy may not behave in exactly the same way as individual markets (in that economists- even in the depths of a then unprecedented economic depression- thought the market would 'self-right' and achieve a stable equilibrium or price agreement between demand/consumers and supply/producers).

The difference between classical economics and neoclassical economics developed at the end of the 19th century and comes down (to the best of my knowledge) to two things; the use of mathematics and the controversy around the labour theory of value.

The first is that economists longed to be respected as a 'science' like physics or chemistry and so imitated theoretical physics in adopting mathamatics as a way of explaining their ideas and predicting human behavior. For a variety of reasons, this is bullshit because human beings simply do not behave in the way economic model suggest (we're far from 'rational' decision-makers as consumers... think black Friday sales in the US) and these models rely heavily on the assumption of 'perfect information' (that economists know everything- which is great for their ego, but really bad news for anything resembling sanity).
But economists use it basically because it provides them an escape from ever actually having to look at how an economy actually works. The more abstract an idea is, the better- because no-one can challenge it with 'facts' or 'evidence' or anything resembling.... 'the truth'. So maths is a very useful way of obscuring economic data and rationalizing whatever they're paid to justify.

In the 1970's NASA laid off it's scientists and mathamaticians and some of them got hired by wall street because maths equations looked like a 'convincing' way to sell financial products (i.e. no-one understood what the hell the formulas were saying and so sat around looking very impressed because they knew they're customers wouldn't either and realised it was a great marketing tool).
By 2008, the banks had forgotten that they didn't understand the maths and came to believe in their own myth making in assessing risk. the financial sector therefore ran into existential problems because the formulas they had used to calculate risk had simply gone beyond their original assumptions and no longer worked. They lent mortgages to people who they knew couldn't repay ('sub-prime') and used maths to 'average' out the risks by mixing the bad debts in with the good debts of the people who could repay. but ultimately the actual repayment of the debts remained the same and banks fooled themselves with their own numbers into thinking they had made money from losses.
Another thing was that banks were using 'hedge funds' to make bets on what the future prices would be and so were making 'profits from their losses'. This relies on the assumption that prices always go up- so if their is ever market instability... the value of the assets their holding plummets and they're in serious trouble.
That's what the financial crisis was about- they realized the sums didn't add up anymore, so the banks held on to their money because they didn't know who was making the losses (including themselves) and therefore asked the government for billions in a bailout [they made the figure for the bail out money up by the way, because again- they didn't know how much shit there were in. they just knew they were fucked.].

As kind of a footnote; Maths also makes economics easy to understand for computers, so most financial transactions now take place on computers and the 80's image of the 'trading floor' has very much dissappeared. This occasionally results in a 'flash crash' because the computers react to falling stock market prices and get trapped in a loop of selling causing market prices to plummet... the IT technicians therefore shit themselves as billions get wiped on the stock market in minutes and pull the plug on the computers. it's like Terminator, only skynet is in a suit and works in banking... and Schwarzenegger is a geek trying to pull the plug to save people's pension funds and investments. I think this has happened in Tokoyo a few times, but here's the one in the US from May 6th 2010 in real-time.

https://www.youtube.com/watch?v=86g4_w4j3jU

meanwhile, back in the nineteenth century, economists were trying to figure out how to deal with a serious problem, which is the second major difference between classical and neo-classical economics; the labour theory of value. In the classical school of economics, value is created by human labour making raw materials 'useful' and giving it a 'use-value'. This had caused serious problems as it made the moral case that workers should own the means of production and it's products (because they made it, and so had an entitlement to it). The Labour Theory of value was therefore central to socialist economic theory (and Marxism specifically).
In addition to this, the labour theory of value represented a moral or intrinsic value (the 'use-value' ascribed to a product) and so did not translate into mathamatics and help economics become the 'science' economists wanted it to be.
So the economists came up with the novel of idea of saying that value is not derived from the producer, but the consumer; i.e. the consumer gives a commodity it's value by creating demand for it called 'marginal utility'. 'value' therefore meant price and hence fitted nicely into mathematical models, whilst also undermining the case for socialism since the moral arguments for capitalism could rest on the selfish 'human nature' of the consumer, as opposed to the workers 'moral right' to own what they produce.
This had an added bonus for economists in that if economics focused on individual behavior- it would be impossible to anticipate the future development of capitalism whilst still cliaming ways to predict short-term behaviour based on what they think is in the self-interest of consumer/investors. Since economic theory it now relied on the 'free will' of the consumr Marxist arguments about the future of capitalism could be ignored because they were based on older ideas of underlying 'economic laws'.
finally, by saying people are 'consumers', and not divided into 'workers' and 'capitalists' they eliminated the idea of social class in classical economics.

the debate over the labour theory of value is currently on-going in the People's Republic of China because they've inherited the marxist theories and can't get them to fit into the neoclassical economic models that as supposed to show how markets 'work'.

So, basically the Marxist approach is it's 'bollocks', but it's useful in so far tells the bourgeois how to do business in the short-run, helps them anticipate (or rationalize) consumer behavior and justify their existence by saying they're giving the consumer what they want without ever having think about whether the system works, whether capitalists have any moral right to own or profit from what others have produced or has a future in the long-run because of underlying class conflicts.

[Hit The North]

I took an economics class back in the mid 1980s and it was the same as you describe. If you want to study Marxism you will need to study sociology or politics where it is at least acknowledged as an alternative to the mainstream. But economics in the academy is locked into a narrow bourgeois paradigm which assumes that economic forces operate in a sphere which is independent of the social relations. In fact there is a global campaign by economics students to transform economic teaching: here
(http://www.theguardian.com/education/2014/may/04/economics-students-overhaul-subject-teaching)
Maybe you could become part of this?

[Ocean Seal]

GDP, supply and demand, etc. are not really wrong as such, as much as they're just metrics for a capitalist economy. What matters is how you interpret those metrics. There are some tweaks that Marx did to them that showed exploitation, falling rate of profit and what not. It's also a matter of perspective. An Austrian would take a "cold hard look" (even though they don't really because they negate a whole bunch of metrics and arguments) and say that they can gauge whether society is healthy. A Marxist would take a look at them and say that underneath it all is exploitation and that capitalism is inherently unhealthy.
I think a Marxist can be quite a bit more through than that. First off GDP, supply and demand, and bourgeois in that they are metrics for a capitalist economy. Secondly they are manufactured statistics being that only one can be controlled (supply) and demand is really a function of limited choice. Bourgeois economics is quite sad in that it cannot even serve the capitalist economy being that its so terribly superficial.



To the OP: if your teacher tries to frame these metrics as ethical arguments or as descriptors about how good the capitalist model is, then he's taking an ideological stance. In which case, you do what you should do in any other 101 class: study the material and get the "right" answers on the test. If he's just trotting out basic, bottom of the barrel, Econ 101 concepts, then there's not much to say about them other than it's language used to understand a capitalist economy. I'd say to supplement this class, you read Andrew Kliman's The Failure of Capitalist Production, to give you a better understanding of how these metrics might fit into a Marxist argument (you may not agree with his conclusions... I find it hard not to, but ymmv.)
This is a good point. Knowing a countries GDP/ import/export ratio /whatever supply/demand actually mean are not useful factors for determining how "good" an economy is.