MarxistEconomics

Quora Answer : Why is Neoclassical economics more popular than Marxist economics today?

Nov 3, 2015

These aren't your only two options. There's also Keynsianism which was the mainstream for much the middle 20th century.

Neoclassical was deliberately promoted by right-wing economists and think-tanks in the 50s and 60s, by the kind of Austrians who saw the establishment of the welfare state as "The Road to Serfdom". It then took advantage of the failures of Keynsian inspired policies in the 70s to establish itself as the new orthodoxy.

Since then, neoclassical hasn't been particularly impressive, either in making predictions nor in guiding policy, if you compare it to Keynsianism. But the generation of economists who were educated in the 70s and 80s, for whom this was the orthodoxy are still working through the system.

Marxist economics was basically the original classical economics of Smith and Ricardo. It was sidelined by the Marginal Revolution and the philosophical shift in what economists considered to be their business. (See LabourTheoryOfValue for more details.)

Marxism today is better thought of as a sociological model, that tries to tie economics to wider human behaviour ... eg. the political structures and even psychologies / world-views that emerge within a particular economic system.

At its broadest, the Marxist tradition is simply the idea that you can't, as the neo-classicals assume, assert that there is a given idea of the human individual, with predetermined wants, that are expressed through economic activity; but that the economic environment itself feeds back into and shapes the individual and his or her wants.

This kind of Marxism is unpopular because people prefer simplified models where causality flows one way, rather than complex models where there are feedback loops and its hard to say what things are really stable or fixed and what things are fluid and negotiable.

When you go into the shop and buy chocolate cake, the neo-classicals have a nice, comfortable story about how you wanted chocolate cake more than you wanted everything else that you could have spent that money on. And so you made a free, rational decision in accordance with those desires. The last thing you want to hear is that you bought the chocolate cake because you were the hapless victim of false consciousness or that some kind of Deleuzian machine was operating through you. That's not at all comfortable.