One Hundred Years of Marxist Social Science

Jon Elster

There might appear to be something inherently unscientific in the designation ‘Marxist social science’. Following Whitehead’s dictum that ‘a science which hesitates to forget its founders is lost,’ one could argue that Marxism – the valuable parts of Marxism – should simply merge with the mainstream of social science and lose its identity as a separate current. Indeed, there is much to be said for this view. In the confrontation between Marxist and non-Marxist social theory over the past century, some of the main Marxist tenets have been decisively refuted, while others have been absorbed into the shared framework of all social scientists. If these were the only consequences of that confrontation, there would perhaps be no point in referring to a specifically Marxist social science. I believe, however, that there remain elements of Marxist thought which, while valuable and important, are yet not sufficiently appreciated outside the Marxist camp – and I have to add, not always within that camp either. These elements include the dialectical method, the theory of exploitation, a theory relating class interest to state policy, and what one may refer to as a theory of endogenous belief formation. These do not form a fully coherent theory, but a loosely integrated whole, with much scope for further development.

Marx’s methodological views form a confused and confusing amalgam of profound insights and utter nonsense. Some readers grow so irritated with the nonsense that they cannot muster the necessary patience to understand and appreciate the valuable parts. I will begin by clearing away the rubbish. The three deadly sins of Marxism are methodological collectivism, functional explanation and dialectical deduction. They are closely related to one another, and often go together in practice. Yet they represent distinct fallacies, and can in principle occur in isolation from one another. Methodological collectivism is the belief that aggregate entities – classes, capital, the state or the species – are prior in the explanatory order to the individual components of which they are made up. The converse of this view is methodological individualism, which insists on the need for microfoundations of such aggregate phenomena. Both views are to be found in Marx, sometimes within the same work. Instances of methodological collectivism are his idea that competition between capitalist firms is logically secondary to the notion of ‘capital in general’, or his speculative belief that history was a vehicle for the self-realisation of humanity. The latter notion was derived from Hegel. Like Hegel, Marx offered a logically incoherent view of history, a half-way house between a fully religious theory and a fully secularised theory. For both, history was the embodiment of objective teleology, a process that had goal but no subject. It is not necessary today to insist on the fact that this has led to much more than a violation of methodological individualism: that in the name of historical necessity actual individuals have been sacrificed.

Functional explanation offers an account of social phenomena in terms of their consequences, and thus is different from both causal explanation and intentional explanation which invoke, respectively, causes and intended consequences as the explanatory factors. There is nothing inherently absurd in the functional mode of explanation, provided that it is backed by an account of the mechanism by which the consequences feed back on their cause and contribute to upholding it. The actual practice of many social scientists, within and outside Marxism, does not fulfil this last condition, however. All too often they rest content with pointing to the fact that an institution or a behavioural pattern has beneficial consequences for someone or something, and then simply assume that this also provides an explanation of the phenomenon.

Dialectical deduction is dialectics in one classical, pejorative sense of that term: spurious, scholastic reasoning. In Capital, and especially in the Grundrisse, Marx tried to apply the mode of analysis of Hegel’s Logic to economic phenomena, in a seemingly deductive chain. The most notorious instance was his attempt to deduce capital from the existence of money. Arguing that money is inherently expansionary, he concluded that it can only preserve itself by multiplying and hence that money ‘posits’ capital as its fully developed form. Here Marx tried to perform with a conceptual sleight of hand the task to which Max Weber devoted vast empirical studies – that of explaining the emergence of the reinvestment motive in early capitalism.

Let me now turn to the more interesting matter of Marx’s durable contribution to the methodology of social theory. Broadly speaking, methodology involves the following: causal explanation of individual desires and beliefs, intentional explanation of individual behaviour in terms of these desires and beliefs, causal explanation of aggregate phenomena in terms of such individual behaviour.

Modern economic theory tends to take the beliefs, and especially the preferences, of individual agents as given, or at least as being outside the scope of economic explanation. Marx wanted to endogenise these phenomena. He wanted to explain, that is, how such mental phenomena are not only causes but also effects of the economic structure in which they are embedded. He did not carry out this programme as far as preferences are concerned, nor have later Marxist attempts in this direction been successful. Marx did, however, carry out his intention with respect to a certain subset of the beliefs of economic agents: their beliefs about how the economy itself works. His theory of fetishism and his critique of vulgar economy were powerful, pioneering attempts to explain how erroneous beliefs about the economy are both generated by it and in turn enter into its reproduction.

Going one step further in the explanatory hierarchy, we may explain individual actions in terms of the agents’ desires and beliefs. It is sometimes argued that Marx wanted to avoid such explanations because of their subjective character, and that he preferred to explain behaviour as the outcome of structural constraints acting upon the agents. Although it is true that Marx occasionally argued in this way, and that he was occasionally justified in doing so, there are no grounds for saying that he was in general averse to intentional explanation. His political analyses make this clear, as do many of his economic theories. The labour theory of value, for example, rests on the assumption of profit maximisation, since this is what fuels the tendency to equalisation of the rate of profit in the different spheres of production. Similarly, his theories of technical change assume that there is scope for genuine entrepreneurial choice between different techniques.

The most characteristic mode of reasoning in the social sciences is the mixed causal and intentional approach to aggregate phenomena, in which such phenomena are seen as the causal resultant of many individual actions each of which is intentionally explained. Historical forerunners of Marx in the application of this method include Mandeville, Vico, Adam Smith and Hegel. Their common premise was well summed up by Adam Ferguson: ‘History is the result of human action not of human design.’ Marx’s contribution was to transform this view from being merely a Weltanschauung into a workable scientific instrument, enabling one to see in detail how unco-ordinated actions generate unintended consequences. Although Marx did not neglect beneficial unintended effects, of the invisible-hand variety, his attention focused on the negative or self-destructive effects. He was concerned to describe capitalism as a system in which individually rational behaviour leads, in the aggregate, to disastrous results: For instance, he perceived before Keynes the central contradiction of capitalism according to which each entrepreneur wants his own workers to have low wages, since this makes for high profit, while wanting the workers employed by other entrepreneurs to have high wages, since this makes for high demand. Keynes showed that individually rational responses to demand crises – for example, laying off workers – may in the aggregate only serve to make things worse. Marx’s theory of the falling rate of profit rests on a similar paradox: each capitalist responds to a rise in the price of labour by substituting machinery for workers, but this individually rational response is collectively irrational since living labour is the only source of surplus-value and ultimately of profits. Unfortunately, this attractive argument turns out on closer inspection to leak like a sieve, but we may nevèrtheless note that it exemplifies the same important pattern of reasoning.

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