Power, Ideology, and the Blind Spots of Mainstream Economics

This podcast episode delves into the fundamental tension between economics, which notionally studies non-coercive relationships, and political theory, which focuses on power. It argues that mainstream economics often ignores or renders invisible the pervasive presence of power in economic relations. The discussion introduces Karl Marx as a central figure and explores Stephen Lukes' three types of power: blunt (coercion), agenda (controlling discourse), and ideological/hegemonic (shaping beliefs and preferences). Ideological power, exemplified by concepts like false consciousness (Marx) and hegemonic power (Gramsci), is presented as the most subtle and pervasive, operating through internalized beliefs and values, making it difficult to detect.

The episode further dissects three structural conceptions of power: the liberal, Marxist, and Machiavellian. The liberal view sees the state as a benign provider of public goods, ensuring protection and preventing monopolies, aligning with neoclassical economics. In contrast, the Marxist perspective posits the state as an instrument of class domination, with ruling ideas reflecting dominant material relationships. The Machiavellian or elitist theory views power as an end in itself, a cynical struggle between elites for rents, suggesting that revolutions merely replace one set of rulers with another, and that ideologies like socialism can be forms of false consciousness.

Mainstream economics is critiqued for its narrow understanding of power, typically confining it to market imperfections like monopoly or oligopoly, and assuming such imperfections will eventually self-correct. It often overlooks the political power wielded by concentrated economic agents (e.g., cartels lobbying for their interests) and the structural influence of big firms, labor unions, and advertisers. The discussion highlights John Maynard Keynes's assertion about the immense power of ideas, but questions their true independence from vested interests, especially given the financing of economic research by government and business.

The Marxist charge that bourgeois economics serves capitalist interests by disguising reality with scientific pretension is explored, noting how this elevates economics to a 'science' akin to the hard sciences. However, the episode also offers a nuanced counter-argument, suggesting that the relationship between ideas and vested interests is not a simple base-superstructure model. It points out that the business class itself is not monolithic, and the balance of power between various social and political groups (e.g., capital, labor, democracy) influences the pluralism of economic thought. Ultimately, while economics possesses a relative autonomy, its propositions often provide scientific support for specific political programs, reflecting and reinforcing existing power structures.

power is the force which compels, the ability to secure compliance

Stephen Luke's identifies three types of power which we can call blunt power, agenda power and ideological or hegemonic power

it arises when the individual submits to the purposes of others not only willingly but with a sense of attendant virtue

Marxists talk of false consciousness

religion was the opium of the people

Gramsci coined the phrase hegemonic power to explain why the proletarian revolution hadn't happened

the ideas of the ruling class are in any epoch the ruling ideas

play the Sheep Pareto said and you will meet the butcher

people of the same trade seldom me together even for merriment and diversion but the conversation ends in a conspiracy against the public or in some contrivance to raise prices

mainstream economists have not only found concepts like exploitation and power to be useless in explaining economic phenomena but they worry about introducing such emotionally charged words into the analysis

the ideas of economists and political philosophers both when they are right and when they are wrong are more powerful than is commonly understood indeed the world is ruled by little else

what else he wrote does the history of ideas prove then that intellectual production changes in proportion as material production is changing

during my whole career I have considered myself somewhat of a schizophrenic on the one hand I was interested in science kWe science and I have tried successfully I hope not to let my ideological viewpoints contaminate my scientific work on the other hand I fell deeply concerned with the course of events and I wanted to infer so as to enhance human freedom luckily these two aspects of my interest appeared to me to be perfectly compatible