An Idiosyncratic Road to Crisis Theory

As an undergraduate, introductory microeconomics didn’t make any sense. After a few weeks, I realized that it was easy to get a good grade until by working backwards. Since the goal was to show that everything worked out perfectly, all you have to do on an exam is to start with the answer that the market creates the best outcome, then work backward to figure out what would make it occur. Economics soon became my easiest class. Although I do not follow that procedure anymore, I am convinced that much of the economics profession still does.

Eventually, some seemingly obvious questions began to trouble me. Economics, which purports to explain the nature of a capitalist system motivated by profit maximization, lacks a theory of capital as well as any coherent explanation of the determination profits. One of reasons is simple: economics generally deals with a static conception of the world, yet fixed capital, which becomes increasingly important with the maturation of capitalism, calls out for a dynamic analysis, even with a static conception of the world.

Read more here


6 comments so far

  1. Julio Huato on

    Read more where?

  2. Ed on

    I also find that many Economics Departments in the United States focus heavily on Microeconomics with little or no coverage on Macroeconomics, which is problematic because many Americans “graduate” from college and BELIEVE, with great faith, that Economics is the study of organizations and less the study of national economies, the structure of national economies and national performance. This hinders economic education, especially since the effects of industrial policy in the United States has been overlooked or ignored, but continue to affect and even hinder our nation’s fiscal policy.

  3. Jon B on

    Here’s another blog that I’d recommend for anyone interested in a critique of crisis theory from a Marxist perspective:

  4. Pito on

    I went to business school after deciding I didnt want to be a doctor. For someone with a science background I found business school, and economic theory in particular, so completely bankrupt and devoid of basic logic, proof, and evidence that it is funny if not so pathetic. Economists are really like a religious fanatics. They have their holy axioms that cant be challenged or even questioned, but insted just go out looking for proof and evidence for them. In about an hour’s time I can explain to you just about everything you ever needed to know about “economics”, and very little of has anything to do with free markets, equilibrium, etc. To begin with the most basic idea, it is this. There are market forces, but there are no such things as free markets. The role of governments and businesses is to shield themselves from, manipulate, and distort market forces. Always has been. The biggest lies are those of ommission. Never in business school did a professor ever so much as mention the critical, necessary role the state plays on behalf of businesses and those who can manipulate the resources of the state to their benefit win big and pass on the costs to the public. Free markets my hind…

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: