Another extract from my forthcoming article in Perspective Magazine. So, what exactly is capitalism? Marx’s definition …the private ownership of the means of production…is attractive because of its simplicity. Unfortunately, Marx’s analysis is binary: the means of production can be privately owned (capitalism), or communally (in reality, state) owned. He doesn’t seem to have considered the possibility of some of the means of production being in private hands with the rest owned by the state. This public/private mixture is, of course, what we usually find in the modern world, and it’s a mixture that invites questions. Furthermore, ownership isn't the whole, or even the real story. The real issue is control. If you own (say) a factory but you can manufacture only what the state allows and sell at prices they dictate, ownership doesn't really count for very much. The important question is obviously this: Just how much of an economy can be controlled by the state before it ceases to be capitalist? There isn’t much agreement about the point (range?) at which state control of industry turns a capitalist economy into a socialist one. Later in the article, I attempt to identify some of the important considerations here, but first I want to go a little off-topic to look at something Ha-Joon Chang wrote about it. According to Ha-Joon Chang: "There's no scientifically defined boundary for the free market [via-a-viz the state]." Ok, I can agree with that. But then he goes on to say: "Recognising the boundaries of the market are ambiguous and cannot be determined in an objective way lets us realize that economics isn't a science like physics or chemistry, but a political exercise...If the boundaries of what you are studying cannot be scientifically determined, what you are doing is not a science." I've met Ha-Joon Chang and he's a charming and impressive guy, but regardless of the accuracy (or inaccuracy) of his claim (that economics is a political exercise rather than a science) his argument completely fails. Does physics set its own boundaries? If so, how? Using physics? What about Chemistry? Is there an experiment which will throw the boundaries of chemistry into sharp relief? No. Subjects do not and cannot set their own boundaries 'scientifically'. The boundaries are set by convention. But to infer from this that physics and chemistry are mere matters of convention is to radically miss the point.
Well. Well agree to disagree in that Peter Lawlor . One if the things real science does is to set its boundaries very precisely in both theory and experimentation. I'm not accepting that economics is a political exercise solely, but science it isn't , beyond a bit of microeconomics perhaps.
Economics is the most finite science there is. It's the observation and mathematical structuring of human behavior. There are probably innumerable physical discoveries yet to be made. Science is as politicized as it's ever been. And as far as Communism, it is the most inhumane, cynical, self serving mechanism one can possibly fathom in human history. It's simply evil on its merits and deserves no quarter where humans exist.
Economics (the study of choice) and politics (the study of manipulation and coercion) are opposites. One advantage of knowing this is that understanding one opens a large window on the other.
Please! I am not seeking any more mentoring or NED positions. Retired business guy and chartered accountant. Nonconformist, rational, creative. I help good people. Built and sold businesses. Ethics before gain.
1yThe essential difference between 'real' sciences like physics and 'not quite' sciences like economics and neuroscience is that in a proper science you can make predictions from theory which can be affirmed ( or not) by experimentation that can be replicated. In a multivariate, dynamic and essentially uncontrollable paradigm like a market, this is not possible. One of the recent triumphs of physics for example was the confirmation ( this is an overstatement, of course, scientific theory is always the best working hypothesis as affirmation is not proof) of the Higgs boson...the theory predicted the particle should exist in the mass range in which a particle was found. Critically, had it not turned up, the theory would have had to be revisited as a wrong prediction would invalidate it. Big difference. I think that difference is that to which he is alluding, although in a controlled experiment, the theory and experimental paradigm are precisely set out...this enables the replicability which is crucial in experimental science.