It has often been claimed that economics has a leaning towards capitalism, or as some socialists call it and what I personally prefer, “economics is bourgeois propaganda”. This means that it has an inherent tendency to promote the interests of the capitalist class.
The first argument is that economics is by definition pro-capitalist since it explores the functioning of a market society. This argument is false for two reasons. First, economists study all kinds of societies, free market societies like ours, socialist, agrarian, feudal, etc. Even in radical books like Rothbard’s Man, Economy and the State there is an unusually extensive discussion of resource allocation in moneyless societies (although almost all of these discussions are highly critical). Second, the definition of economics is almost always something like “the study of how a society manages its scarce resources”, as suggested by Gregory Mankiw in his Principles of Economics.
Modern economists do not drift much in their definitions. Some of the older definitions may look different at first glance, for example Jean Baptiste-Say’s definition of economics as the “science” that deals with “the production, distribution and consumption of wealth”. However, in practice, the differences are more negligible and do not have a significant effect on the specificity of the economy we are discussing here. If anyone wants to know more or want to verify my claims regarding these definitions, I suggest the article by Steven Medema and Roger Backhouse titled “Retrospectives: On the Definition of Economics”.
The second argument is that economics is a way for the wealthy to provide elegant reasoning to justify their wealth. If you have an economic theory that glorifies the concentration of wealth, they say, then you are not immoral, you are doing a valuable service to society. This is not the case. Today, the topic of inequality is prevalent in economic circles with the likes of Amartya Sen and Thomas Piketty in the lead. Piketty, though a self-proclaimed socialist, is by no means a pariah in the economic community. Economics has become a form of propaganda in the same way as history, sociology, anthropology or any other field of social sciences.
Someone can be quick to say, “Yes, but that’s only happening now that people are more sensitive to inequality.” I advise anyone who says this to read a little more about the history of political economy. Economics has often been a very revolutionary tool, one example immediately springs to mind. The Anti Corn League led by British businessman Richard Cobden who fought hard to repeal the Corn Laws. These laws prohibited the importation of wheat and protected the interests of British landowners by raising prices. There are a plethora of similar people like Henry George in his movement for the single tax, Benjamin Constant in the French Revolution and Frédéric Bastiat, as a member of the French Legislative Assembly in 1849.
Economists can change their minds if enough reasoning has been provided. Societies have moved from mercantilism to free trade and David Ricardo’s comparative advantage, from labor theory of value to marginalism. This does not mean that economics follows a straight line of steady progress, but it does mean the possibility of a radical change in discipline and the absence of historical determinism towards free market policies.
In short, the economy is not inherently capitalist. It can change direction if sufficient reasoning has been provided. Economics is not by definition capitalist, it is the study of the allocation of resources and in this regard is politically neutral. It is also not a tool to justify power and wealth, although it has been used many times as justification by the powerful.
Chris Loukas was born in Greece and is an economics journalist and the youngest member of the Greek team for the International Economics Olympiad for 2022. His articles have been featured by the Foundation for Economic Education, the Mises Institute and Adam Smith Works.