It has often been claimed that economics has a bias 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 towards promoting the interests of the capitalist class.

The first argument is that economics is by definition pro-capitalist since it explores how a market society works. This argument is false on two grounds. One, economists study all kinds of societies, free market societies like ours, socialist, agrarian, feudal, and more. Even in books by radicals like Rothbard’s  Man, Economy and State there is an unusually extensive discussion of resource allocation in societies without money (though almost all such discussions are highly critical). Two, the definition of economics is almost always something along the lines of “the study of how a society manages its scarce resources,” as Gregory Mankiw has suggested in his Principles of Economics.

Modern economists do not drift much in their definitions. Some of the older definitions may appear different at first glance, for example Jean Baptiste-Say’s definition of economics as the “science” that treats “the production, distribution and consumption of wealth”. However, in practice the differences are more negligible and do not have a significant effect on the specific characteristic of economics that we are discussing here. If someone wishes to learn more or wants 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 rich to provide elegant reasoning to justify their wealth. If you have an economics theory that glorifies the concentration of wealth, they say, then you are not immoral, you are providing a valuable service to society. This is not the case. Today the topic of inequality is prevalent in economic circles with figures such as Amartya Sen and Thomas Piketty leading the way. Piketty, although a self-proclaimed socialist, is by no means an outcast in the economics community. Economics has become as much a form of propaganda as is history, sociology, anthropology or any other field in the social sciences.

Someone may be quick to say “Yes but this only happens now that people are more sensitive about inequalities”. I advise anyone saying so to read a bit more on the history of political economy. Economics has many times been a very revolutionary tool, one example instantly comes to mind. The Anti Corn League led by the British businessman Richard Cobden who fought hard to repeal the Corn Laws. These laws prohibited the import of wheat and protected the interests of the British landlords by raising prices.  There is a plethora of similar people like Henry George in his Single Tax movement, Benjamin Constant in the French Revolution and Frederic Bastiat, as a member of the French Legislative Assembly in 1849.

Economists can change their mind if sufficient reasoning has been provided. Societies have moved from mercantilism  to free trade and David Ricardo’s comparative advantage, from the labor theory of value to marginalism. This does not mean that economics follows a straight line of constant progress, but it signifies the possibility of radical change in the discipline and the lack of a historical determinism toward free market policies.

To sum up, economics is not inherently capitalist. It can shift direction if sufficient reasoning has been provided. Economics is not by definition capitalist, it is the study of resource allocation and to this regard is politically neutral. It is neither a tool to justify power and wealth, despite having been repeatedly used as justification by the powerful.

 

Chris Loukas was born in Greece and is an economic journalist and the youngest member of the Greek team in the international Economics Olympiad for 2022. His articles have been featured by the Foundation for Economic Education, the Mises Institute and Adam Smith Works.