Second Thoughts on Classical Economics
Looking back on a previous blog post on Marxism, I realize how my views
on the classical economists have changed. Over the past few months, I have tried to rigorously study various interpretations of the classical economists, with an
emphasis on Ricardo and the Sraffian interpretation of him. With this
study, I have come to realize that my previous criticisms were
ill-founded or, at least, questionable.
The classical system is based on entirely different
methodological foundations than the marginalist system of analysis. In
fact, it’s plausible to interpret the classical as having an entirely
different aim and purpose for economics. They rejected methodological
individualism. They treated population as an endogenous variable. They
only cared about natural values, as opposed to market prices. These can be interpreted as being different than long period prices. Suffice to say,
given their foundational concerns and methodology, the system they built
was surprisingly elegant. Even the labor theory of value can be seen as
useful and semi-plausible when examined as part of this paradigm.
With that said, we can still criticize the classical economists by
critiquing their foundations. Austrian economics gives an explanation of
the real world. Classical economics has a much harder time making that
claim.