97 I JAARGANG 45 NUMMER 2 I ZOMER 2011 Competing Theories: Wrong or Not Even Wrong? Paul Cockshott Wetenschapstheorie 1. Intellectual background 1.1 The cringe From the start of the 20th century up until the end of the 1970s Marxists had great in- tellectual self confdence. They saw them- selves as the wave of the future, not just in the development of society but also in the realm of ideas. The economic system they advocated seemed to be going from strength to strength. Increasing areas of the world were won by communist revolutio- nary movements. Marxism had political power, economic success and science be- hind it and seemed bound to triumph. The political setbacks of the 1980s dented this self confdence. An alternative econo- mic programme came to dominance – that of neo-liberalism. First in Chile, next in the Anglo Saxon countries and then in Eastern Europe liberal economic policies and doc- trines rose to power. The response of some Marxists was to change sides and, with the enthusiasm of new converts, to adopt the doctrines of their former opponents 1 . Some others on the left, whilst remaining opposed to the doctrines of neo-liberalism, became skeptical about what had previously been taken to be key components of Marxian economics such as the labour theory of value 2 . The neo-libe- rals had laid claim both to scientifcity in economics and to the best policy proposals and this caught the left on the back foot, unsure where to tread next. 1.2 Education and the scientifc method Liberal economics has been able to claim scientifcity based both on the large and sophisticated mathematical apparatus of neoclassical value theory, and on a vast number of detailed econometric studies. Those who are professionally involved in the subject are expected to be mathemati- cally literate and experienced in the ana- lysis of statistical data. These aspects of their training means that their background has in some ways more in common with people who are trained as natural scientists than with other social scientists. There has also been a long tradition of economists borrowing conceptual structures from the natural sciences. Mirowski showed that many of the concepts used in marginalist economics were borrowed directly from classical mechanics during the late 19th century[Mir89]. But there is, I think, a signifcant difference between the way the natural sciences are taught and the way neo-classical economics is taught, and this difference is signifcant. When a student is taught an introductory course in physics or biology, they are both taught theories and told of the crucial ex- periments that validated the theories. They are told of Galileo’s experiment that vali- dated what we would now see as the equi- valence of gravitational and inertial mass. They learn of Michelson Morley’s expe- riment on the invariance of the speed of light, that inconvenient fact whose expla- nation required Special Relativity. Biology students hear of the experiments of Pasteur and Koch that established the germ theory of disease, etc. The function of these ac- counts in science education is twofold. On the one hand they emphasize to students the reasons why they should give credence to the theory being taught, on the other, these historical examples are used to teach the scientifc method. If one contrasts this with introductory courses in economics one sees that whilst theory is taught, the student gets no equi- valent history of crucial economic observa- tions in order to support the theory. This is no accident. No history of crucial observations is taught, because there is no such history. 1.3 Failure of orthodox economics to re- late to empirical data In science an experimentum crucis serves to discriminate between competing hypo- theses or to show the inadequacy of a pre- viously dominant theory. The crucial diffe- rence between neo-classical economics and the classical school of political economy lay in their theories of value. The classical school, from Smith to Marx, had adhered to a labour theory of value which neo-clas- sical economics replaced with marginal utility theory 3 . But one would search the history of economics in vain were one to look for the crucial experiment or observa- tion which disproved the labour theory of value. There was none. After Koch and Pasteur, the miasma theory of disease died out. It was completely re- placed by the germ theory, whose greater practical effectiveness as a guide to public health measures was no longer in doubt. But after Jevons and Menger, the labour theory of value did not by any means die out. It continued to spread and gain infu- ence, becoming the orthodoxy in the USSR and other socialist countries in the middle of the 20th century. Where and when a particular theory dominated owed a lot to politics, a little to aesthetics and nothing to observation. Maths can be seductive.