What Is Economics?

Official scientific defenders of capital's rule attempt to obscure the entire matter.

Image: Light Chaos by Kevin Dooley (flickr, adapted) + Rosa Luxemburg (Wikimedia Commons)

Most professors of economics reveal their own "muddleheadedness" about economics by expressing themselves "in an obscure and rambling manner", Luxemburg argues. But they also have "a motive for avoiding clarity". As "official scientific defenders of capital's rule" bourgeois economists find it impossible "to acknowledge that anarchy is the vital motive force of the rule of capital". An extract from Rosa Luxemburg Speaks.

Originally published as the chapter "What is Economics?" in Rosa Luxemburg Speaksbased on lectures given at the party school of the SPD between 1907-12. A few pages from the chapter are skipped. Hyperlinks in text added by SE.
About the author (click)
Rosa Luxemburg (1871-1919) was a Polish-German marxist economist, revolutionary socialist and active in several political organizations and political parties. She wrote a number of books among which The Accumulation of Capital (1913) on economics. She was captured and killed by the German Freikorps in 1919 during the German Revolution of 1918-19.

conomics is a peculiar science. Problems and controversies arise as soon as we take the first step in this field of knowledge, as soon as the fundamental question - what is the subject matter of this science - is posed. The ordinary working man, who has only a very vague idea of what economics deals with, will attribute his haziness on this particular point to a shortcoming in his general education. Yet, in a certain sense, he shares his perplexity with many learned scholars and professors who write multivolumed works dealing with the subject of economics and who teach courses in economics to college students. It appears incredible, and yet it is true, that most professors of economics have a very nebulous idea of the actual subject matter of their erudition.

Since it is common usage among these professors adorned with academic titles and honors to operate with definitions, that is, to try to exhaust the essence of the most complex phenomena in a few neatly arranged sentences, let us experiment for a moment and attempt to learn from a representative of official bourgeois economics what essential topics this science deals with. Let us consult first of all the head of the German professorial world, the author of an immense number of frightfully huge textbooks dealing with economics, the founder of the so-called historical school of economics, Wilhelm Roscher. In his first big work, entitled The Principles of Political Economy, a Handbook and Textbook for Businessmen and Students, which was first published in 1854 but which has run through twenty-three editions since then, we read as follows, in chapter 2, section 16:

By the science of national, or political economy, we understand the science which has to do with the laws of development of the economy of a nation, or with its economic national life (philosophy of the history of political economy, according to von Mangoldt). Like all the political sciences, or sciences of national life, it is connected, on the one hand, with the consideration of the individual man, and on the other, it extends its investigation to the whole of human kind" (p. 87).

Do the "businessmen and students" now understand what economics is? Why, economics is the science having to do with economic life. What are horn-rimmed glasses? Glasses with rims of horn, of course. What is a pack mule? Why, it is a mule with a pack! As a matter of fact, this is a good way to explain the meaning of more complex words to infants. It is a pity, however, that if you did not understand the meaning of the words in question in the first place that you will not be any wiser whether the words are arranged this way or that way.

Let us consult another German scholar, the present instructor in economics at the University of Berlin, a veritable shining light of official science, famous "throughout the length and the breadth of the land" - as the saying goes - Professor Schmoller. In an article on economics to be found in that large compendium of German professors, The Hand Dictionary of Political Sciences, published by Professors Conrad and Lexis, Schmoller answers us as follows:

I would say that it is the science which is to describe, define, and elucidate the causes of economic phenomena, and also to comprehend them in their interrelations. This supposes, of course, that economics is defined correctly in the first place. In the center of this science we must place the typical forms, repeated among all of the modern cultured peoples, of the division and organization of labor, of commerce, of the distribution of income, of socioeconomic institutions which, supported by certain kinds of private and public law and dominated by the same or similar psychic forces, generate the same or similar arrangements of forces, which, in their complete description, would present the statistics of the present economic civilized world - a sort of average condition of the latter. Continuing from there, the science has attempted to ascertain the differences among the various national economies, one in comparison to the others, the various types of organization here and elsewhere; it has asked in what relation and in what sequence the various forms appear and has thus arrived at the conception of the causal development of these different forms, one from the other, and the historical sequence of economic conditions. And as it has, from the very beginning, arrived at the affirmation of ideals by means of moral and historical value judgments, so it has maintained, to a certain extent, this practical function to the present. Besides theory, economics has always propagated practical principles for everyday living."

Whew! Let's take a deep breath. How was that again? Socioeconomic institutions - private and public law-psychic forces - similar and same - same and similar - statistics - statics - dynamics - average conditions - causal development - moral-historical value judgments. . . . An ordinary mortal reading this passage can't help wondering why his head is spinning like a top. With blind faith in the professorial wisdom being dispensed here, and in stubborn pursuit of knowledge, one might try to decipher this jumble two times, maybe three times - with an effort, but we are afraid it would be in vain. It is but hollow phraseology and pompous prattle which we are being handed. And this in itself is an infallible sign. If you think soundly and if you have thoroughly mastered the subject under consideration, you will express yourself concisely and intelligibly. When you are not dealing with the intellectual gymnastics of philosophy or the phantasmagoric ghosts of religious mysticism, and you still express yourself in an obscure and rambling manner, you reveal that you are in the dark yourself - or that you have a motive for avoiding clarity. We shall see later that the obscurantist and perplexing terminology of the bourgeois professors is no accident, that it expresses not merely their own muddleheadedness, but also their tendentious and tenacious aversion of a real analysis of the question which we are considering.

Note from SE: skipping a few pages here. A short summary of the skipped pages (click)
The pages 224-236 from this version of the chapter "What is economics?" are left out (and an even longer version included even more material). They include a very interesting but rather long discussion of the nature of pre-capitalist economies, from the Scottish Highlands in the 1850s to the Medieval "household of Charlemagne", and the nature of the capitalist economy which emerged later.

The main point is to show why there was no need for an economic science before but there is one now.

Firstly, she argues that "economic relations manifest an astonishing simplicity and transparency" in pre-capitalist times for which there was no real need for an economic science to explain them. Self-sufficient families and Medieval lords understood very well how production and distribution took place, Luxemburg argues. "We shall find in it no riddles - to be understood only by thoughtful analysis, by a special science".

She then shows how complicated economic relations have become in "present economic life". Luxemburg explains how phenomena like economic crises and unemployment and price fluctuations (influencing the income distribution) are problems which no one consciously creates but still occur "periodically with the regularity of a natural phenomenon". They are economic riddles which "can be analyzed only by scientific investigation". On page 236: "It has become necessary to solve all these riddles by strenuous research, deep thought, analysis, analogy to probe the hidden relations which give rise to the fact that the result of the economic activity of man does not correspond to his intentions, to his volition-in short, to his consciousness. In this manner the problem faced by scientific investigation becomes defined as the lack of human consciousness in the economic life of society, and here we have reached the immediate reason for the birth of economics."

Let us consider a Greek Oikos, a slave household economy of antiquity, an economy which actually did form a "microcosm," a small world by itself. Here, we will be able to observe great social inequalities. Primitive poverty has given way to a comfortable surplus of the fruits of human labor. Physical labor has become the damnation of one, idleness the privilege of the other; the worker has become the personal property of the nonworker. But even this master-and-slave relation yields the strictest planfulness and organization of the economy, of the labor process, of distribution. The despotic will of the master is its base, the whip of the slave driver its sanction.

In the feudal manor of the Middle Ages the despotic organization of economic life very early assumes the forms of a traditional detailed work code in which the planning and the division of labor, the duties and the rights of each are clearly and rigidly defined. On the threshold of this era in history stands the pretty document which we have considered above, the Capitulare de Villis by Charlemagne, which still exudes cheerfulness and good humor and revels voluptuously in the abundance of physical delights, the production of which is the sole purpose of economic life. At the end of the feudal period in history, we see that ominous code of labor services and money payments imposed by the feudal lords in their greed for money - a code which gave rise to the German Peasant Wars of the fifteenth century and which, two hundred years later, reduced the French peasant to that miserable beastlike being who would be aroused to fight for his civil rights only by the shrill tocsin of the Great French Revolution. But as long as the broom of the revolution had not swept away this feudal rubbish, then, in all of its wretchedness, the direct master-and-bondsman relation clearly and rigidly determined the conditions of feudal economy - like fate preordained.

Today, we know no masters, no slaves, no feudal lords, no bondsmen. Liberty and equality before the law have removed all despotic relations, at least in the older bourgeois states; in the colonies - as is commonly known - slavery and bondage are introduced, frequently enough for the first time, by these same states. But where the bourgeoisie is at home, free competition rules as the sole law of economic relations and any plan, any organization has disappeared from the economy. Of course, if we look into separate private enterprises, into a modern factory or a large complex of factories and workshops, like Krupp or a large-scale capitalist farm enterprise in North America, then we shall find the strictest organization, the most detailed division of labor, the most cunning planfulness based on the latest scientific information. Here, everything flows smoothly, as if arranged by magic, managed by one will, by one consciousness. But no sooner do we leave the factory or the large farm behind, when chaos surrounds us. While the innumerable units - and today a private enterprise, even the most gigantic, is only a fragment of the great economic structure which embraces the entire globe - while these units are disciplined to the utmost, the entity of all the so-called national economies, i.e., world economy, is completely unorganized. In the entity which embraces oceans and continents, there is no planning, no consciousness, no regulation, only the blind clash of unknown, unrestrained forces playing a capricious game with the economic destiny of man. Of course, even today, an all-powerful ruler dominates all working men, and women: capital. But the form which this sovereignty of capital takes is not despotism but anarchy.

And it is precisely this anarchy which is responsible for the fact that the economy of human society produces results which are mysterious and unpredictable to the people involved. Its anarchy is what makes the economic life of mankind something unknown, alien, uncontrollable - the laws of which we must find in the same manner in which we analyze the phenomena of external nature - the same manner in which we have to attempt to comprehend the laws governing the life of the plant and animal kingdom, the geologic formations on the earth's surface, and the movements of the heavenly bodies. Scientific analysis must discover ex post facto that purposefulness and those rules governing human economic life which conscious planfulness did not impose on it beforehand.

It should be clear by now why the bourgeois economists find it impossible to point out the essence of their science, to put the finger on the gaping wound in the social organism, to denounce its innate infirmity. To recognize and to acknowledge that anarchy is the vital motive force of the rule of capital is to pronounce its death sentence in the same breath, to assert that its days are numbered. It becomes clear why the official scientific defenders of capital's rule attempt to obscure the entire matter with all kinds of semantic artifices, try to direct the investigation away from the core of the subject, take up mere external appearances and discuss "national economy" instead of the world economy. At the very first step over the threshold of economic understanding, even with the first basic premise of economics, bourgeois and proletarian economics experience a parting of the ways. With the very first question - as abstract and as impractical as it might seem at first glance in connection with the social struggles taking place today - a special bond is forged between economics as a science and the modern proletariat as a revolutionary class. 



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