Rethinking critical realism 125 Rethinking critical realism: Labour markets or capitalism? Ben Fine Earlier debate on critical realism has suggested the need for it to situate itself more fully in relation to both economic theory in general, and Marxist political economy in general. This is borne out in the following critique of Fleetwood's contribution on the subject of labour markets, which, it is argued, is insufficiently attentive to recent developments in mainstream labour-market theory, considerably undervalues the contributions made from within the Marxist tradition, and offers an alternative that fails to specify the extent to which labour markets are inextricably linked to the political economy of capitalism. It is both apposite and coincidental that Fleetwood s (2006) critical-realist approach to labour markets Rethinking labour markets: A critical-realist socioeconomic perspective should have appeared in Capital & Class alongside the debate, in issue 89, over critical realism itself (Nielsen & Morgan [2006], Fine [2006a]). In that debate I concluded with, and indeed reiterated (Fine, 2004) the following suggestions for critical realism. They were that it should seek: An explicit confrontation with, and critique of, economic theory. The construction of a political economy rooted in the categories of contemporary capitalism. A careful exposition of the meanings of structure, relation and tendency, etc., and of their interrelationships and their historical and social scope and variability. An explicit account of where it diverges from Marxism and Marxist political economy. How well has Fleetwood anticipated and addressed these concerns in his contribution?
126 Capital & Class #91 First, he does offer a critique of the mainstream, neoclassical economic theory of labour markets, not least in a section entitled Marshall-Hicks conditions as closure conditions. 1 But this does not get to grips at all with what is going on in the mainstream. There is no hint of the fact that the most important debate within the mainstream important both in itself and for its implications during the last decade and longer has been over the question of whether increasing the minimum wage does or does not decrease employment. This debate is part of a much wider transformation in mainstream economic theory (of labour markets). It is indicative of the economics imperialism that I have emphasised in the critical-realism debate, in which institutions (governing labour markets) are brought into account. This has allowed the mainstream to absorb what were previously seen to be the unacceptable elements within radical labour-market theory see Fine (1998) for a full, if now dated account. Thus, while Fleetwood commendably teases out some of the enduring deficiencies of mainstream economics from a methodological point of view, he only does so on the basis of total neglect of its most recent theoretical and empirical prognostications. As I have been at pains to argue more generally in relation to critical realism, this is a strategic error and even a liability, since it will offer little or no purchase in the debate with those working within, and even against the neoclassical paradigm, but who are open to wider considerations and alternative methods. My second demand might be thought to have been addressed by Fleetwood in his closing section, Preparing the ground for future work. But what stands out there and throughout the rest of his contribution is its appeal to universal categories of analysis labour markets themselves, social structures, etc. without once deploying the notion of capital or capitalism. This is simply bizarre, for how can we talk about labour markets in the absence of these categories? Instead, tellingly, we are offered the metaphor of a commuter. The third of my demands necessarily fails to be met by virtue of the previous point. But it is worth highlighting in this context, once again, the religious zeal with which critical realism polices others from its lofty position of methodological correctness. 2 With Fleetwood, it takes the particular form of pigeonholing non-mainstream approaches and charging them with the original sin of relying on a dualism
Rethinking critical realism 127 between labour markets and social structures. Fair enough; but simply take away that dualism and you have Fleetwood on labour markets a mish-mash of social structures and corresponding agents, but with no reference to the structures and tendencies of capitalism in general, let alone to their historically specific realisation. Indeed, it is simply a matter of employers and employees (p. 82). Fourth, and unfortunately for him, Fleetwood s critique of dualism within labour-market theory can be applied to much radical labour-market analysis, but it does not apply to Marxism or at least, not to Marxism properly under-stood. He recognises this virtue of Marxism, but only in a negative sense, offering a single paragraph on the labour-market theory of Marxist economists and referencing just two (p. 64). This is truly astonishing, since Marx himself might be thought not only to have made some sort of contribution to the understanding of capitalist labour markets, but also to have inspired many others to do so too. There is, for example, the whole body of labour-process literature, heavily promoted from within the cse, which continues to underpin a number of contributions and has even prompted new journals. Since I am one of the two contributors cited by Fleetwood (Fine, 1998), it seems worth even at the risk of self-indulgence violently summarising my contribution into a single paragraph as a riposte to the deficiencies of Fleetwood s assessment and alternative. 3 First and foremost, labour markets must be understood as, but not reduced to the more complex forms of the capital labour relationship essential to the capitalist mode of production. Second, that relationship is structured, reproduced and transformed through the formation of the value of labour power a key category of Marxist political economy. Third, the value of labour power is determined through the accumulation of capital (and, for example, the production of relative surplus value), and through the partly corresponding socioeconomic determinants of the elements of consumption and reproduction, whether market-sourced or otherwise (the moral and historical factor). Fourth, an abstract analysis of the capitalist mode of production can identify multifarious economic and social structures, and tendencies through which these two aspects of the value of labour power are determined. But the way in which labour markets are formed, and the question of what interacts in order to form them, is historically specific (the South African
128 Capital & Class #91 migrant mining labour market, for example, as opposed to fast-food workers in the contemporary usa). Fifth, this means that there is no such thing as the labour market. Rather, labour markets are structured and function differently from one another (including those that are not organised for capitalist profit), and are conditioned differently from one another by common factors in their economic and social reproduction. In other words, labour markets are complex and concrete (and shifting) categories that incorporate a full range of socioeconomic relations, structures and tendencies. These are not free-floating they do not form an 'open system' but are part and parcel of the historically specific forms of capitalism and its associated imperatives. How can we even talk about labour markets, a unique product of capitalism, without an analysis of capital and a critical application of the categories of political economy, not least that of value theory. Does critical realism agree or not? Notes 1. I would like to take the opportunity to add two new criticisms of and to critical realism s critique of the mainstream as deductive. First, it has overlooked the fact that while deductivism is of huge importance to the mainstream, it is not paramount. Rather, whenever deductivism yields unpalatable results it is sacrificed in deference to a prior and higher commitment to other techniques to production and utility functions, for example. This is transparent in terms of the reaction to (i.e. neglect of) the Cambridge critique ; Arrow s impossibility theorem; the existence, uniqueness and stability of general equilibrium; factor reversal in trade theory; the theory of second best, etc. (Moscati, 2005; Fine & Milonakis, 2007). Second, the mainstream s deductivism is itself flawed in that it fails to acknowledge the problems recognised within (the philosophy of) mathematics itself as a logical system, and in its application to the real world. This concerns Russell s paradoxes and the illegitimacy of unquestioningly deploying individual and collective categories together, even formally (Fine, 2006b, 2006c). If critical realism had extended its critique of deductivism to economic theory as it was implored to do, possibly it might have discovered these intrinsic problems for the mainstream within deductivism itself.
Rethinking critical realism 129 2. Polices or pigeonholes. In a remarkable contribution, Lawson (2006) essentially argues both that all heterodox economics is, knowingly or not, critical realist; and that different schools are only thereby distinguished by their specific focus of analysis. Where does this leave Marxist political economy, which is notable for its absence from his selective discussion across heterodox schools? See Fine (2007) for a critique. 3. See also Fine, 1992, 2003. References Fine, B. (1992) Women s Employment and the Capitalist Family (Routledge); also available online for purchase as an electronic publication. (1998) Labour Market Theory: A Constructive Reassessment (Routledge). (2003) Contesting labour markets in A. Saad-Filho (ed.) Anti-Capitalism: A Marxist Introduction (Pluto Press). (2004) Addressing the critical and the real in critical realism in P. Lewis (ed.) Transforming Economics: Perspectives on the Critical Realist Project (Routledge). (2006a) Debating critical realism in economics in Capital & Class, no. 89, pp. 121 29. (2006b) The general impossibility of the new institutional economics: or, Does Bertrand Russell deserve a Nobel prize for economics? mimeo, available from author. (2006c) Identity matters: What contribution can economics make? mimeo, available from author. Fine, B. & D. Milonakis (forthcoming [2007]) From Political Economy to Freakonomics: Method, the Social and the Historical in the Evolution of Economic Theory (Routledge). Fine, B. (forthcoming [2007]) Critical realism and heterodoxy, mimeo, to be available from author. Fleetwood, S. (2006) Rethinking labour markets: A criticalrealist socioeconomic perspective in Capital & Class, no. 89, pp. 59 89. Lawson, T. (2006) The nature of heterodox economics in Cambridge Journal of Economics, vol. 30, no. 4, pp. 483 505. Lewis, P. (ed.) (2004) Transforming Economics: Perspectives on the Critical Realist Project (Routledge). Moscati, I. (2005) History of consumer demand theory, 1871 1971: A neo-kantian rational reconstruction (Università Bocconi, Milan) mimeo. Nielsen, P. & J. Morgan (2006) From mainstream economics to the boundaries of Marxism in Capital & Class, no. 89, pp. 91 120. Saad-Filho, A. (ed.) (2003) Anti-Capitalism: A Marxist Introduction (Pluto Press).
130 Capital & Class #91 Special Issue Coming Soon! REVIEW OF RADICAL POLITICAL ECONOMICS Published in Association with the Union for Radical Political Economics Volume 39, Issue 2 Radical Political Economy of Consumption Available in June 2007! Although more recent theoretical commentaries have emphasized the need to incorporate richer conceptions of the agency of consumers, both the spread of consumerism beyond the wealthy West and the intensification of international inequalities have only served to further highlight the implications of consumerism for exploitation, social conflict, and environmental non-sustainability on a global scale today. This special issue of Review of Radical Political Economics provides useful discussions of a number of recent trends and issues in the patterns of capitalist consumption, as well as much needed attention to an area of radical social theorizing that has been largely neglected by this journal until now. To order your copy of this special issue, call 1-800-818-7243 or email journals@sagepub.com SAGE Publications Inc. 2455 Teller Road Thousand Oaks, CA 91320, U.S.A. Tel: (800) 818-7243 (805) 499-9774 Fax: (800) 583-2665 (805) 499-0871 Email: journals@sagepub.com SAGE Publications Ltd. 1 Oliver s Yard, 55 City Road London EC1Y 1SP, U.K. Tel: +44 (0)20 7324 8500 Fax: +44 (0)20 7324 8600 Email: subscriptions@sagepub.co.uk HJ0601205/1064112