Economism
Encyclopedia
Economism is a term used to describe economic reductionism
, that is the reduction of all social fact
s to economical dimensions. It is also used to criticize economics as an ideology
, in which supply and demand
are the only important factors in decisions, and outstrip or permit ignoring literally all other factors. It is believed to be a side effect of neoclassical economics
and blind faith in an "invisible hand
" or "laissez-faire
" means of making decisions, extended far beyond controlled and regulated markets, and used to make political and military decisions. Conventional ethics
would play no role in decisions under pure economism, except insofar as supply would be withheld, demand curtailed, by moral choices of individuals. Thus, critics of economism insist on political
and other cultural
dimensions in society
.
The term of "economism" has been widely used in the Marxist discourse since Lenin who criticized Karl Kautsky
. Marxist theorists
have also often criticized "vulgar Marxism" for its economism about ideological discourse. It was also used by economist Charles Bettelheim
, and is sometimes used today to criticize neoliberalism
(as the term "single thought").
Old Right
social critic Albert Jay Nock
used the term more broadly, denoting a moral and social philosophy "which interprets the whole sum of human life in terms of the production, acquisition, and distribution of wealth". He went on to say "I have sometimes thought that here may be the rock on which Western civilization will finally shatter itself. Economism can build a society which is rich, prosperous, powerful, even one which has a reasonably wide diffusion of material well-being. It can not build one which is lovely, one which has savor and depth, and which exercises the irresistible power of attraction that loveliness wields. Perhaps by the time economism has run its course the society it has built may be tired of itself, bored of its own hideousness, and may despairingly consent to annihilation, aware that it is too ugly to be let live any longer." (Memoirs Of A Superfluous Man, pg. 147)
Economism should not be confused with economic determinism
, the belief that measurable economic circumstances drive all human psychology and choices. While determinism
is a necessary aspect of the ideology of economism, it is not sufficient to explain why people would seek to predict, via economic curve making, what they could choose to change. Economism does not seem to permit any escape from the "inevitable" impacts of "free market" dynamics: there is no viable escape route other than submission to a system of valuation
, pricing
, and open bidding, which are exactly those systems that Karl Marx
claimed led to a systematic oppression through his critique of commodity fetishism
, and Joseph Schumpeter
argued would cause free market systems to lose public support.
Reductionism
Reductionism can mean either an approach to understanding the nature of complex things by reducing them to the interactions of their parts, or to simpler or more fundamental things or a philosophical position that a complex system is nothing but the sum of its parts, and that an account of it can...
, that is the reduction of all social fact
Social fact
In sociology, social facts are the values, cultural norms, and social structures external to the individual and capable of exercising a constraint on that individual....
s to economical dimensions. It is also used to criticize economics as an ideology
Ideology
An ideology is a set of ideas that constitutes one's goals, expectations, and actions. An ideology can be thought of as a comprehensive vision, as a way of looking at things , as in common sense and several philosophical tendencies , or a set of ideas proposed by the dominant class of a society to...
, in which supply and demand
Supply and demand
Supply and demand is an economic model of price determination in a market. It concludes that in a competitive market, the unit price for a particular good will vary until it settles at a point where the quantity demanded by consumers will equal the quantity supplied by producers , resulting in an...
are the only important factors in decisions, and outstrip or permit ignoring literally all other factors. It is believed to be a side effect of neoclassical economics
Neoclassical economics
Neoclassical economics is a term variously used for approaches to economics focusing on the determination of prices, outputs, and income distributions in markets through supply and demand, often mediated through a hypothesized maximization of utility by income-constrained individuals and of profits...
and blind faith in an "invisible hand
Invisible hand
In economics, invisible hand or invisible hand of the market is the term economists use to describe the self-regulating nature of the marketplace. This is a metaphor first coined by the economist Adam Smith...
" or "laissez-faire
Laissez-faire
In economics, laissez-faire describes an environment in which transactions between private parties are free from state intervention, including restrictive regulations, taxes, tariffs and enforced monopolies....
" means of making decisions, extended far beyond controlled and regulated markets, and used to make political and military decisions. Conventional ethics
Ethics
Ethics, also known as moral philosophy, is a branch of philosophy that addresses questions about morality—that is, concepts such as good and evil, right and wrong, virtue and vice, justice and crime, etc.Major branches of ethics include:...
would play no role in decisions under pure economism, except insofar as supply would be withheld, demand curtailed, by moral choices of individuals. Thus, critics of economism insist on political
Politics
Politics is a process by which groups of people make collective decisions. The term is generally applied to the art or science of running governmental or state affairs, including behavior within civil governments, but also applies to institutions, fields, and special interest groups such as the...
and other cultural
Culture
Culture is a term that has many different inter-related meanings. For example, in 1952, Alfred Kroeber and Clyde Kluckhohn compiled a list of 164 definitions of "culture" in Culture: A Critical Review of Concepts and Definitions...
dimensions in society
Society
A society, or a human society, is a group of people related to each other through persistent relations, or a large social grouping sharing the same geographical or virtual territory, subject to the same political authority and dominant cultural expectations...
.
The term of "economism" has been widely used in the Marxist discourse since Lenin who criticized Karl Kautsky
Karl Kautsky
Karl Johann Kautsky was a Czech-German philosopher, journalist, and Marxist theoretician. Kautsky was recognized as among the most authoritative promulgators of Orthodox Marxism after the death of Friedrich Engels in 1895 until the coming of World War I in 1914 and was called by some the "Pope of...
. Marxist theorists
Marxist philosophy
Marxist philosophy or Marxist theory are terms that cover work in philosophy that is strongly influenced by Karl Marx's materialist approach to theory or that is written by Marxists...
have also often criticized "vulgar Marxism" for its economism about ideological discourse. It was also used by economist Charles Bettelheim
Charles Bettelheim
Charles Bettelheim was a French economist and historian, founder of the Center for the Study of Modes of Industrialization at the Sorbonne), economic advisor to the governments of several developing countries during the period of decolonization...
, and is sometimes used today to criticize neoliberalism
Neoliberalism
Neoliberalism is a market-driven approach to economic and social policy based on neoclassical theories of economics that emphasizes the efficiency of private enterprise, liberalized trade and relatively open markets, and therefore seeks to maximize the role of the private sector in determining the...
(as the term "single thought").
Old Right
Old Right (United States)
The Old Right was a conservative faction in the United States that opposed both New Deal domestic programs and U.S. entry into World War II. Many members of this faction were associated with the Republicans of the interwar years led by Robert Taft, but some were Democrats...
social critic Albert Jay Nock
Albert Jay Nock
Albert Jay Nock was an influential United States libertarian author, educational theorist, and social critic of the early and middle 20th century.- Life and work :...
used the term more broadly, denoting a moral and social philosophy "which interprets the whole sum of human life in terms of the production, acquisition, and distribution of wealth". He went on to say "I have sometimes thought that here may be the rock on which Western civilization will finally shatter itself. Economism can build a society which is rich, prosperous, powerful, even one which has a reasonably wide diffusion of material well-being. It can not build one which is lovely, one which has savor and depth, and which exercises the irresistible power of attraction that loveliness wields. Perhaps by the time economism has run its course the society it has built may be tired of itself, bored of its own hideousness, and may despairingly consent to annihilation, aware that it is too ugly to be let live any longer." (Memoirs Of A Superfluous Man, pg. 147)
Economism should not be confused with economic determinism
Economic determinism
Economic determinism is the theory which attributes primacy to the economic structure over politics in the development of human history. It is usually associated with the theories of Karl Marx, although many Marxist thinkers have dismissed plain and unilateral economic determinism as a form of...
, the belief that measurable economic circumstances drive all human psychology and choices. While determinism
Determinism
Determinism is the general philosophical thesis that states that for everything that happens there are conditions such that, given them, nothing else could happen. There are many versions of this thesis. Each of them rests upon various alleged connections, and interdependencies of things and...
is a necessary aspect of the ideology of economism, it is not sufficient to explain why people would seek to predict, via economic curve making, what they could choose to change. Economism does not seem to permit any escape from the "inevitable" impacts of "free market" dynamics: there is no viable escape route other than submission to a system of valuation
Valuation
-Economics:*Valuation , the determination of the economic value of an asset or liability**Real estate appraisal, sometimes called property valuation , the appraisal of land or buildings...
, pricing
Pricing
Pricing is the process of determining what a company will receive in exchange for its products. Pricing factors are manufacturing cost, market place, competition, market condition, and quality of product. Pricing is also a key variable in microeconomic price allocation theory. Pricing is a...
, and open bidding, which are exactly those systems that Karl Marx
Karl Marx
Karl Heinrich Marx was a German philosopher, economist, sociologist, historian, journalist, and revolutionary socialist. His ideas played a significant role in the development of social science and the socialist political movement...
claimed led to a systematic oppression through his critique of commodity fetishism
Commodity fetishism
In Marx's critique of political economy, commodity fetishism denotes the mystification of human relations said to arise out of the growth of market trade, when social relationships between people are expressed as, mediated by and transformed into, objectified relationships between things .The...
, and Joseph Schumpeter
Joseph Schumpeter
Joseph Alois Schumpeter was an Austrian-Hungarian-American economist and political scientist. He popularized the term "creative destruction" in economics.-Life:...
argued would cause free market systems to lose public support.