Second Thoughts on Classical Economics

Looking back on a previous blog post on Marxism, I realize how my views on the classical 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. 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 (although perhaps unnecessary) 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.