Radical Economics

Opposition to the capitalist-market economy centers on three problems: (a) inequality of the distributions of income and wealth; (b) insecurity of the standard of living against downward shocks, both cyclical and long term; and (c) incompatibility with physical and mental health. The major problem is psychological alienation. Alienation takes many forms and explains many forms of social pathology, ranging from boredom to violent crime.

Marxism is an integrated, unified system of social philosophy, including both economic statics and economic dynamics, and culminating in certain "laws of motion of capitalism."

While admitting the accomplishments of the Industrial Revolution, Marxian economics uses a strict labor theory of value to develop certain "contradictions of capitalism. " In its Marxian form this theory develops ideas about the exploitation of the worker and the receipt of surplus value by the capitalist class.

In the economic dynamics of Marx's theories, the contradictions of capitalism lead to "increasing misery " and to the eventual downfall of capitalism, either because a falling rate of profit leads to a liquidity crisis or because a tendency toward overproduction leads to a realization crisis.

Marxian analysis leaves no important role for monetary and fiscal policy. Also, the labor theory of value does not deal with demand and utility as determinants of value. 

Radicalism may be radical either because of what it proposes to accomplish, as in "a radical restructuring of society, " or because of the tactics that it considers legitimate to accomplish these ends, which sometimes include illegality, violence, dictatorship, and the disregard of public opinion by a tightly organized political party.

The American New Left arose in the early 1960s as a search for unity on the political Left. Disunity of the Old Left was blamed for the rise of fascism in the period between World War I and World War 11 and McCarthyism in the 1950s. It is not an exclusively radical movement, but its leadership is for the most part radical. It has lost importance since 1970, but keeps trying for revival using new issues in domestic and foreign policy.

The radical groups within the New Left are all collectivist. They favor collective ownership of the means of production. Subdivisions are anarchist, socialist, and syndicalist. 

The anarchist wing of the New Left can be subdivided into the "counterculture, " which withdraws from the mainstream of society into communes, and the revolutionary wing, which pro poses tearing down institutions and then possibly starting over.

Terrorism is a set of violent tactics, which can be used by partisans of a great variety of political, religious, racial, economic, or social positions, but it is not itself a category of economic thought. tt is a great mistake to associate terrorism exclusively with any economic philosophy-radical or conservative, old or new, Right or Left.

Socialists favor state ownership of the means of production. The socialist wing of the New Left can be subdivided into neo-Stalinist imperative planners and "Marxist humanists, " who emphasize equality, mass participation in decision making, and moral (rather than material) incentives.

Syndicalists favor ownership by trade unions of the workers. They believe that unions can bring down capitalism by winning strikes. Unions would be immune from lawsuits and could break all contracts.

The economic New Right concentrates on achieving laisser-faire; the ethical-religious New Right, on re-establishing the old-time religion and morality, and the political New Right on thwarting alleged communist conspiracies to dominate the world. These three groups overlap to some extent, and only the first is relevant to our study of economics. It includes both libertarians and objectivists.

 Libertarians are, ideologically speaking, the most radical branch of the economic New Right- They favor complete reliance on the free capitalist market and hope for the demise of the political state. They are distinguished from collectivist anarchists by their beliefs in private enterprise and private property.

Objectivists believe that our most nearly objective knowledge of the "good" and the "just" is our knowledge of what is good for ourselves. We should follow this knowledge rather than the urgings of ethical altruism, which is often a cover for dishonesty. 

Objectivists are impressed with the contribution to society of the few superior individuals. They fear that human evolution toward some ideal will be sidetracked if such people are restricted or if inferiors are helped to survive and reproduce. To this extent objectivists are Social Darwinists, applying the principle of "survival of the fittest" to social as well as biological relations.