Extract

This chapter presents some final remarks concerning a number of topics that have a central place in the book. They essentially relate to the problem of realism in economic theorizing. 9.1 THE ‘ECONOMIC MACHINE’: THE SCIENTIFIC DISCOVERIES OF MARX AND KEYNES Classical political economists developed and used the concept of the ‘economic machine’.1 This machine works according to laws which can be understood and studied in a scientific way. They regulate the process by which the machine reproduces itself and grows, and this process fundamentally represents the general (social) interest because all actors within the system (individuals or, rather, social classes) benefit from it. In this framework, each class pursues its own specific interests and, in doing so, it acts in the general interest as well. In other words, there is a fundamental convergence of individual interests and the general interest. In particular, the capitalist class in pursuing its interest enables the machine to reproduce and grow and, as a result, to provide benefits for all. The laws that regulate the working of the machine force individual capitalists to behave in this way. Adam Smith was the classical economist who was most firmly convinced of all this.2 Marx, too, believed that the economy and the social system can be regarded as a gigantic machine, but he also brought a fundamental new insight; namely, that this machine cannot possibly work without using money, which performs several different roles. Once money is introduced, the analytical picture is radically...