Neoclassical Economics & Postmodernist Philosophy:Two Academic Expressions of the Ruling Class By: Edward Liger SmithRead Now
The relations of production at the core of all human civilizations have an immense impact on the way that young people are educated, and history has shown that the ruling economic class of any society will attempt to control the education system in that society. The capitalist economic system, or mode of production, is no different in this respect when it comes to elementary and higher-level education. The American elementary education system, for example, was originally based upon the idea of “factory schools,” which emerged during the industrial revolution in order to give parents a place to send their children while they worked all day, and to train up a “punctual, docile, and sober” working class of the future. And honestly, it is fairly obvious that the elementary education system is still preparing the youth of our country for future 8+ hour workdays under the supervision of administrators. However, it’s not always as easy to see how capitalist relations of production and the ruling class influence our institutions of higher education.
Colleges were once thought to be places of free expression where new ideas are formulated and debated by the brightest minds in the nation. However, in the same way that elementary education was created to train the working class of the future, our institutions of higher education are largely designed inversely, to train the capitalist ideologues, managers, politicians, and ruling elites of the future. Far from indoctrinating the young adults of America with radical Marxism as Fox News would have you believe, colleges today are indoctrinating their students with neoclassical economics and postmodernist philosophy. Two ideologies which form the purest academic expressions of the capitalist ruling class and the basis of much of what is taught to college students today.
Prior to the emergence of the Neoclassical school, the Classical school of economics was the preferred intellectual tool of capitalist ideologues and propagandists. The Neoclassical school started to form in the mid-late 19th and early 20th centuries, and largely did so in response to the growing Marxist school that was coming to prominence around the same time. In 1867 Karl Marx had published his groundbreaking work of political economy Das Kapital Volume I, which in many ways brought classical economics to its conclusion. Using the work of the most prominent classical economists like Adam Smith and David Ricardo as the basis for his investigation, Marx took the classical school’s “labor theory of value” to its logical conclusions, answering many of the questions that classical economists had been grappling with for years, and systematically criticizing the systems devised by these economists to pinpoint where their analysis went astray. Using David Ricardo’s labor theory of value Marx mapped out exactly how capitalism produces and circulates value, and in doing so, discovered that capitalist relations of production themselves necessitate the exploitation of labor, accumulation of capital, constant expansion of markets, and much more. It became clear to capitalist ideologues at this point, and even more so after the posthumous publishing of Capital volumes II and III, that the labor theory of value would no longer be of much use in defending capitalism. Classical economics was mostly abandoned by the ruling class and many people today believe that Karl Marx actually invented the labor theory of value. The ruling class now needed a new theory of economics to argue that capitalism is necessary, eternal, and maximizes human flourishing.
Marx had shown in no uncertain terms that if labor is the source of all value in society, then capitalist accumulation necessitates the exploitation of that labor or else it would be impossible. And thus, the capitalists needed to toss out the labor theory of value in order to continue denying the exploitation of the working class, despite the fact that the theory had been accepted by economists for years prior. The neoclassical economists devised the “utility theory of value” as a way to displace the labor theory, which might as well be called the “subjective theory of value” because it suggests that all value is subjective, and rejects the possibility of any objective measurement of material economic value.
Whereas the labor theory measures a commodity's value by the amount of socially necessary labor time needed to produce it, utility theory considers the value of a commodity to be subjectively determined by the price that consumers are willing to pay for it, in relation to the amount of the commodity that is currently being supplied on the market. Marxist economics conceptualizes price as an imperfect way of quantifying and expressing the amount of labor value contained in a commodity, the neoclassical school sees price as an absolute expression of a commodities’ value that’s dependent on its utility, which is subjectively determined by the desires of consumers.
Unlike the labor theory of value, the utility or subjective theory is completely empirically untestable, a point which Marxist economist Paul Cockshott makes in his defense of the labor theory and critique of Alfred Marshall, who’s often considered the father of neoclassical economics. The neoclassicals consider consumer demand to be a primary determinant of commodity prices, but a commodity’s perceived utility is an entirely subjective factor which cannot be quantified, and thus cannot be measured or compared to other commodity values numerically. This is the opposite of labor theory which measures commodity values by the average quantity of labor time needed to produce it. The utility theory of value is entirely based on the subjective perceptions of consumers which can’t be quantified and thus can’t be compared to commodity prices. This means that neoclassical economists can never actually test their theory that consumer demand determines the price of a commodity, unlike labor time on the other hand, which correlates very closely to commodity prices (as we will discuss later). The subjective nature of the utility theory, or the subjective theory of value, has been very useful for the neoclassical ideologues who defend it and allege that it has disproved the labor theory.
Classical economics was originally an attempt to do with the economy what Isaac Newton had done with the natural world – use the scientific method to observe the system as closely as possible in order to decipher as best as possible its properties, motions, and laws. The economists identified human activity, i.e., human labor, to be the core source of value in all societies, as labor is the one ingredient needed to create and sell every commodity in existence. Once the source of value was determined, the economist's job became analyzing the nature of the system in which commodity values are produced, managed, distributed, accumulated, hoarded, etc. And by doing this Marx proved that the production and distribution of commodities is dominated by capitalists who don’t contribute any value themselves, and have the exclusive aim of producing surplus value by exploiting the labor of workers, which they can then take.
After Marx had shown this, the pro-capitalist economists needed to abandon this scientific Newtonian approach to studying the economy. While the labor theory explains a great deal about capitalism and the nature of exploitation, the utility theory is subjective, abstract, untestable, and says next to nothing about the regular operations of capitalism. It is a theory that’s so subjective and contains so little substance that it actually becomes difficult to argue against. Why try to explain the correlation between labor time and price to somebody who can always respond with “Nope, the subjective Supply and Demand curves that I drew to intersect a given price point on this graph determine the price.” Regardless of how you argue that price is determined, the neoclassical can always draw two curves through it and claim they are the true determinants of price. It is difficult to concisely refute the substance of a theory that contains no real substance.
In his critique of Alfred Marshall, Dr. Paul Cockshott rigorously examines the Supply and Demand curves that Alfred Marshall himself gave in his work, which is considered a foundational document for the neoclassical school. Cockshott turns the Demand curve given by Marshall into an algebraic equation and finds that the points on the curve have no material origin and are entirely senseless, as they were almost surely just made up and drawn arbitrarily by Marshall on a graph. Similar results are deduced in the analysis of the supply curve, showing that without a doubt this entire theory, foundational to the neoclassical school and modern economic thought, was pulled straight out of Alfred Marshall’s ass without a shred of real evidence attached to it.
Thinkers like Alfred Marshall and his much-revered disciple Milton Friedman generally believe that the point where the supply and demand curve intersect is called the equilibrium point, and the prices and quantities of all goods gravitate around this point, which results in a system of pricing and producing that maximizes societal well-being. When speaking about equilibrium Milton Friedman once said “I think the general equilibrium system is a beautiful work of art, it’s very valuable for students to learn it, and get a FEELING about the interrelationships of things, but there is no way it can be used in practice to analyze specific problems.” This can be interpreted as an admission that the equilibrium theory is nothing besides a propaganda tool to influence the minds of young students to think that the market can magically manage the incredibly complex capitalist economy, and distract from the reality that capitalism is riddled with contradictions and crises.
It’s clear to see how the theory of equilibrium directly conceals capitalism’s contradictions when we consider the labor market, because capitalism commodifies human labor power, that labor exists in a market which is available to capitalists to draw from. Thus, according to the utility theory, the intersection of the supply and demand curves on the graph not only determine the price of labor from the perspective of the capitalist, but this is also the wage of the worker, from the perspective of the person selling their labor power. And according to the neoclassicals the level of wages are always in “equilibrium” so long as the market remains “free.” No need to organize your workplace into a union to push for higher wages, or try to press the Government into raising the minimum wage, this would simply disrupt equilibrium! Says the neoclassical economist as he collects his paycheck from a corporate funded libertarian NGO. The theory of equilibrium takes away the contradiction at the very core of capitalism, the contradiction between capital and labor, and thus they remove the possibility for collective struggle by the laboring class against the capitalist class. Teaching this dogmatic and baseless idea to young people is the purpose of the equilibrium theory, as Milton Friedman said, it clearly has no real value in practice. Another neoclassical model that does nothing to explain the world.
Marxist economics identifies two different kinds of value that are contained within every commodity, the first being the quantitative measure of exchange value, and the second being the qualitative use-value. Exchange-value is a commodity's value when compared to all other commodities on the market and it is determined by the amount of human labor power expended in its production, which is expressed quantitatively in a numerical value called the price. The fact that every commodity has an exchange-value attached to it means that all commodities are commensurable, directly comparable, and exchangeable with each other. But price is only an imperfect expression of this exchange value, and thus an imperfect expression of the amount of human labor time used to produce every commodity. Differences in price and labor time stem from the reality that it is difficult to quantify concrete human labor and express it abstractly, which is what Marx dubs as the contradiction between concrete and abstract labor – a contradiction which is unresolvable under a capitalist mode of production.
The qualitative use-value contained in every commodity, on the other hand, is what distinguishes commodities from one another materially, in terms of their objective and tangible content. Unlike exchange-value, use-value is entirely subjective and is determined by the needs and desires of the individual buyer. There is no way to quantitatively measure and express numerically how useful a buyer will find a commodity to be, and thus it is impossible to quantify so-called consumer demand, it is a purely subjective value. However, that’s not to say that the use-value of a commodity is unimportant, and Marx recognized that every commodity must have a use-value or it won’t be sold on the market, because buyers will never purchase a product that they have no use for. Exchange-value and use-value exist simultaneously within every commodity that is produced and circulated in the capitalist mode of production.
It may be clear to some readers already that neoclassical economics simply takes the subjectively determined use-value of a commodity and claims that it somehow determines the price when related to the supply of that commodity on the Market. And as we said earlier, there is no way to test this theory with any kind of objective experiments or data analysis. On the other hand, Marxist economists like Paul Cockshott have tested the labor theory of value by calculating the amount of labor time in every industry and comparing it to the prices of commodities in that industry, then putting the data into a table to calculate the exact correlation between labor time and prices. The correlation comes out to about 94% - only offset by industries where monopolistic corporations that own large amounts of land are able to sell commodities at artificially inflated prices. The labor theory of value is objective, scientific, and testable, the utility theory of value might as well be considered commodity price astrology.
The neoclassical school also distinguishes itself from the classical and Marxist schools by tossing out any conception of history and historical development. If capitalism is shown to have a historical origin and a historically specific existence, then it can be implied that capitalism will also have an end and be replaced by a new historically specific mode of production. Thus, neoclassical economists find it most convenient to ignore the various modes of production that existed before capitalism and hyper focus on market transactions which they treat as universal, or existing within every society historically. In so doing, they can claim that humanity is naturally predisposed to market activity because the mystical forces of supply and demand always know best, and capitalism is thus portrayed as the pinnacle of human society and development, because it is the most highly developed form of commodity production and market activity.
Nothing can be done to improve upon the current system except to minimize the size of the Government, at least when it comes to doing things for poor and working people, and let the capitalists accumulate to no end as rapidly as possible. Any ill effects of the market are ignored, or explained away by economists who claim they stem from Government interference and inefficiencies which only hinders the efficiency of the market. It’s not the profit gouging healthcare corporations making billions of dollars selling healthcare as a commodity each year, says the “Mises Institute” (a well-funded neoclassical think tank that offers a graduate program in economics), it’s actually Medicare and Medicaid! Damn the mountains of empirical evidence that say Medicaid and Medicare expansions have greatly increased access to healthcare and show that a single payer public system would work even better! Empirical evidence means nothing to the immortal curves that Alfred Marshall pulled from his ass!
One of the most ludicrous products of this economic philosophy is what’s known as the “Economic Calculation Problem,” first laid out by the titan of neoclassical capitalist ideologues Ludwig Von Mises in 1920. His book Economic Calculation in the Socialist Commonwealth declares that it is actually impossible for humans to calculate a centrally planned economy which works as efficiently as the market. Perhaps Mr. Mises invented a time machine in order to travel to the future and observe the evolutions in technology, where he ignored Paul Cockshott’s Towards a New Socialism book on economic planning, ignored the central economic planning that’s conducted every day by monopolistic corporations such as Wal-Mart using computer software, ignored any and all revolutionary planning projects like Chile’s project cybersyn, and determined that no computer now or ever would be able to calculate an efficient economy under any circumstances.
And what does Mises use as his standard for “efficiency” you ask? Well, the capitalist free market of course! Don’t forget that the neoclassicals always assume the market to be the most efficient method for producing and distributing goods. So to distill Mises argument down to its essence, he says no economy could ever be planned as efficiently as the free market, because none of the computer programs or planning models in 1920 could create an economy that replicated the existing market economy, which he assumes to be the most efficient method of economic distribution possible because of the made up theory of equilibrium, despite the fact that it constantly allows people to starve and creates senseless wars of conquest… Okay Ludwig, whatever you got to tell yourself to justify the system that made you an intellectual superstar. Even if it was impossible for computers to calculate a complex capitalist market economy, why would the working masses of society want that anyways? This economy drives down our wages, sends our children to die in wars of conquest, and works us to the bone for the purpose of accumulation. How hard can it be to plan an economy better than that?
So, are you beginning to see the absurdity of an economic framework of analysis that always assumes markets to be optimal? When this unproven assumption is taken as fact, the neoclassical economist can argue almost anything. And Mises demonstrates this perfectly by claiming to know the future, stating with certainty that no technology will ever be invented that can plan an economy better than the sacred market. Sometimes it seems like neoclassical economics should stop pretending to be a school of economic study and embrace its dogmatic roots by becoming a religion. If you’re going to worship the market as a God, you might as well be honest about it.
The neoclassical religion is even complete with its own origin story! It says that since the dawn of mankind the human species has always traded goods and services on markets. Over time humans increased the amount of goods and services they produced and traded with each other, and the more that market transactions and commerce increased, the more that society improved! For everyone except the newly enslaved people whose labor created the commercial goods of course. But eventually the benevolent ruling class realized that the one commodity human beings shouldn’t buy and sell, is other human beings. So, wage-labor, or the commodification of human labor power, came to replace slave labor, and capitalism was invented, meaning humanity had reached the pinnacle of their development. All that can be done now by those who want society to flourish is to protect our markets and keep them free!
The problem with this origin story is that it is a self-serving fantasy created by neoclassical ideologues with no grasp of history and no intentions of injecting rigorous historical analysis into their scholarship. Instead of a detailed history we get a dogmatic creation story about the sacred market, culminating in the message that society should worship and protect the market if we want to flourish. While it is true that the development of markets and commerce spurred the growth of capitalism which replaced feudalism in Europe, commodity production didn’t start making substantial gains until around 1200 AD, and it didn’t explode until the industrial revolution years later. The neoclassicals simply ignore thousands of years of human history that came prior to the development of markets and commodity production, as well as mountains of historical and anthropological evidence suggesting that humans originally lived in primitive communist societies, where the means of production were held in common, and production and distribution were carried out based on the needs of the group. Only with the development of humans' productive powers and the ability to hoard wealth did society become divided into classes, and only then did accumulation and market exchange become a major incentive to human activities.
Not to mention that the division of society into classes and the emergent drive for accumulation then became the basis for most every historical atrocity that followed. For example, the exploitation of labor and slavery, wars of conquest, the systematic oppression of women, vast inequality in ownership of the necessities of life, just to name a handful. Prior to society’s division into classes of owners and workers, so called ‘human nature’ was largely cooperative, which is evidence that humans are not the inherently selfish individuals that the neoclassicals make us out to be. The Marxist view is that human nature is malleable, and changes based on material conditions. An economy divided into classes that allows the most selfish and cutthroat to rise to the top, will promote a kind of human nature that is selfish and greedy, but if humans were to exist in an economy where cooperation was incentivized, it would allow the more selfless aspects of humanity to flourish. Free markets are not equivalent to a free society, and in fact freedom of markets often means freedom of exploitation, which incentivizes selfishness and the domination of others.
The ahistorical framework of the neoclassicals has had a terrible effect on academia as a whole. When Professor Edward Baptiste published his book, The Half Has Never Been Told, giving an economic analysis of the development of American Southern Slavery, Western economists embarrassed themselves by responding with anti-intellectual criticisms of the book that amounted to being mad that it disproved part of their mystical origin story about the development of capitalism. I criticize these economists more thoroughly in my article about Southern Slavery’s role in the development of European and Northern capitalism, and Dr. Baptiste himself published an article destroying his neoclassical critics and their dogmatic view of history that actually resulted in the economist retracting their article and issuing an apology.
The basic critique of the book that the neoclassicals gave in their article Blood Cotton was that “Mr. Baptiste has not written an objective history of slavery. Almost all the blacks in his book were victims, almost all the whites villains.” The authors argue that the enslavers, who implemented systematized torture in order to maximize the production of cotton commodities, were simply acting in accordance with the global markets, and therefore shouldn’t be demonized for using torture as a method of production. As Baptiste explains in his response, the economists expose the intellectual and moral bankruptcy of their own ideology with this review. Because of their adherence to market fundamentalism, and the deeply held belief that societal efficiency and wellbeing increase in proportion to the profits of the ruling class, the economists have found themselves in the absurd position of arguing that slavery wasn’t actually that bad! After all, the enslavers only captured, traded, and tortured other human beings because the market incentivized them to do it. And the market always knows best!
Oddly enough the economists also argue that slaves weren’t treated as poorly as Baptiste portrays, because slaves were legally considered the property, or the capital, of their enslavers, and thus the slave owners had incentive to not maim or kill their own slaves. One has to wonder whether these economists would hold the same positions if they were allowed to hop in Ludwig Von Mises’ time machine and travel to the past to be a slave for a week. But regardless, they’ve unwittingly made an argument AGAINST capitalism and wage labor here, by arguing that capitalists would actually take better care of their workers if they owned them as private property. The implication in their argument is that wage-laborers are treated worse than slaves, because capitalists only own the wage worker’s bodies during the temporary period in which they are working, and after work hours they can dispense with the worker and draw fresh labor power from the labor market. But this is a point that is completely lost on the neoclassical economists who tend not to worry themselves with the logical implications of their theories.
Unfortunately, too few academics dare to do what Baptiste did – give an account of historical economic development that runs counter to the fundamentalist beliefs of the neoclassical school. Years of ruling class influence on the academy have had incredibly harmful effects, and neoclassical economics have become the form of economic thought that underpins most all of the social sciences. There has been a great deal of scholarship detailing how the Koch Brothers and their oligarchic contemporaries have spent billions of dollars to influence the academies of higher learning, largely through making their multi-million-dollar donations to various colleges dependent upon those colleges teaching neoclassical economics and hiring professors who adhere to the neoclassical school. Jane Meyer’s 2016 text Dark Money is a great piece of journalism that details how the Koch Brothers propaganda machine was built and how it operates.
Anyone studying social sciences in academia today has surely encountered neoclassical economics at some point whether they're aware of it or not. When I was pursuing an undergraduate degree in politics, I took a microeconomics course to better understand the effect of economics on politics, where even my young mind was immediately stunned at the lack of scholarly rigor shown by my professor when I asked her some of the burning questions I had about economics. I first questioned the Professor about the economic situation in Venezuela, which she boiled down to “Venezuela used to be rich, then socialism came along, now they are poor.” At the time I didn’t realize how ludicrous this statement truly was, and I would later be motivated by this conversation to publish my undergraduate thesis on the actual political-economic situation in Venezuela, but at the time I just started asking the professor questions, naively believing she may have the answers I was looking for. I asked about the effects of US sanctions on Venezuela, the US coup efforts, why John Bolton and other members of the US State Department were so obsessed with controlling Venezuelan politics.
All of these questions were batted down by the professor who gave me no honest answers and found a way to blame Venezuelan Socialism for everything negative that has happened in the country in the past 25 years. She also praised John Bolton as a man who always does what he thinks is best, and denied my claim that Bolton was influenced by American oil corporations who crave access to Venezuelan oil. Later on, I would discover that the Professor is the Chairman of the local GOP who had run for office many times with the Republican Party (losing every time), and she adhered to the neoclassical school of economics with her most influential thinker being Ayn Rand. She also used to dress up as Barbie in class (talk about commodity fetishism). This interaction was what first planted the idea in my head that Western economics may be a total scam, and the people who told me that I needed to study economics in order to learn why socialism could never work, were either scam artists or victims themselves.
As I now pursue a graduate degree in Healthcare Administration, I'm finding that neoclassical economics not only dominates the economics departments in Western colleges, but the rest of the social sciences as well. A recent unit on the economics of healthcare taught us that supply and demand curves determine price, that healthcare firms must always strive to remain profitable, and that valuable healthcare resources should be spent on market analysis to maximize sales. A small paragraph at the end of the chapter mentioned that markets may not necessarily be equivalent with the needs of human populations, but the text takes the analysis no further than that. No mention is made of the fact that the chapter was based on neoclassical thought or that there are other schools of economic thought which exist.
And of course, this isn’t surprising, the entire curriculum is based on healthcare administration within a capitalist machine. Every decision and analysis we’re taught to make is done to maximize profitability for healthcare organizations. Our textbook chapter on healthcare economics made no mention of the fact that public healthcare systems have shown to be more efficient than private ones time and time again. No mention is made of the fact that the contradiction between exchange-value and use-value existing within every commodity perfectly explains the crisis of American healthcare, in that healthcare producers are incentivized to prioritize exchange-value and profit over use-value and the health of the populations they serve. Instead markets and profit are portrayed as universally existent and efficient and the 40,000 people who die yearly due to lack of healthcare, or the 100,000 killed by the opioid crisis created by the greed of healthcare corporations, are just unfortunate side effects of the system that can’t be helped without cutting into corporate profits. And of course, those profits are deemed eternally untouchable.
Even the Marxist school of economics has not continued unaffected by the dogma of the neoclassicals. Many self-described Marxist economists have abandoned the labor theory in favor of utility theory, and even the famed Marxist professor David Harvey suggests in his reading guide for Capital Volume I, that the labor theory of value is no longer of much use as a price determinant and is only still valuable because it helps us understand that there is a socially necessary quantity of labor needed to produce the material goods humanity needs to survive, and this socially necessary labor value is concealed by the circulation of commodities and fluctuation of prices. I believe it would serve Professor Harvey well to engage with the defense of the labor theory laid out by thinkers like Paul Cockshott, and to remember that Marx himself goes into detail about the way that price and demand shocks in the market cause price to fluctuate around its labor value, or its equilibrium according to the neoclassicals – a fact which Harvey is surely aware of as he addresses it many times in his Capital Companion series. It’s possible that Harvey has been influenced by the dominance of neoclassical economics in the Western academy, and by his intellectual contemporaries who tend to scoff at the labor theory despite being unable to disprove its scientific value.
While I have immense respect for David Harvey as a theorist and a student of Marxism, I believe he does a disservice to budding Marxists by failing to provide a defense of the labor theory in his reading guide for Marx’s most pivotal work. In arguing that the price system has a “vital function- the regulation of demand and supply…so that they converge on equilibrium price” he injects the concepts of neoclassical economics into Marxism where they do not belong. The function of the price system is to express the value of labor and facilitate the exchange of the products of labor, which it does imperfectly due to the contradiction between abstract and concrete labor. The imperfection is that prices often fail to represent the labor content of commodities with 100% accuracy, not because price fails to reach equilibrium, which unlike labor time, is a scientifically meaningless value that is not based upon anything concrete.
The Marxist method of economic analysis is based upon historical materialism and the scientific method, and it emerged as a much-needed critique of liberalism after the massive societal changes that were brought on by the industrial revolution. The neoclassical method of analysis only emerged historically as a ruling class counter to Marxism, and it is based on ahistoricism and unprovable assumptions that the capitalist class finds convenient. There is no reason that Marxists should alter our analysis in order to be more in line with the mainstream thought of the neoclassicals even if there is peer pressure to do so. We can start taking the neoclassicals seriously when they start presenting theories that are based in evidence and scientific rigor.
Young Marxists would be better served to engage with the analysis of a rigorous intellectual like Cockshott, rather than the work of an intellectual superstar like Milton Friedman, who’s lofty position in academia was granted to him by the ruling class. This is simply because his economic theories were tailored to capitalist interests and constitute the purest intellectual expression of the capitalist ruling class, that could not have been produced by any kind of objective analysis, but only by puppets of the capitalist oligarchs. And thus, the neoclassical theories hold as much scientific value as those produced by Feudal Lords arguing in favor of the divine right of kings.
In many ways the core principles of neoclassical doctrine can be equated with those of postmodern philosophy. The French postmodernist Jean-Francois Lyotard once defined postmodernism as “incredulity toward meta-narratives,” i.e., the rejection of any grand narratives about society, historical progress, or humanity’s steady advancement towards something better with time. Postmodernism deconstructs these narratives in favor of the idea that society is made up of isolated individuals whose reality is based upon their own subjective experiences, and not any kind of shared sense of meaning held collectively by say, an economic class for instance. For the postmodernist there is no historical subject that fits into a grander narrative about the progress of humanity, unlike Marxism which upholds the toiling masses struggling collectively for their own liberation as the subject of history. Instead, the working class is made up of isolated individuals who are too caught up in their own subjective individual experiences and identity groups to work collectively for any kind of shared goal. Human Reason and epistemological knowledge are themselves considered to be unreliable as they are bound to be influenced by the subjective experiences of the person attempting to utilize reason. Although, the postmodernists themselves seemingly use reason in the construction of their own philosophical systems, so perhaps they only consider themselves to be rational, and its only other people who have no capacity for reason.
Postmodernism rose to prominence in the 70s and didn’t explode until the 80s, but the roots of postmodernism can be found in Friedrich Nietzsche's writings in the last quarter of the 19th century. It is the culmination of that line of thought which Lukács called bourgeois irrationalism in The Destruction of Reason. For the purpose of simplicity, I will simply refer to all of these strains of thought as ‘postmodernism’ unless addressing one of them specifically. My critique is not all encompassing and is aimed more at postmodernism’s overall impact on society and the Western academy than specific postmodern thinkers. For those who want more specific critique or detailed history I recommend diving into some of the sources I’ve cited in this paper.
Many of the critics of postmodernism dismiss it as unintelligible academic jargon with no decipherable meaning, while many who uphold the philosophical school tend to portray its thinkers as untouchable titans whose theory is so complex that it cannot even be critiqued. However, the best critics of postmodernism are those who reject both of these views in favor of the idea that it is in fact intelligible, it can be critiqued, and it actually should be critiqued because it has tangible effects on the real world. In recent years Marxist Philosopher Gabriel Rockhill has provided invaluable critiques of postmodernist theory, which he himself studied for years in France, as well as a historical analysis of how postmodernist theory rose to a place of prominence and status in the Western academy. Rockhill goes to great lengths to uncover the connection between postmodern thinkers and the Central Intelligence Agency (CIA), pointing out that if the philosophy is so important to a ruling class body of anti-revolutionary suppression, then it surely bears importance for revolutionaries as well. 
Rockhill brings forward a mass of evidence detailing how the CIA and their arms of cultural and academic influence like the ‘Congress for Cultural Freedom’ boosted postmodernist and post-structuralist thinkers as a way to combat the influence of Marxism and sow division in leftist movements, even doing so against the wishes of the U.S. State Department at times, which had originally been duped by postmodernism's left-wing ascetic. The CIA, however, could tell from the outset that postmodernism’s radical aesthetic was just that, an aesthetic, and in fact the philosophy is deeply anti-Marxist and reactionary, as it removes the possibility of a historical subject progressing towards an ideal held in common, such as the progress of the toiling masses towards communism.
The postmodernist thinker claims to reject all historical meta-narratives, but such a rejection constitutes a meta-narrative in itself! It is, in fact, a narrative which says that collective struggle will never truly progress history forward or make life better, and any sense of shared reality or meaning between workers is either illusory or imaginary. Thus, what is there for a working person to do besides feed their individualistic consumerist desires as much as possible before death? Any sense of discipline or dedication to a common struggle would be futile and based on the illusion of historical progress, a false narrative of history that only exists as a figment of the worker’s imagination.
It should come as no surprise that such a message, concealed beneath the intellectual sounding rhetoric of thinkers like Michel Foucault and Jacques Derrida, was very useful for the CIA, who blasted it over a loudspeaker from the ivory towers of academia into the minds of the unsuspecting masses below. Any member of the working class who engages in collective struggle is simply a prisoner to their own mind unable to grasp the true nature of history. Unlike the enlightened postmodernists and Frankfurt School intellectuals, of course, who as Rockhill points out, very rarely engaged in revolutionary organizing outside the walls of the academy themselves.
While postmodernist theory is not unintelligible as some claim, there is no doubt that it prioritizes style over substance and often uses complex intellectual jargon to distract from the glaring contradictions in their philosophical systems. It also allows advocates of the postmodern school to look down upon and mock class-conscious working people who may only have a rudimentary understanding of Marxism and philosophy. I saw this constantly in my own experience creating Marxist education on the popular social media app Tik Tok, which allows users to share short videos that are often accompanied by music and built in special effects. Tik Tok accounts identifying as “neo-Marxist” or “Post-left” would mock young people from working families that were interested in Marxism for believing Marx’s meta-narrative about progress through class struggle, claiming it had been largely destroyed by the postmodernists.
As most people who are familiar with the app would probably imagine, the majority of these Tik Tok postmodernists were around the age of 18 and had not actually engaged with the extremely wordy scholarship of Foucault, Derrida, and Baudrillard, nor the dense and intellectually rigorous works of Karl Marx. These teens and young adults were more so drawn to the radical aesthetic of the postmodern school and the fact that it allowed them to feign intellectual superiority over their peers. And thus, these confused teens acted as online agents for discouraging radical activism and education while sowing relational division among other young people interested in radical politics. Exactly the function that the CIA had hoped postmodernism would serve.
Ironically, Rockhill is able to expose the CIA and ruling class influence in the postmodernist school by using the Marxist dialectical method to structure his analysis and examine how postmodern theory has been produced and circulated. A “dialectical analysis of theoretical production,” or a structuralist analysis of theoretical production used to critique the anti-structuralists. In Rockhill’s dialectical investigation he finds that the Congress for Cultural Freedom, the ford foundation, and other arms of the ruling capitalist class did fund academics directly on various occasions, but even more so than that, created the conditions for postmodernist thinkers to emerge. Millions of dollars were spent to create an academic climate where anti-communist leftists who rejected all forms of actually existing socialism could become intellectual superstars and receive consistent financial backing for their work.
The CIA funded newspapers, journals, and institutes for social research would have surely rejected the work of a Marxist philosopher like Carlos L. Garrido, who upholds Marxism as a worldview and the Marxist conception of historical progress, and defends the gains made for working people by revolutionary movements. Instead, these journals boosted the work of thinkers like Max Horkheimer, who became a millionaire owner of multiple textile factories, and Theodor Adorno, the son of a wealthy wine merchant, who quickly became towering figures in the Western left. Two philosophers that claimed to be Marxists, but never belonged to a working-class political party in their lives, nor lent their support to a single revolutionary movement. Horkheimer even went as far as to support the murderous US invasion of Vietnam, arguing that it was necessary to bludgeon China. Perhaps the European thinker held a bias against Ho Chi Minh and the Vietnamese communists for throwing off their French colonizers a few years prior. But regardless, the CIA loves a fake Marxist who will support the carpet bombing of real Marxists.
The Link Between Neoclassical Economics and Postmodernist Philosophy.
So now we arrive at the connections between postmodernism and neoclassical economics, which is nowhere as clearly apparent as with the utility theory of value, or the subjective theory of value. The keen-eyed reader may have already realized a connection between the economic philosophy based on a subjective theory of value production, and a philosophical theory which believes reality is largely subjective. There is no real value created by labor, only an individual's subjective demand for the products of labor. This departure from the labor theory of value in economics represents a move towards subjectivism away from the scientific conception of history, as well as a turn from Marxism toward postmodernism.
The shift reoriented the Western left just as the CIA had hoped it would, as European and North American socialists began to prioritize individual liberation above collective, and grounded itself upon issues of identity politics rather than labor. If labor is not the sole creator of value, why would the left form a movement based around the collective struggle of the laboring masses? Why not just focus on the freedom of individual identity groups? By removing labor from the core of the economic analysis, the neoclassicals remove the possibility for uniting the laborers in struggle based on their common class interests. This is similar to how postmodernism removes the possibility for struggle by atomizing the working class into separate individuals, rather than uniting them based on their common participation in the labor process, and thus their common exploitation under capitalism.
Postmodern thinkers would reject the Marxist idea that the scientific method should be used to study the economy, after all, how do we even know the scientific method is the proper way to discern objective reality? Objective truths and commonly held conceptions about the economy are nothing but illusions of the mind, as is humanities’ belief that we have the capacity to study the historical development of a specific subject. In a remarkably similar way to the neoclassical economists, the postmodernist philosophers dispense with the historical view of capitalism and the understanding that it has a historical origin which implies a historical end. The “left wing” postmodernists and “right wing” neoclassicals both reject the idea that capitalism exists in a historically specific form, although the neoclassicals somehow still make the contradictory argument that capitalism is the most highly developed form of society possible. The more that society is commodified the better, they argue, the only historical development that matters for the neoclassicals is that of the market.
The similarities between postmodernist philosophy and neoclassical economics are quite apparent when distilled down to their essence. Both are opposed to a historical materialist understanding of society, and both deny the possibility of having an objective measure of value, or even an objective truth. Instead, value and truth are entirely determined by the subjective experiences of individuals regardless of the objective reality. The utility theory of value is nothing but an application of the postmodernist theory of subjectivism applied to economics in an absurd manner. The postmodernist denial of historical development gives justification for the neoclassical school’s general historical ignorance. Despite these similarities most postmodern thinkers are associated with the “left wing” while the neoclassicals are considered “right wing.” In reality both ideologies are anti-Marxist, and both serve the ruling capitalist class.
It’s unclear to what degree the neoclassical school influenced postmodernism or vice versa. Neoclassical economics began emerging around the 1870s, around the heyday of Friedrich Nietzsche’s writings, but well before postmodernism came to prominence in the 1970s and 80s. Thus, it’s likely that the infiltration of the academy by neoclassical thought, particularly in the social sciences, had at least an indirect effect on the major postmodernist thinkers. But regardless of the causal relationship between the two, the fact that they come to such similar ahistorical and subjectivist conclusions is what makes the comparison interesting, and what characterizes them as being the two purest expressions of neoliberal ruling class ideology in the academy. Both ideologies isolate and fragment the individual away from the collective, both deny the possibility of objective reality that can be commonly understood, both only acknowledge truth in terms of subjective individual experiences, both reject the historical place of capitalism as a specific but temporary mode of production, and most importantly, both remove the possibility for collective working class struggle against the ruling elite in order to create a better world.
It is not because of their scientific value that neoclassical and postmodern thought have come to dominate the western academy, but because these ideologies express the values of neoliberal capitalism itself. This is a system which alienates, isolates, and fragments working people, places identity above labor, and preaches that the meaning of life is to consume commodities and enjoy material pleasures. This is the state of human affairs that stems from the material base of our society, from capitalist relations of production after years of development into the stage of neoliberalism. Postmodernist philosophy and neoclassical economics simply reflect the material base relations of capitalism in an academic form, and their sole purpose is to sustain this economic base by discouraging individuals from trying to change it.
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Edward Liger Smith is an American Political Scientist and specialist in anti-imperialist and socialist projects, especially Venezuela and China. He also has research interests in the role southern slavery played in the development of American and European capitalism. He is a co-founder and editor of Midwestern Marx and the Journal of American Socialist Studies. He is currently a health care administration graduate student and wrestling coach at the University of Wisconsin-Platteville.