Power, competition and the free trader vulgaris

Giulio Palermo

Cambridge Journal of Economics, 2016, vol. 40, issue 1, 259-281

Abstract: Competition is taken for granted by neoclassical economics: its cause is human nature and its functioning is the result of spontaneous interactions. As such it is contrasted with power, which is an unnatural restriction on human liberty. By contrast, Marx discusses competition as a coercive mechanism. Historically, competition develops with the development of market relations and what today appears as ‘human nature’ is part of this process. Thus it is within competition and not outside of it that Marx explains the coercive nature of capitalism. His critique shows that competition and power appear to be antithetical because market relations are based on individual freedom. However class relations are another essential aspect of capitalism. By neglecting these relations, neoclassical economists (including those of a ‘radical’ inspiration) implicitly espouse the ruling class’s viewpoint, which they simply translate into rigorous mathematical terms. In this sense they are the modern expression of what Marx called the ‘vulgar political economy’.

Date: 2016
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