Who was more detrimental to economics as a science, Marx, or Walras?

Economics Economics Questions
1

Now, the answer seems to be quite obvious, but upon further inspection it seems that a powerful argument could be made for (against) Walras. There’s no doubt that Marxian theory is inherently more fallible; but this, in my opinion, is why he was not as detrimental as Walras. The positions and methodology held by Marx and the German historical school were attacked, and basically refuted, right from the start. Menger, Wieser, and finally Bohm-Bawerk, basically discredited them (at least intellectually) with ease. His conclusions were founded upon shaky classical political economic principles, which were simply counter-intuitive. It didn’t take an economic genius to understand that value is not objectively determined, and that an apple today is not valued the same as an apple tomorrow, or 10 months from now, so on and so forth (even if it shares equal quality and form).

Now contrast this to Walras; his theories, though mathematically elegant, are practically incomprehensible to non mathematicians. Even Mises didn’t see the grave errors rooted in General equilibrium analysis. The fact that prices are set before the fact, and auctioneers merely distribute consumer and producer goods based on this a priori price, is, the complete antithesis of human action (and real world phenomena). But worst of all, it not only failed to discredit centrally planned economies, but made them seem possible and efficient. Walras was able to separate socialist planned economies from Marx, and therefore, from the negative connotations associated with Marx (negative connotations held on to average men). The rise of the Walrasian auctioneer, instantaneous market clearing, and price setting, took over the intellectual world of economics; so much so, that economists during the 20s and 30s simply couldn’t understand Mises’ position regarding the failure of economic calculation in a socialist commonwealth, and Hayek’s point on disseminated freely floating information signals. Math replaced logic, and all knowing auctioneers (instantaneous adjustments) replaced trial and error.

Now, we see the detrimental effects of this even (especially) today. How many times have Austrians been accused of ‘not understanding math,’ and holding on to ‘primitive methodology.’ Mathematics legitimizes confusion, and makes economics seem more prestigious. Indeed, Walras is probably responsible for the employment of would-be mathematicians around the world, who hold very powerful positions working for their nations, and legitimizing their destructive economic policies.

Do you guys see any problems with my analysis?

2

That’s how a real-world auction too happens, no? The auctioneer sets different prices, until the market is cleared. Or am I not correct in getting you?

3

Well, he’s talking about an auction on the macro scale, with one all-knowing auctioneer; but the point is there nonetheless. The auctioneer can set any price he wants, but he must adjust to consumer preferences through a continuous process of trial and error (this holds true for his production methods as well). The economy is driven by consumer sovereignty, not by an auctioneer. Prices are the result of economic phenomena, not the starting point; this is what makes prices information signals, and why planned economic systems must ultimately fail.

4

I apologize for spelling mistakes, wrote it in a hurry.

5

Okay I get it now. The word ‘auctioneer’ should not be used to describe a planner who uses his arbitrary judgments to allocate resources.

6

I think it’s an interesting question and at the same time a question that can not be answered. It’s similar to the question if Keynes or Friedman were more destructive to the idea of truly free markets in the long run. Sure, I guess we can all agree that we would rather live in a “Friedman World” than in the Keynesian counterpart, but I think Rothbard had a point, when he argued that basically all that Friedman did was to make the state more efficient and to blur the line between free markets and intervention in the free market. Nowadays, most people don’t really see a difference anymore between Friedman and Mises. For them, both stand for capitalism and the failure of our current system discredits not only the Chigago School but every free market approach in general.

As you said, the same goes for Marx and Walras. In a way exactly because Walras is not as deeply flawed as Marx, it was possible for his ideas to spread more widely and for that be probably more destructive in the long run. But as we don’t know what would have happended without his ideas, it’s possible it would have been even worse.

What I want to say is, history teaches us valuable lessons, but there is nothing to win in ranking people in terms of productive or destructive. What we should do is correct their errors and promote what we perceive to be right. That being said, I don’t see any real problems with your analysis.

Edit:

I forgot to add: I think the lesson here is to stick to principles. Do not promote an idea just because it is not as wrong as the other idea on the table. Compromise and pragmatism can be a very slippery slope.

7

Well Fisher (and therefore Friedman) was heavily influenced by Walras.

8

As an engineer and mathematician, I find it interesting how mathematics, which is essentially one tool (or a set of tools) among many in the box of reason, has been elevated to the godhead the way it has. And do those who bash reason with mathematical calculations and models realize that their very weapons were fashioned by reason, that “primitive methodology” that they so decry? The oversimplifications in Game Theory are fine if you can afford to gamble, but have grave consequences as economic policy. I call this a gross misuse of a relatively useful tool.

Marx was just flat out wrong, whereas Walras and those who followed made some very bad assumptions and poor choices in application.

The human costs associated with Marx are pretty hard to ignore.