Mainstream, or more formally, neoclassical, economics claims to be a
science. But as Michael Perelman makes clear in his latest book, nothing
could be further from the truth. While a science must be rooted in
material reality, mainstream economics ignores or distorts the most
fundamental aspect of this reality: that the vast majority of people
must, out of necessity, labor on behalf of others, transformed into
nothing but a means to the end of maximum profits for their employers.
The nature of the work we do and the conditions under which we do it
profoundly shape our lives. And yet, both of these factors are
peripheral to mainstream economics.
By sweeping labor under the rug, mainstream economists hide the nature
of capitalism, making it appear to be a system based upon equal exchange
rather than exploitation inside every workplace. Perelman describes this
illusion as the "invisible handcuffs" of capitalism and traces its roots
back to Adam Smith and his contemporaries and their disdain for working
people. He argues that far from being a basically fair system of
exchanges regulated by the "invisible hand" of the market, capitalism
handcuffs working men and women (and children too) through the very
labor process itself. Neoclassical economics attempts to rationalize
these handcuffs and tells workers that they are responsible for their
own conditions. What we need to do instead, Perelman suggests, is
eliminate the handcuffs through collective actions and build a society
that we direct ourselves.
