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A Critique of Mainstream Growth Theory: Ways Out of the Neoclassical Science (-Fiction) and Toward Marxism

Revitalizing Marxist Theory for Today's Capitalism

ISBN: 978-1-78052-254-8, eISBN: 978-1-78052-255-5

ISSN: 0161-7230

Publication date: 7 November 2011

Abstract

This chapter is a radical critique of the neoclassical growth theory, justifying ways out of mainstream economics. It has three parts. The first one analyzes growth theories from the Classical representation to the endogenous growth models. The second part demonstrates that the “new growth theory” is not a break with Solow's formalization. To prove it, we build an original Solowian endogenous growth model. Then, this neoclassical macrodynamic framework is technically, deeply critized in a third part. We show that both exogenous and endogenous neoclassical models prove to be incapable to explain growth in the long period. We concentrate on the ambiguities surrounding the hypothesis of single agent, as well as on the role of the state, in particular when it is considered as a “planner” by the neoclassicals. Endogenous growth models do not correspond to macrodynamization of the Walrasian general equilibrium, nor have solid microeconomic bases. We advocate in favor of rehabilitating state's intervention in social areas and of reactivating Marxist theoretical reflections regarding social planning and class analysis in the current time of structural crisis of the capitalist world system.

Citation

Herrera, R. (2011), "A Critique of Mainstream Growth Theory: Ways Out of the Neoclassical Science (-Fiction) and Toward Marxism", Zarembka, P. and Desai, R. (Ed.) Revitalizing Marxist Theory for Today's Capitalism (Research in Political Economy, Vol. 27), Emerald Group Publishing Limited, Bingley, pp. 3-63. https://doi.org/10.1108/S0161-7230(2011)0000027003

Publisher

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Emerald Group Publishing Limited

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