Political Economy and Economic Science: The Work of Phyllis Deane

Abstract

Some time ago, Phyllis Deane pointed to “an inescapable tension between political economy and economic science”. Yet, the separation of positive economics (pure and empirical) on the one hand and normative economics (pure and applied) on the other is still common among neoclassical economists and has a long tradition. Moreover, Keynes "[wanted] to emphasize strongly the point about economics being a moral science", which implies that, in his view, the separation between science and ethics cannot be maintained either. In this paper we argue that an entirely different vision of society and of man is implied in the neoclassical approach and in the classical-Keynesian approach, which is associated with widely differing views on the great problems of economic theory: value, distribution, employment and money. The method employed in both approaches is also fundamentally different; this shows up in a differing relationship between theory and historical reality. Finally, the relationship between economics on the one hand and ethics and politics on the other is sharply opposed to the liberal and to the middle-way classical-Keynesian view. It is argued that in neoclassical economics a tension exists between economic science and political economy, between theory and history and between economics on the one hand and ethics and politics, and that such a tension does not exist in classical- Keynesian political economy. The clue to this state of affairs is provided by the differing visions of society and of man associated with both approaches and the implications of these visions.