This is an extended version of the review which appeared in:

Review of Political Economomy, 20 (1), 2008, pp. 157-161.

Copyright Taylor & Francis

Postmodern Moments in Modern Economics

David F. Ruccio and Jack Amariglio

Princeton, Princeton UP, 2003, pp. 349, $35.00, hardcover

ISBN 0-691-05870-9

At last postmodernism, though this school or mode of thought is hardly a recent devel-
opment, has arrived in economic science. David F. Ruccio and Jack Amariglio, profes-
sors of economics at Notre Dame University and Merrimack College respectively, give
their readers both a concise introduction to postmodernism and an extended application
of postmodern thinking to economics. Or rather, they show where, by whom and in
which respects postmodernism has already found its way into the ‘dismal science’. By
‘postmodern moments in modern economics’ they refer to the fact that postmodernism
had and has not deliberately to be transferred to economics, but on the contrary evolved,
at least to a certain extent, involuntarily out of economic reasoning itself. Nevertheless,
the authors do not confine themselves to pointing out the postmodern as a kind of hid-
den and illegitimate offspring of modern economics; instead they plead for the recogni-
tion, adoption and radicalization of economics’ implicit postmodernism.
Chapter one presents the various available definitions of postmodernism. The
authors distinguish between postmodernism as (a) a (new) historical phase or even ep-
och, (b) the condition, state or constitution of our time and (c) a specific critical style of
reasoning. They favor the latter interpretation. Against defining the postmodern
chronologically as having left modernity behind stand difficulties in finding and naming
a historical break and, more importantly, the obvious social, political, scientific, and of
course, economic continuities that align our times with the unquestionably modern late
19th and early 20th centuries. Although less easily discarded and, at least at a first
glance, easily confused with their favored definition of postmodernism as a style of cri-
tique, Ruccio and Amariglio do not see the postmodern as an essential trait of contem-
porary Western society, because they reject all forms of essentialism, any definition of a
thing or entity as being such and such as still, if not typically, modern. It is this essen-
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tialism, together with the related notion that science, or any other discourse for that mat-
ter, is able to represent the being and interaction of ‘things’ correctly, i.e., objectively
and neutrally, which they see as already undermined by ‘modern’ economic theories
and which they want to criticize and attack openly. They do this by taking up mainly
heterodox, though not necessarily marginal schools of economic thought and critique,
namely (post-)keynesianism, feminism, (neo-)institutionalism, and Marxism – though
neoclassical and everyday economics enter the stage as well – which they discuss in
terms of their achievements and shortcomings in dissolving modern economic science
as a supposedly single, methodologically and epistemologically unified field of research
and knowledge.
Chapter two is devoted to the topic of (‘true’) uncertainty, which they consider
to be the shibboleth of postmodern theorizing. Ruccio and Amariglio remind their
readers of the long history of economists’ efforts to come to grips with the problem of
uncertainty as either a hindrance to conscious choice and economic equilibrium and/or a
condition of economic enterprise and individual freedom. The focus is on the writings
of Knight, Shackle and Keynes. Relying on these authors they repudiate any efforts to
transform uncertainty – which Keynes described as that which ‘we simply do not know’
– into mere probability, malleable to one kind of statistical manipulation or another. If,
on the other hand, ‘true’ uncertainty is taken into account, economics becomes much
‘softer’ than generally pretended, i.e., economic model building becomes an exercise in
outlining possible connections rather than finding necessary, true or causal relations.
However – and here we touch a point of indeterminacy pertaining not just to this
chapter, but to the whole book – Ruccio and Amariglio reject any form of ontological
uncertainty, be it subjective, that is due to the natural limits of individual knowledge as
in Knight, Shackle, Simon or Austrian economics, or objective, that is due to the at least
partially contingent and thus unforeseeable world ‘out there’ as in the late Keynes’
work. For our authors uncertainty is discursive, i.e., a product, a more or less voluntary
construction of (the economic) discourse itself. Uncertainty can be shown, they claim,
to be one effect of the impossible closure of discourse and theory; of their incapacity,
not to point to, but to effectively reach reality. For postmodernism language or any
other language-like means of communication as convenient symbols or mathematic
formula are not only an indispensable tool of mutual understanding and research but
also the impenetrable screen which separates our everyday as scientific constructions
from their – ‘perhaps’ – underlying reality. Postmodern ‘truth’ is not the proven corre-
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spondence of notion and thing but an intradiscursive and sometimes technically opera-
tive convention. Thus Ruccio and Amariglio’s at least implicit claim that postmodern-
ism is able to shake the only seemingly firm – because discursively constructed – foun-
dations (and conclusions) of economic modernism is just a claim, whose relative ‘truth’,
superiority, value or usefulness technically has to compete with those being criticized.
In other words, how to judge the ‘truth’ of the Cretian’s statement that all Cretians are
liars, if not either by assuming a superior position which allows one to decide the truth
of this statement or by bracketing the universal claim in favor of testing specific propo-
sitions one by one?
Yet, neither is this kind of testing done, nor is any allegedly superior position
taken in the book under review. What the authors do is not to prove the falsehood of
modern or orthodox neoclassic economic views but to show that, given that there is true
uncertainty, given that any correct or adequate representation of the world is impossible,
given that there is no coherent subject, and whatever the assumptions of modern
economists may be, other descriptions of economic data and their interplay become pos-
sible. However, if that is the case, it remains unclear what else the fierce – and in my
view principally justified – attacks on economic modernism resemble but sheer rhetori-
cal maneuvers. Thus, I doubt that a critique of economic orthodoxy can afford not to
ground its alternative views on scarcity, exchange, profit maximization or man itself in
an alternative outspoken epistemology and/or anthropology. Even to claim that man has
no nature is a statement about man’s nature.
Chapter three is nominally about the body, or to be more precise, about the natu-
ralness of its wants. Interestingly, Ruccio and Amariglio here see a postmodern mo-
ment within the inner fortress of economic modernism, namely the Arrow-Debreu
model of economic equilibrium. As can be inferred from the preceding paragraph, any
anthropology that assumes a given set of bodily wants or that equates any empirical
embodiment of man with man itself is discarded as fictitious and, more to the point, as
politically dangerous and repressive. For he who pretends to know what man is, so the
argument goes, automatically declares deviant (human?) beings as non-human. (What
if it were man’s nature to supplement himself by diverse forms of culture?) Now the
formalism of Arrow, Debreu, Frank and others is praised for leaving enough space to
fill in any concrete ‘body’. Since Pareto’s proposal not to consider cardinal but only
ordinal wants, and since Samuelson’s further move to de-psychologize economic man
by taking into account only his revealed preferences and not his inner or ‘real’ desires,
 4

neoclassic theory has successfully struggled to rid itself of the most essential features of
man, thus allowing one to conceive of the market in purely abstract, anthropologically
happily flat and superficial terms. Indeed, this reading of economic modernism aims at
revealing its inherent postmodern moments, yet it remains to be asked whether the Ar-
row-Debreu model really is as anthropologically ‘empty’ as Ruccio and Amariglio
would have us believe. For ‘the producer,’ who can allegedly be conceived of as a kind
of ‘universal machine’, still has to obey the supreme order of profit maximization,
whereas ‘the consuming bodies’ are still only apparently overcome utilitarians that
‘have to endure or enjoy’ (118). What is more, the authors show in the following chap-
ter that the same formal models which are lauded for de-essentializing humans, are in
fact inhabited by male white Western man.
Chapter four deals with feminist critiques of mainstream economics. It is struc-
tured, like most other chapters, with the first half devoted to the presentation of, though
heterodox, widely and rather easily accepted modern positions critical of neoclassical
orthodoxy and the second half to a discussion of more marginal and radical authors
whose proposals consist less in complementing mainstream theories than in abandoning
them in favor of full-blown postmodernism. Thus, the feminist critiques of economic
modernism are divided in those which, according to Ruccio and Amariglio, somehow
rightly but insufficiently point out the implicit gender bias of homo oeconomicus and
his selfish pseudo-autonomous market behavior while neglecting or even suppressing
such allegedly feminine, but in fact universally human capacities as sympathy, imitation
or solidarity, and those which do not at all try to restore ‘whole man’ but which plead
for renouncing the notions of gender and subject(ivity). While authors of the first group
show for example that within neoclassical theory ‘the market’ ironically functions as a
substitute for the loving and caring mother, being just and forgetting none, the second
group relates the fragmentary character of man not to his modern (mis-)understanding,
but to the discursive construction of femininity, masculinity and therefore subjectivity
as such. Yes, there may be, within in a given society or context, typically female or
male roles of behavior, but inasmuch as these roles are in themselves never coherent or
stable, are subject to history, and even prone to switch gender, the subject is – or rather,
if postmodernism as a style of critique stuck to its pretensions, could perhaps profitably
be considered as – a fiction that cannot seriously be maintained. Embedded in this
chapter is a short but very important and far reaching debate of the economy of the gift,
which, in my opinion could not only function to destabilize taken for granted economic
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wisdoms like the all but evident ‘knowledge’ of what exchange means, but also figure
as a positive rival anthropology of economic discourse. However, such an approach
remains deliberately unconsidered.
Chapter five is on the one hand an examination of (neo-)institutional economics,
and on the other hand, an attack on the positivist axiom that factual and value judgments
can, and must, be kept apart. Here we learn that, and why, Dewey (as read by Rorty)
and Nietzsche are two of the most important philosophers of postmodernism. The first
part of the chapter contains a somewhat lengthy discussion of Tool’s social value theory
which criticizes the neoclassical, or for that matter modern insistence on neutral reason-
ing and value-free science. Tool contrarily argues that since all science and every con-
clusion it reaches is selective, values as a kind of extra-scientific guide to research and
action form an integral and even necessary part of scientific inquiry. Thus, instead of
disguising the values that lead all research, scientists should make them explicit. Never-
theless, Tool, as well as some of his modern critics, assume that there is a conceivably
culturally variable, but in any case limited set of objective, extra-scientific and extra-
discursive values that already are, possibly can or ideally should be shared by scientists
to promote (economically or otherwise) the well-being of mankind. Of course, Ruccio
and Amariglio attack this proposition. True, all science is value-laden and should
openly defend the goals it pursues. For them, however, not the distinction of a realm of
being from a realm of values, but in fact the privileging of any value is an ontological
fallacy. It is the pragmatist Dewey, and to an even greater degree Nietzsche (whose
‘genealogy of morals’ is indeed admirably reconstructed on a couple of pages) who
have shown that every value is a political stake and politically at stake.
(Neo-)Institutional economic analysis should learn this lesson and confess that it itself is
scientifically fighting for a certain contingent arrangement of society instead of hiding
its engagement and one-sidedness behind metaphysical presumptions.
This second part of the chapter is forcefully written and might have, although
economic problems proper are largely avoided, the power to seduce even down-to-earth
economists to enjoy philosophical reasoning. But I doubt, and this is my first critical
remark, whether one can really esteem Nietzsche as much as Ruccio and Amariglio do
without ‘buying’ his ‘master morals’ or, at least without discussing why one can. Sec-
ondly, while I welcome taking up again the difficult and willy-nilly central problem of
value theory, I missed in this chapter any attempt to link Dewey’s and Nietzsche’s phi-
 6

losophy of value to the formation or, if you prefer, the ‘discursive construction’ of eco-
nomic and monetary value.
Chapter six analyzes the common modernism or kinship of neoclassical econom-
ics and Marxism. Without eliminating the political differences, the authors – by the
way editors of the journal Rethinking Marxism – convincingly demonstrate that these
two ideologically opposite, if not hostile schools of thought in fact share the modern
distaste for chaos and modernism’s corresponding preoccupation with order. In a kind
of chiasm, neoclassic economics start from disorder, the ‘noise’ of the market produced
by selfish individuals pursuing only their personal interests, to arrive at order, such as
the Pareto efficient economic equilibrium, in which no one can better his positions
without worsening the endowments of others, whereas Marxism starts its description of
the economic process with orderly ‘laws’ of capital’s self (re–)production and, corre-
spondingly, the capitalists’ military-like planning and organization of surplus value and
profit extraction to arrive at the unlimited exploitation of manpower and resources, at
the unjust distribution of wealth and finally the unreasonably crisis-prone reality of full-
fledged capitalism. Marxists mostly do not criticize the economic mainstream’s project
to improve the living conditions of as many people as possible. What they condemn is
the supposedly inefficient, structurally violent and potentially self-destructive way in
which capitalism tries to achieve this goal. To overcome capitalism in their view does
not mean to destroy its potential to further increase material riches but, on the contrary,
to avoid the negative and unnecessary consequences of free, i.e., wild and unregulated,
competition. It is – or was, for some – the attraction of Marxism to eventually fulfill the
modern promise to free man of all fetters of nature and domination, to allow him to de-
velop all his capabilities, to reverse alienation and to become ‘whole’ again. It is these
rather modern that plain Marxist certainties that postmodernism, its insistence on plural-
ity, contingency, non-linearity and at best fragmentary subjectivity deconstructs and
shakes. It is this belief in the laws of history and its emancipatory destiny that the ‘ad-
vent’ of postmodernism has questioned, and led the authors to ‘rethink Marxism’. Eve-
rything which has and can be shown by a postmodern, or for that matter sociological
critique of neoclassical key concepts (e.g. that markets are embedded, that rational
choice can at best reduce but never tame uncertainty, or that the distribution of wealth is
as much politically shaped as economically justified) pertains mutatis mutandis to
Marxism: there is no transparent organization, there are no ‘planable plans’, the distinc-
tion of true and false desires is untenable, and there are no laws of capital like the ten-
 7

dential fall of the profit rate that mysteriously steer the course of events. In other
words, whereas neoclassic economics exaggerate the transformation of ‘private vices’
into ‘publick benefits’, Marxism exaggerates the otherness of socialism. All this is true
and, what is more, makes plausible why, after the end of ‘real socialism’, instead of
becoming fervent adherents of free market liberalism, many Marxists became skeptical
postmodernists. They no longer claim to know and fight for the ‘truth of the other’;
they criticize from within. I deem this attitude as very important, as an antidote to the
often antisocial excesses of market radicalism. The weakness or even danger of such a
position, however, might be that the critique of economic ‘laws’ and, correspondingly,
modern mechanistic explanations may lead to a postmodern denial of explanations at
all.
This problem, the question of how far postmodernism claims or can claim to be
itself scientifically relevant, the question of what, if anything, distinguishes science
from other forms of discourse is, to a certain extent, taken up in chapter seven – but
remains unsolved. Here Ruccio and Amariglio remind their readers of McCloskey’s
famous efforts to show that scientific economic discourse – formalized or not – can not
dispense with rhetorical tropes, and to make its point, has to rely on persuasion as much
as on evidential proofs. The astonishing fact however, is that the same McCloskey
fiercely attacks any kind of ‘ersatz economics’, i.e. any kind of uneducated, scientifi-
cally unfounded, amateurish everyday or sleight of hand explanations as essentially
wrong and somehow dangerous. Ruccio and Amariglio rather easily demonstrate that
everyday economics are in fact more coherent and structured than a mere pastiche of
improvised ad hoc interpretations, that there is a discourse or a rhetoric too. Polls regu-
larly reveal that a plurality, if not a majority of the population have similar explicit
views and explanations of economic phenomena which nevertheless diverge from eco-
nomic textbook knowledge. Advertising for example is not seen as a means to inform-
ing consumers but as a tricky way of inducing new desires and of raising prices. The
orthodox and ‘correct’ view that international free trade is a good thing is not shared by
up to a half of those interrogated, despite the efforts of a whole array of nation-wide
educational efforts to increase the ‘economic literacy’ of the general population. Are
these popular views necessarily wrong? Is it wrong for an auto worker to fear for his job
because international free trade threatens the profitability of his employer? Since there
are many other instances in which the opinions of everyday and professional economics
coincide it is not sufficient to explain the manifest and often enraged resistance of pro-
 8

fessional economists to their ‘illiterate’ counterparts politically by equating ‘ersatz’ with

left wing views. Ruccio and Amariglio conclude that it must be the threatened status of
scientific knowledge, the fear of not being able to control and authorize valid judg-
ments, that induce normally well-tempered economists to wage their war against the
economic populace. However, there is no conclusion in this chapter to the problem, not
even a profound discussion of whether there is anything – and if yes what that thing
might be – which would enable us to differentiate scientific from everyday discourses in
economics not only rhetorically, but with regard to their validity. Everyday reasoning –
as institutional analysis – might indeed rightly denounce the pretended political neutral-
ity of economic science. Yet does it follow from this ‘discovery’ that science is just an
alternative way of ‘reading’ the world? Does it follow that every explanation is as good
as another as long as there is some explanation at all? I doubt it.
Ruccio and Amariglio however seem not to. In their concluding chapter, they
confess that postmodernism, as its critics rightly insinuate, in fact implies ‘nihilism, an
undermining of the very possibility of carrying out economic analysis’ (291). Fortu-
nately, the authors do not really stick to this view. On the contrary, every chapter of
their book proves that they take the scientific critique of mainstream economics as a
serious and worthwhile business. What they do is give arguments and refute others,
claiming that non-orthodox views on economic phenomena and theories thereof are not
only possible but (more) convincing. Actually, neither ‘the’ economy, nor a unified,
coherent field of economic science exists. There is already, despite postmodernism, a
‘modern’ plurality of economic schools that compete in explaining the same or similar
phenomena, and that follow different political agendas. But if it were true – and I think
it is – that this plurality, and the relative openness of economics is a sign not of feeble-
ness but of strength, then it is not because ‘anything goes,’ but because scientific dis-
course is a realm not of unrestrained, but of deliberate choice. Notwithstanding these
critical remarks, Ruccio and Amariglio have written an informative and theoretically
thrilling book, elegant in style, whose reading I can only recommend. True, I would
have liked to see their somewhat paradoxical insistence on indeterminacy replaced less
flimsy foundations, or their radical as it is vague brand of postmodernism replaced by
some form of self-reflexive or performative analysis, which asks and shows the sense in
which the object of research is constituted by the research itself. Still, I am nevertheless
impressed by the range of themes and theories they tackle in what is – at least for
economists – a new, refreshing and provocative way.
9

Axel T. Paul
University of Freiburg/Br., Germany