This isnt me trying to rag on economics or social sciences in general, but ive found the disconnect on how easily they can use these words but in economic settings they dont really appear much. Even in this sub when you would ask someone what either of those two mean, you would get need to define them first rigorously before even getting started on discussing the concepts. Maybe its just this sub being better moderated, but what explains the somehow different approaches other social sciences has compared to economics?
Why do other social science have definitions for words like "Capitalism" or "Exploitation" but not Economics?
byu/Dangerous_Switch_716 inAskEconomics
Posted by Dangerous_Switch_716
2 Comments
Because the concepts are very broadly defined (if not ill defined) and often vary by person.
Much of empirical economics, outside of the efficiency/optimal lit, also take the world as is, and if you can’t provide an easily quantifiable definition of -isms, they aren’t much use.
There’s a reason why any attempts to measure these (usually by WHO, WB, UN, …) are indices.
Edit: define “exploitation”. Is it people not getting paid what THEY think they are worth? Being paid below $X? Wage gaps?
We use different language these days. Comparative Economic Systems looks at economies that are primarily market based, mixed, or mostly centrally planned. The tendency to stay away from “capitalism” as a term for an economic system can be muddy whereas we can better describe economic activity as being market based on centrally planned. Capitalism versus Socialism is a lot less precise and stray into describing ideologies over quantifiable market systems. We tend to be interested in the production and allocation of resources, and while that is part of capitalism/socialism, those terms are far more reaching in describing political philosophy and ownership classes which are less a topic of modern economics. So we tend to focus specifically on how resource allocation occurs, not the entirety of those terms and implications of them.
Another issue is that in studying the *real world*, real economies are largely mixed between what might be called capitalist and socialist. In the US for example, we have markets for much of our economic activity, but rely on centrally planning for much of it.
Lastly, definitions of capitalism and socialism not only stray across broader socioeconomic and political considerations than just resource allocation, they also get used differently. If we say socialism is when “workers own the means of production” then others interpret it as economic planning through a central government, or others will consider it a high amount of redistribution. So what makes an economic system “socialism” doesn’t have a universal interpretation. Capitalism similarly talks about private ownership of capital, so coops are not capitalism? They operate in a market economy. Or when companies provide stock options to workers, is that socialism? These terms are more interested in class conflict and broader social interactions, so it’s better to be precise when in economics to talk about central planning versus market economies or mixed.
Exploitation can’t be defined in a way like Marx did because it is fundamentally not something we can measure – there is no precise metric for labor power and largely that comes from the labor theory of value which is not useful in economics. so if we did use exploitation we would have to define it. I’ve seen some references to exploitation as being the difference between wage and the marginal product of labor, but that is quite different than Marx would define it. And since exploitation can be seen as a normative concept, to objectively/positively define exploitation would be somewhat arbitrary. Neutral terms tend to be preferred or we are basically boring the concept in name only.
“Price-coat markup” (Lerner index) refers to the gap between the marginal cost and the price such as with monopolies, so the wage-product markdown would be the corresponding measure for monopsony in a labor market where wages are below the MPL. No need for “exploitation” because exploitation would imply a moral wrong, not a neutral measure.
Lastly, heterodox economics exists and will be more keen on words like capitalism, class, and exploitation, but the biggest gap between mainstream and heterodox is they tend to ask completely different questions and use completely different language/terminology. And, well, they are not common or generally part of research outside of insular journals and schools.