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Economics 287
ic analysis. The depression continued what the first world war had begun: the
destruction of the bases of a social order founded on capitalist rules, and the
sapping of its social resistance. Western economics was invited to produce sug-
gestions and an economic theory to ensure full employment, andutilize the often
largely idle productive capacity of factories. It was asked to indicate how all
resources could best be mobilized for military purposes. Finally, there was a
need for an economic technology. This was a less transitory need, deriving from
the very nature of contemporary capitalism, in which large-scale firms are the
dominant factor; even less than the nineteenth century economy could such an
economy develop automatically.
For these purposes, the approach of the historical school was much too ab-
stract. Life had left it and its theories behind.z
It was only after the solution of the problems raised by the crisis and by the
phenomenon of the very large firms had been solved (i.e. the post-war period),
that some interest began to be taken in the works of Sombart and especially in
those of Weber.3
ID. From the outset, the Marxist approach to economics was both historical and
theoretical. The writings of Marx, and later those of Hilferding, Rosa Luxem-
burg and Lenin, were concerned with the theoretical analysis of constants in the
birth, development and decline of the capitalist mode of production. Respond-
ing to the call of the social movement they, as its ideological leaders, purposely
concentrated on the critical analysis of the social order, and the changes of struc-
ture that seemed most likely to produce the new polity they desired.
Refused the possibility of developing in academic centres, and considered as
the theoretical arm of social forces which would radically alter the world, Marx-
ist economics tackled the problems which seemed of more long-term impor-
tance for most of society, and concentrated on analysing the phenomena and
processes that underly growth and dynamics. Regarding the economic develop-
ment of a society as something coherent in itself, it thereby introduced into eco-
nomic analysis certain lasting values that had long been neglected by academic
economics.
However, certain methodological weaknesses, similar in some ways to those
of the historical school, appeared in the twenties and thirties. The one-sided
emphasis on the allegedly ephemeral character of existing production relations
was often simply wishful thinking, and excess of historicism.
This weakness in Marxist economics led to an open crisis when it had to be
applied to a socialist economy. Armed with the Marxist theory of socio-econom-
ic relations, the socialists were fairly well informed about the economic basis
of the capitalist class structure. They knew what had to be done to destroy this
structure and lay the foundations of a new, and they knew how the State could
be employed for this purpose. But, until recently, they never tackled within the
context of a socialist economy such questions as a rational allocation of resour-
ces or a positive theory of prices.
Karl Marx was much too absorbed in investigating particular characteristics
of the capitalist system to grasp the significance of general economic laws and