Lakatos' MSRP is utilized to provide a response to Koertge's claim (in her ‘Does Social Science Really Need Metaphysics?’) that the heuristic significance of metaphysics has been vastly overrated. By outlining the hard cores and positive heuristics of the two major research programmes in economics (namely, the ‘orthodox’ and ‘Marxist’ research programmes), the paper demonstrates (in opposition to Koertge's claim) not only that the metaphysical statements in the respective hard cores are far from vague but also how these exert an (...) important regulative influence both on the theories and economic policy recommendations generated within the respective programmes. It also indicates how the adoption of the MSRP method of appraisal in economics would help to protect against the danger of entrenched metaphysical dogmatism with its implications not only for economic policy recommendations but also for moral and political recommendations. * We appreciate the assistance given by Professor N. Koertge, who provided us with translations of her articles, and the helpful comments of an anonymous referee. (shrink)

This paper contends that Marx develops in Volume III of Capital an incisive conceptual framework in which excessive credit creation, indebtedness and speculation play a critical and growing role in the reproduction of social capital on an extended basis; however, given the decentralised and anarchic nature of capitalist production, the credit system does so in a highly erratic and contradictory manner which only postpones the inevitable day of reckoning. The paper also highlights Marx's relatively neglected but highly important analysis of (...) the separation of ownership from management in the advanced capitalism of his day, England, and its modern-day implications for excessive risk-taking and debt-fuelled speculation up until the eve of the crash. More importantly, the paper argues that in Volumes II and III, Marx implicitly connected the expanding role of credit (which he associated with the development of capitalism) to a significant reduction in the turnover period of capital, thereby boosting the rate of surplus-value, and countering in a highly erratic and contradictory manner, the fall in the rate of profit. The growing role of credit has been relatively ignored in the Marxian literature as an important counteracting factor to the law of the declining rate of profit. It is not mentioned at all by Marx in his famous Chapter XIV, Vol. III of Capital where he discusses other important counteracting forces to the falling rate of profit, nor by Engels (in this particular context) who edited both Volumes II and III. (shrink)