Missing the point, a little

For some reason, sociologists tend to get really into weak criticisms of neoclassical economics.

Classical political economy was premised on the labor theory of value—the idea that there is a concrete, economically meaningful measure of value that guides economic organization. Further, there was the idea that the economic needs that individuals had were also concrete—the consumption goods that permitted life to proceed. These goods included items like food, clothing, shelter, medicines, and perhaps schooling. So economic activity, according to the classical economists, was about something objective.

Neoclassical economy, by contrast, rejected even the idea of utility as a concrete or objective human reality. Instead, modern economics bracketed the reality of needs in favor of a metaphysics of subjective preference.  Economists no longer needed to think about what people needed, but rather simply what they preferred; so the utilities "consumers" ascribed to outcomes could be discovered by the quasi-experiments of “revealed preference.” Welfare was then defined as the extent to which the individual can satisfy the range of subjective preferences he or she happens to have.  So classical and modern economic paradigms differ substantially on what economic activity ought to achieve: satisfaction of material needs, for the classical economists; and satisfaction of subjective preferences, for the modern economists.

This might, in fact, correspond to neoclassicals' own account of their distinction from the economics of the first half of the 19th century, but I think it's at best a distinction without a difference. After all, economics has always retained a concept of the "wage bundle," which are the real commodities that the mass of individuals buy with their incomes. This is itself a matter of "revealed preferences": it is simply an empirical regularity that there are certain goods that individuals buy first and give up last. But how different is this from classical political economy? I don't remember what Smith and Ricardo say about this, but for Marx, while there is theoretically a "value of labor-power," which is the (value of) the commodities that workers need to reproduce their capacity to work from day to day, he concedes that what exactly  those commodities are (and in what quantity) is not only an open question but is also historically and socially variable. Indeed, if we think about it, the neoclassicals have a point (which is why I suspect this distinction is their preferred presentation): while there are certain categories of goods that a undeniably necessary (for instance food and shelter), once we get beyond the absolute bare minimum there is immediately room for variation in individual preferences: for instance, given the opportunity would one want tastier or more varied food, or a larger or more comfortable home, or maybe in a more desirable location . . . ?

Likewise, I think this writer exaggerates the incompatibility of Rawls' deliberation in the original position with utilitarianism. The two can be quite easily reconciled under the (entirely realistic) assumption that "levels" of welfare are not really symmetrical. It's generally accepted that the marginal utility of income is a diminishing function, and I'd further bet that after a bit of wrangling even neoclassical economists would accept that at the very bottom of the scale, the "disutility" of marginal subsistence, let alone death, is so large as to outweigh almost any increase in income on the top end. It's true that neoclassical economics assumes that an institutional framework enabling basically free expressions of individual preferences through market choices exists and again by assumption deals with situations in which choices are not constrained by immanent starvation and so can freely make trade-offs between goods with finite utilities. Yet to criticize them on these grounds can be easily met: "Sure, institutions matter," (this is, after all, the new mantra of the international neoliberal development apparatus) and, "Yes, poverty constrains consumer choice, but the solution to poverty is economic growth" (which has the virtue of  being more or less true).