Marxian economics

Marxian economics
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Marxian economics refers to economic theories on the functioning of capitalism based on the works of Karl Marx. Adherents of Marxian economics, particularly in academia, distinguish it from Marxism as a political ideology and sociological theory, arguing that Marx's approach to understanding the economy is intellectually independent of his advocacy of revolutionary socialism or his support of proletarian revolution.[1][2] Adherents consider Marx's economic theories to be the basis of a viable analytic framework, and an alternative to more conventional neoclassical economics. Marxian economists do not lean entirely upon the works of Marx and other widely-known Marxists; they draw from a range of Marxist and non-Marxist sources.

Marx's major work on political economy was Capital: A Critique of Political Economy (better known by its German title Das Kapital), a three-volume work, of which only the first volume was published in his lifetime (the others were published by Friedrich Engels from Marx's notes). One of Marx's early works, Critique of Political Economy, was mostly incorporated into Capital, especially the beginning of Volume I. Marx's notes made in preparation for writing Capital were published years later under the title Grundrisse.

Contents

Marx's response to classical economics

Marx's economics took as its starting point the work of the best-known economists of his day, the British classical economists. Among these economists were Adam Smith, Thomas Malthus, and David Ricardo.

Smith, in The Wealth of Nations, argued that the most important characteristic of a market economy was that it permitted a rapid growth in productive abilities. Smith claimed that a growing market stimulated a greater "division of labor" (i.e., specialization of businesses and/or workers) and this, in turn, led to greater productivity. Although Smith generally said little about laborers, he did note that an increased division of labor could at some point cause harm to those whose jobs became narrower and narrower as the division of labor expanded. Smith maintained that a laissez-faire economy would naturally correct itself over time.

Marx followed Smith by claiming that the most important beneficial economic consequence of capitalism was a rapid growth in productivity abilities. Marx also expanded greatly on the notion that laborers could come to harm as capitalism became more productive. Additionally, in Theories of Surplus Value, Marx noted, "We see the great advance made by Adam Smith beyond the Physiocrats in the analysis of surplus-value and hence of capital. In their view, it is only one definite kind of concrete labour—agricultural labour —that creates surplus-value....But to Adam Smith, it is general social labour—no matter in what use-values it manifests itself—the mere quantity of necessary labour, which creates value. Surplus-value, whether it takes the form of profit, rent, or the secondary form of interest, is nothing but a part of this labour, appropriated by the owners of the material conditions of labour in the exchange with living labour."

Malthus' claim, in "An Essay on the Principle of Population", that population growth was the primary cause of subsistence level wages for laborers provoked Marx to develop an alternative theory of wage determination. Whereas Malthus presented an ahistorical theory of population growth, Marx offered a theory of how a relative surplus population in capitalism tended to push wages to subsistence levels. Marx saw this relative surplus population as coming from economic causes and not from biological causes (as in Malthus). This economic-based theory of surplus population is often labeled as Marx's theory of the reserve army of labour.

Ricardo developed a theory of distribution within capitalism, that is, a theory of how the output of society is distributed to classes within society. The most mature version of this theory, presented in On the Principles of Political Economy and Taxation, was based on a labour theory of value in which the value of any produced object is equal to the labor embodied in the object. (Adam Smith also presented a labor theory of value but it was only incompletely realized.) Also notable in Ricardo's economic theory was that profit was a deduction from society's output and that wages and profit were inversely related: an increase in profit came at the expense of a reduction in wages. Marx built much of the formal economic analysis found in Capital on Ricardo's theory of the economy.

Marx's theory

Marx employed a labour theory of value, which holds that the value of a commodity is the socially necessary labour time invested in it. Capitalists, however, do not pay workers the full value of the commodities they produce, but compensate the worker for the necessary labor only (the worker's wage, which cover only the necessary means of subsistence in order to maintain him working in the present and his family in the future as a group -(the working class)- absolutely necessary for the existence of the capital-labor relation, the essence of the capitalist mode of production). This necessary labor is, in fact, only a fraction of a full working day, and the rest, the surplus-labor, is, in fact, pocketed by the capitalist. Marx theorized that the gap between the value a worker produces and his wage is a form of unpaid labour, known as surplus value. Moreover, Marx notes that markets tend to obscure the social relationships and processes of production, a phenomenon he termed commodity fetishism. People are highly aware of commodities, and usually don't think about the relationships and labour they represent.

Methodology

Marx used dialectics, a method that he adapted from the works of Georg Wilhelm Friedrich Hegel. Dialectics focuses on relation and change, and tries to avoid seeing the universe as composed of separate objects, each with essentially stable unchanging characteristics. One component of dialectics is abstraction; out of an undifferentiated mass of data or system conceived of as an organic whole, one abstracts portions to think about or to refer to. One may abstract objects, but also — and more typically — relations, and processes of change. An abstraction may be extensive or narrow, may focus on generalities or specifics, and may be made from various points of view. For example, a sale may be abstracted from a buyer's or a seller's point of view, and one may abstract a particular sale or sales in general. Another component is the dialectical deduction of categories. Marx uses Hegel's notion of categories, which are forms, for economics: The commodity form, the money form, the capital form etc. have to be systematically deduced instead of being grasped in an outward way as done by the bourgeois economists. This corresponds to Hegel's critique of Kant's transcendental philosophy.[3]

Marx regarded history as having passed through several stages. The details of his periodisation vary somewhat through his works, but it essentially is: Primitive Communism -- Slave societies -- Feudalism -- Capitalism -- Socialism -- Communism (capitalism being the present stage and communism the future). Marx occupied himself primarily with describing capitalism. Historians place the beginning of capitalism some time between about 1450 (Sombart) and some time in the 17th century (Hobsbawm).[4] A distinguishing feature of capitalism is that most of the products of human labour are produced for sale, rather than consumed by the producers or appropriated, essentially by force, by a ruling elite as in feudalism or slavery. (For example in feudalism, most agricultural produce was either consumed by the peasants who grew it, or appropriated by feudal masters. It almost never was sold for money.) Marx defines a commodity as a product of human labour that is produced for sale in a market. Thus in capitalism, most of the products of human labour are commodities. Marx began his major work on economics, Capital, with a discussion of commodities; Chapter One is called "Commodities".

Commodities

"The wealth of those societies in which the capitalist mode of production prevails, presents itself as 'an immense accumulation of commodities,' its unit being a single commodity." (First sentence of Capital, Volume I.)

"The common substance that manifests itself in the exchange value of commodities whenever they are exchanged, is their value." (Capital, I, Chap I, section 1.)

The worth of a commodity can be conceived of in two different ways, which Marx calls use-value and value. A commodity's use-value is its usefulness for fulfilling some practical purpose; for example, the use-value of a piece of food is that it provides nourishment and pleasurable taste; the use value of a hammer, that it can drive nails. Value is, on the other hand, a measure of a commodity's worth in comparison to other commodities. It is closely related to exchange-value, the ratio at which commodities should be traded for one another, but not identical: value is at a more general level of abstraction; exchange-value is a realisation or form of it.

Marx argued that if value is a property common to all commodities, then whatever it is derived from, whatever determines it, must be common to all commodities. The only relevant thing that is, in Marx's view, common to all commodities is human labour: they are all produced by human labour.

"This common 'something' cannot be either a geometrical, a chemical, or any other natural property of commodities. . . . If then we leave out of consideration the use-value of commodities, they have only one common property left, that of being products of labour." (Capital I, I, 1.)

Marx concluded that the value of a commodity is simply the amount of human labour required to produce it. Thus Marx adopted a labour theory of value, as had his predecessors Ricardo and MacCulloch; Marx himself traced the existence of the theory at least as far back as an anonymous work, Some Thoughts on the Interest of Money in General, and Particularly the Publick Funds, &c., published in London around 1739 or 1740.[5] Marx placed some restrictions on the validity of his value theory: he said that in order for it to hold, the commodity must not be a useless item; and it is not the actual amount of labour that went into producing a particular individual commodity that determines its value, but the amount of labour that a worker of average energy and ability, working with average intensity, using the prevailing techniques of the day, would need to produce it. A formal statement of the law is: the value of a commodity is equal to the average socially necessary labour time required for its production. (Capital, I, I—p 39 in Progress Publishers, Moscow, ed'n.)

Marx's contention was that commodities tend, at a fairly general level of abstraction, to exchange at value; that is, if Commodity A, whose value is "V", is traded for Commodity B, it will tend to fetch an amount of Commodity B whose value is the same, "V". Particular circumstances will cause divergence from this rule, however.

Money

"Paper money is a token representing gold or money." (Capital, I, Chap III, section 2, part c.)

Marx held that metallic money, such as gold, is a commodity, and its value is the labour time necessary to produce it (mine it, smelt it, etc.). Gold and silver are conventionally used as money because they embody a large amount of labour in a small, durable, form, which is convenient. Paper money is a representation of gold or silver, almost without value of its own but held in circulation by state decree.

Production

"If, on the other hand, the subject of labour has, so to say, been filtered through previous labour, we call it raw material. . . ." (Capital, I, Chap VII, section 1.)

Marx lists the elementary factors of production as:

  1. labour, "the personal activity of man." (Capital, I, VII, 1.)
  2. the subject of labour: the thing worked on.
  3. the instruments of labour: tools, labouring domestic animals like horses, chemicals used in modifying the subject, etc.

Some subjects of labour are available directly from Nature: uncaught fish, unmined coal, etc. Others are results of a previous stage of production; these are known as raw materials, such as flour or yarn. Workshops, canals, and roads are considered instruments of labour. (Capital, I, VII, 1.) Coal for boilers, oil for wheels, and hay for draft horses is considered raw material, not instruments of labour. The subjects of labour and instruments of labour together are called the means of production.  Relations of production are the relations human beings adopt toward each other as part of the production process. In capitalism, wage labour and private property are part of the relations of production.

Calculation of value of a product:
If labour is performed directly on Nature and with instruments of negligible value, the value of the product is simply the labour time. If labour is performed on something that is itself the product of previous labour (that is, on a raw material), using instruments that have some value, the value of the product is the value of the raw material, plus depreciation on the instruments, plus the labour time. Depreciation may be figured simply by dividing the value of the instruments by their working life; eg. if a lathe worth £1,000 lasts in use 10 years it imparts value to the product at a rate of £100 per year.

value   =   mp  +  lt

 Where:    value is the value of the product;
mp is the value of the means of production;
lt is the labour time.

Labour

At least, in a fully capitalist society almost all labour is wage labour. In present Western society homemaking is clearly still a huge area of un-waged labour; however it is becoming increasingly commodified as women enter the workforce (that is not to say that women should not be empowered in this way). Convenience foods, day care, hired cleaners, replacing clothes versus mending them, disposable household products generally—all represent subsumption of this formerly non-capitalist area of production into capitalism.

Labour in precapitalist societies is either performed to fulfill one's own or one's family's wants directly (e.g. subsistence labour), or some form of forced labour, such as slavery or serfdom; only rarely is labour performed for a wage. In capitalist society it is the reverse: almost all labour is wage labour.

Since most labour in a capitalist society is labour exchanged by the worker in return for a price (his wage), it has the form of a commodity: something sold on the market for a price. Therefore Marx held that labour in a capitalist society is a commodity. Like any commodity it has a use-value and a value. Its use value—the useful thing it provides—is the actual accomplishing of some task: spinning, weaving, shovelling, babysitting, or whatever. Its value is determined by the same criterion as is the value of any commodity: its value is the amount of socially necessary labour time needed to create it. This is the amount of socially necessary labour time needed to create the food, housing, clothes, etc. needed to keep the worker alive and able to work: his means of subsistence. This amount must also include something to provide for the raising of the worker's children who will someday be needed to replace his. Marx noted that what is "necessary" for a worker is not merely determined by biological requirements; it is also socially determined: society creates some needs for the worker. For example, some clothing even in warm weather, and some furniture, are not biological necessities, but, in many societies, are necessities in the present sense.

(Technically, Marx contended that what is sold on the market is labour-power, the ability or capacity of a person to do work. The term labour in Marx, is the actual doing of some work. Whether the distinction is essential is debatable. In what follows we will write labour (-power) where Marx would have written labour-power. The reader can choose whether to read this as "labour" or "labour-power".)

Labour(-power) is unique among commodities in that it is the only commodity that both has value and creates value: all commodities have value, only labour(-power) creates value. The value created by labour(-power) is simply the time during which it was exerted. This follows from the labour theory of value's definition of value as embodied labour time.

Example:
Suppose I[who?] spend three hours creating some product; and suppose also that in the process I consume means of production that sometime in the past required two hours to produce – i.e., they have a value of two hours. The value of my product will be:
mp + lt   =   2 + 3   =   5     (in units of hours.)
It is apparent that I have increased the value that previously existed by 3 units; I have created 3 units of value. (This is assuming that my labour is of average quality, but more or less efficient labour can be accounted for simply by pro-rating the time: e.g., if I work only two-thirds as fast as the average person, we could say that in 3 hours I create a value of only 2.)

The unique fact about labour(-power)–that it both has value and creates value–is of paramount importance because those two quantities are in general not equal. The difference between them is the source of profit to employers of labour and it is what drives the capitalist system. An employer (a capitalist) buys labour(-power) at its value (or tends to, at least). He receives from it the value it creates. If the latter is greater than the former—if the value created by labour is greater than the wage—the capitalist gains by using that labour. This difference between values, which the capitalist keeps, Marx called surplus value. The income statement (or Profit and Loss account) of the capitalist is this:

Expenditure:
=  mp + lv      where lv is the value of the labour(-power).
Income:
=  value of product
=  mp + lt
Difference:
=  lt - lv
=  surplus value

There is a large moral element in Marx's treatment of surplus value because surplus value is unearned. It may be that the capitalist does some work in the production of the product—in an accounting capacity perhaps—but in this capacity he is merely functioning as part of the work force and his labour contribution may be treated like any other. In particular, the time during which he labours himself on the product must be figured into its value, so the income becomes:

Income:
=  value of product
=  mp  +  lt (other workers)  +  lt (capitalist while he works)

He still makes money on the difference between lt (other workers) and lv (other workers).

Besides looking at surplus-value creation from the point of view of value, Marx sometimes looked at it from the point of view of time. This leads to the same process being described in alternate terminology, as explained in the remainder of this paragraph. The worker creates value continuously during the time he is working; the longer he works, the more value he creates. Suppose he is paid by the day. At some point during the day he has created enough value for the capitalist to pay his wage; the time he works beyond that point is time during which he creates value that the capitalist gets to keep—surplus value. Marx thus divided the working day conceptually into two portions: the first portion, during which the worker creates enough value to just cover his wages (the value of his means of subsistence, if labour is paid at value) he called "necessary labour time"; and the rest, during which he creates surplus value for the capitalist, he called "surplus labour time".

Marx called the portion of capital spent on means of production constant capital, and that spent on labour(-power) variable capital. His reasoning for this was as follows. Recall the equations for the capitalist's expenditure and income:

Expenditure   =   mp + lv
Value of product   =   mp + lt

According to these two equations, the value of the means of production (mp) is simply transferred to the value of the product without alteration; the same term mp appears in the expenditure and the value of the product. Marx thus called capital spent on mp "constant" -- because the labour process doesn't change it. On the other hand, capital spent on labour(-power) "expands" during production because  lt > lv  . Marx therefore called it "variable".

The ratio between the wages [the value of the labour(-power)] and the surplus value—or, alternatively speaking, the ratio between the necessary and surplus labour time—Marx called the rate of surplus value.

s′  =  s / V  =  st / lt Where:    s′    is the rate of surplus value
s is the surplus value;
V is the variable capital (the wages);
st is the surplus labour time;
lt is the necessary labour time;

Marx held that the rate of surplus-value is determined by struggle between the working class and the capitalist class. The workers attempt to increase necessary labour time (by demanding higher wages) and/or decrease surplus labour time. Two of their main weapons are trade union activity and getting legislation passed to limit the length of the working day. The capitalists attempt to do the opposite, their main lever being the fact that a worker will starve if the capitalists refuse to hire him. Marx presents considerable amounts of data in Capital (e.g. Volume I, Chap's X, XV) on wages and working conditions in England up to the late 1860s, and on the struggle via the Factory Acts to achieve legislated limits on the length of the working day for women and children. (Ca. 1833: limited to 12 hours for children, eight hours for those under 13; 1844: 12 hours for women, 6½ or seven hours for children; 1848: 10 hours for women and young persons.) These applied at first only to parts of the textile industry; between 1845 and 1863 several other industries, notably baking, were brought under the purview of these acts.[6]

Effect of technical progress

According to Marx, the amount of actual product (i.e. use-value) that a typical worker produces in a given amount of time is the productivity of labour. It has tended to increase under capitalism. This is due to increase in the scale of enterprise, to specialisation of labour, and to the introduction of machinery. The immediate result of this is that the value of a given item tends to decrease, because the labour time necessary to produce it becomes less. In a given amount of time, labour produces more items, but each unit has less value; the total value created per time remains the same. This means that the means of subsistence become cheaper; therefore the value of labour power or necessary labour time becomes less. If the length of the working day remains the same, this results in an increase in the surplus labour time and the rate of surplus value.

Technological advancement tends to increase the amount of capital needed to start a business, and it tends to result in an increasing preponderance of capital being spent on means of production (constant capital) as opposed to labour (variable capital). Marx called the ratio of these two kinds of capital the composition of capital.

Current theorizing in Marxian economics

Marxian economics has been built upon by many others, beginning almost at the moment of Marx's death. The second and third volumes of Das Kapital were edited by his close associate Friedrich Engels, based on Marx's notes. Marx's Theories of Surplus value was edited by Karl Kautsky. The Marxian value theory and the Perron-Frobenius theorem on the positive eigenvector of a positive matrix [7] are fundamental to mathematical treatments of Marxist economics.

Colleges and universities that either offer one or more courses on Marxian economics, or that teach one or more economics courses on other topics from a perspective that they designate as Marxian or Marxist, include the University of Utah, University of Massachusetts-Amherst, University of Massachusetts-Boston, University of Maine, New School for Social Research, University of Missouri–Kansas City, Colorado State University, University of Leeds, University of Manchester, University of Sheffield, York University (Toronto), School of Oriental and African Studies, University of California at Riverside, University of Maastricht, and University of Bremen.[8]

English-language journals include Capital & Class, Historical Materialism, Monthly Review, and Rethinking Marxism, Review of Radical Political Economics, and Studies in Political Economy.

Criticism

Main article: Criticisms of Marxism
See also Criticisms of Socialism, Criticism of communism, and Criticisms of Communist party rule for a discussion on specific criticisms of Communist states.

Much of the critique of classical Marxian economics came from Marxian economists that revised Marx's original theory, or by the Austrian school of economics. V. K. Dmitriev, writing in 1898,[9] Ladislaus von Bortkiewicz, writing in 1906-07,[10] and subsequent critics have alleged that Marx's value theory and law of the tendency of the rate of profit to fall are internally inconsistent. In other words, the critics allege that Marx drew conclusions that actually do not follow from his theoretical premises. Once these alleged errors are corrected, his conclusion that aggregate price and profit are determined by, and equal to, aggregate value and surplus value no longer holds true. This result calls into question his theory that the exploitation of workers is the sole source of profit.[11]

Whether the rate of profit in capitalism has, as Marx predicted, tended to fall is a subject of debate. N. Okishio, in 1961, devised a theorem (Okishio's theorem) showing that if capitalists pursue cost-cutting techniques and if the real wage does not rise, the rate of profit must rise.[12]

The inconsistency allegations have been a prominent feature of Marxian economics and the debate surrounding it since the 1970s.[13] Andrew Kliman argues that, since internally inconsistent theories cannot possibly be right, the inconsistency charges serve to legitimate the suppression of Marx's critique of political economy and current-day research based upon it, as well as the correction of Marx's alleged inconsistencies.[14]

Critics who have alleged that Marx has been proved internally inconsistent include former and current Marxian and/or Sraffian economists, such as Paul Sweezy,[15] Nobuo Okishio,[16] Ian Steedman,[17] John Roemer,[18] Gary Mongiovi,[19] and David Laibman,[20] who propose that the field be grounded in their correct versions of Marxian economics instead of in Marx's critique of political economy in the original form in which he presented and developed it in Capital.[21]

Proponents of the Temporal Single System Interpretation (TSSI) of Marx's value theory claim that the supposed inconsistencies are actually the result of misinterpretation; they argue that when Marx's theory is understood as "temporal" and "single-system," the alleged internal inconsistencies disappear. In a recent survey of the debate, a proponent of the TSSI concludes that "the proofs of inconsistency are no longer defended; the entire case against Marx has been reduced to the interpretive issue."[22]

Relevance to economics

Marxist economics was assessed in 1988 by Robert M. Solow:

Marx was an important and influential thinker, and Marxism has been a doctrine with intellectual and practical influence. The fact is, however, that most serious English-speaking economists regard Marxist economics as an irrelevant dead end.[23]

"Economists working in the Marxian-Sraffian tradition represent a small minority of modern economists, and that their writings have virtually no impact upon the professional work of most economists in major English-language universities", according to George Stigler.[24]

See also

Footnotes

  1. ^ "The Neo-Marxian blood Schools". The New School. http://cepa.newschool.edu/het/schools/neomarx.htm. Retrieved 2007-08-23. 
  2. ^ Munro, John. "Some Basic Principles of Marxian Economics". University of Toronto. http://www.economics.utoronto.ca/munro5/MARXECON.pdf. Retrieved 2007-08-23. 
  3. ^ See Helmut Reichelt, quoted in: Kubota, Ken: Die dialektische Darstellung des allgemeinen Begriffs des Kapitals im Lichte der Philosophie Hegels. Zur logischen Analyse der politischen Ökonomie unter besonderer Berücksichtigung Adornos und der Forschungsergebnisse von Rubin, Backhaus, Reichelt, Uno und Sekine, in: Beiträge zur Marx-Engels-Forschung. Neue Folge 2009, pp. 199-224, here p. 199.
  4. ^ Angus Maddison, Phases of Capitalist Development. Oxford, 1982. P 256, note.
  5. ^ Capital, Vol I, Chap I (p 39 in the Progress Publishers, Moscow, edition).
  6. ^ Capital, I, Chap X, sections 5, 6
  7. ^ Fujimori, Y. (1982). "Modern Analysis of Value Theory". Lecture Notes in Economics and Mathematical Systems. Springer. 
  8. ^ Schools. HETecon.com. Retrieved on: August 23, 2007.
  9. ^ V. K. Dmitriev, 1974 (1898), Economic Essays on Value, Competition and Utility. Cambridge: Cambridge Univ. Press.
  10. ^ Ladislaus von Bortkiewicz, 1952 (1906–1907), "Value and Price in the Marxian System", International Economic Papers 2, 5–60; Ladislaus von Bortkiewicz, 1984 (1907), "On the Correction of Marx’s Fundamental Theoretical Construction in the Third Volume of Capital". In Eugen von Böhm-Bawerk 1984 (1896), Karl Marx and the Close of his System, Philadelphia: Orion Editions.
  11. ^ M. C. Howard and J. E. King. (1992) A History of Marxian Economics: Volume II, 1929–1990, chapter 12, sect. III. Princeton, NJ: Princeton Univ. Press.
  12. ^ M. C. Howard and J. E. King. (1992) A History of Marxian Economics: Volume II, 1929–1990, chapter 7, sects. II-IV. Princeton, NJ: Princeton Univ. Press.
  13. ^ See M. C. Howard and J. E. King, 1992, A History of Marxian Economics: Volume II, 1929–1990. Princeton, NJ: Princeton Univ. Press.
  14. ^ Kliman states that "Marx’s value theory would be necessarily wrong if it were internally inconsistent. Internally inconsistent theories may be appealing, intuitively plausible and even obvious, and consistent with all available empirical evidence––but they cannot be right. It is necessary to reject them or correct them. Thus the alleged proofs of inconsistency trump all other considerations, disqualifying Marx’s theory at the starting gate. By doing so, they provide the principal justification for the suppression of this theory as well as the suppression of, and the denial of resources needed to carry out, present-day research based upon it. This greatly inhibits its further development. So does the very charge of inconsistency. What person of intellectual integrity would want to join a research program founded on (what he believes to be) a theory that is internally inconsistent and therefore false?" (Andrew Kliman, Reclaiming Marx's "Capital": A Refutation of the Myth of Inconsistency, Lanham, MD: Lexington Books, 2007, p. 3, emphasis in original). The connection between the inconsistency allegations and the lack of study of Marx’s theories was argued further by John Cassidy ("The Return of Karl Marx," The New Yorker, Oct. 20 & 27, 1997, p. 252): "His mathematical model of the economy, which depended on the idea that labor is the source of all value, was riven with internal inconsistencies and is rarely studied these days."
  15. ^ "Only one conclusion is possible, namely, that the Marxian method of transformation [of commodity values into prices of production] is logically unsatisfactory." Paul M. Sweezy, 1970 (1942), The Theory of Capitalist Development, p. 15. New York: Modern Reader Paperbacks.
  16. ^ Nobuo Okishio, 1961, "Technical Changes and the Rate of Profit," Kobe University Economic Review 7, pp. 85–99.
  17. ^ "[P]hysical quantities ... suffice to determine the rate of profit (and the associated prices of production) .... [I]t follows that value magnitudes are, at best, redundant in the determination of the rate of profit (and prices of production)." "Marx’s value reasoning––hardly a peripheral aspect of his work––must therefore be abandoned, in the interest of developing a coherent materialist theory of capitalism." Ian Steedman, 1977, Marx after Sraffa, pp. 202, 207. London: New Left Books.
  18. ^ "[The falling-rate-of-profit] position is rebutted in Chapter 5 by a theorem which states that ... competitive innovations result in a rising rate of profit. . There seems to be no hope for a theory of the falling rate of profit within the strict confines of the environment that Marx suggested as relevant." John Roemer, Analytical Foundations of Marxian Economic Theory, p. 12. Cambridge: Cambridge Univ. Press, 1981.
  19. ^ Vulgar Economy in Marxian Garb: A Critique of Temporal Single System Marxism, Gary Mongiovi, 2002, Review of Radical Political Economics 34:4, p. 393. "Marx did make a number of errors in elaborating his theory of value and the profit rate .... [H]is would-be Temporal Single System defenders ... camouflage Marx’s errors." "Marx’s value analysis does indeed contain errors." (abstract).
  20. ^ "An Error II is an inconsistency, whose removal through development of the theory leaves the foundations of the theory intact. Now I believe that Marx left us with a few Errors II." David Laibman, "Rhetoric and Substance in Value Theory" in Alan Freeman, Andrew Kliman, and Julian Wells (eds.), The New Value Controversy and the Foundations of Economics, Cheltenham, UK: Edward Elgar, 2004, p. 17
  21. ^ See Andrew Kliman, Reclaiming Marx's "Capital": A Refutation of the Myth of Inconsistency, esp. pp. 210-211.
  22. ^ Andrew Kliman, Reclaiming Marx's "Capital", Lanham, MD: Lexington Books, p. 208, emphases in original.
  23. ^ Robert M. Solow, New York Times "The Wide, Wide World of Wealth", March 28, 1988.
  24. ^ Stigler, George J. (December 1988). "Palgrave's Dictionary of Economics". Journal of Economic Literature (American Economic Association) 26 (4): 1729–1736. JSTOR 2726859. 

References

Further reading

  • Althusser, Louis and Balibar, Étienne. Reading Capital. London: Verso, 2009.
  • Bottomore, Tom, ed. A Dictionary of Marxist Thought. Oxford: Blackwell, 1998.
  • Fine, Ben. Marx's Capital. 5th ed. London: Pluto, 2010.
  • Harvey, David. A Companion to Marx's Capital. London: Verso, 2010.
  • Harvey, David. The Limits of Capital. London: Verso, 2006.
  • Mandel, Ernest. Marxist Economic Theory. New York: Monthly Review Press, 1970.
  • Mandel, Ernest. The Formation of the Economic Thought of Karl Marx. New York: Monthly Review Press, 1977.
  • Morishima, Michio. Marx's Economics: A Dual Theory of Value and Growth. Cambridge: Cambridge University Press, 1973.
  • Postone, Moishe. Time, Labor, and Social Domination: A Reinterpretation of Marx's Critical Theory. Cambridge [England]: Cambridge University Press, 1993.
  • Saad-Filho, Alfredo. The Value of Marx: Political Economy for Contemporary Capitalism. London: Routledge, 2002.

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