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NEWS & LETTERS, August-September 2007Review-essay: Reclaiming Marx's CAPITALBy Tom More “[It] is improbable that [Marx’s] deductive powers were so limited that he repeatedly—in case after case, and year after year—drew invalid conclusions from simultaneist premises. Even a theorist of average caliber would be unlikely to blunder so consistently, and Marx was arguably somewhat above average.”—Reclaiming Marx’s ‘Capital’ In Reclaiming Marx’s ‘Capital’ [RMC], Andrew Kliman exposes many of the ways in which the leading lines of modern Marxist economics departs from the original Marxism of Marx. If he isn’t exactly a parody, the Marx that 20th century Marxist economists “correct” founders on an elementary mistake: in Chapter 9 of Vol. III of Capital, concerning the transformation of values into prices of production, he values inputs (in values or prices) and outputs (in values or prices) non-simultaneously, whereas Ladislaus Bortkiewicz, in a series of papers published in 1906-07, is taken to have demonstrated that Marx’s non-simultaneous valuation leads to an “internal contradiction” or a “spurious breakdown” of the reproduction process. This is the source of what Kliman calls “the myth of inconsistency,” which RMC sets out to “refute.” Twentieth century Marxist economics “corrects” Marx’s supposed mistake, based on Bortkiewicz’s “proof,” by adopting the analytic tool of simultaneous valuation of inputs and outputs. Today, many Marxist economists even hold that Marx’s “inconsistency” is “immediately obvious” (p. 152). Others have held that, “since sale prices and purchase prices must be equal, it is supposedly obvious that input and output prices must also be equal,” although “input and output prices can and usually do differ” (p. 153)! It also “seems obvious to some critics that Marx’s solution [of the transformation problem] suffers from dimensional inconsistency,” i.e., the idea that Marx measured inputs in labor-time terms but outputs in money terms (p. 153). Kliman writes, “The idea that a serious theorist” such as Marx “could commit such ridiculous errors and never notice that his sale and purchase prices differ, or that his values and prices are dimensionally inconsistent, is so implausible that it is sufficient reason to reject these interpretations.” IS MARX'S THEORY VALID? The question whether Marx’s theory is consistent has to be answered before we can ask the sexier question whether it is true. If Marx’s Capital is logically invalid, it cannot be sound. If it is unsound, then only illogical people would cling to it. But 20th century Marxist economics seems to offer a way out. Although Bortkiewicz intended his “proof” of “internal contradiction” to be a critique of Marx’s theory, he also pointed the way to recasting it in a system of simultaneous equations. If Marx’s original theory is inconsistent on account of non-simultaneous valuation, then it can be corrected by adopting simultaneous valuation. To readers inclined to ask so what, it can be conceded that the issue is technical. But if Marx’s theoretical conclusions matter, at least to Marxists, then so do the technical details of the arguments that generate them. In this sense, the scholasticism of value theory is not a mere scholasticism. The 20th century economic theory that calls itself “Marxist” draws conclusions quite different from Marx’s own. For example, with simultaneous valuation (the “correction” of Marx’s “mistake”), Marx’s three aggregate equalities (total profit equals total surplus value, total price equals total value, and the aggregate “price” rate of profit equals the aggregate “value” rate of profit) either fail to obtain or are at best “preserved in a formal sense only”(1); Marx’s law of the tendential fall in the rate of profit falls by the wayside, the law which he deemed to be “in every respect the most important law of modern political economy”; finally, concerning the conclusion that might seem most vital to Marx’s criticism of capitalism, that the sole source of surplus value and profits is the exploitation of workers, Marx’s original theory must be incoherent as well. If the crucial point of Marxism in any of its varieties is the notion of exploitation, it may appear that modern Marxist economics is still “Marxist” in the sense that really matters, because it retains what Michio Morishima called “The Fundamental Marxian Theorem” (FMT). Kliman writes: “The FMT is the crown jewel of simultaneist Marxian and Sraffian economics, for it supposedly demonstrates that the failure to ‘solve the transformation problem’ in a technical sense is no big deal, because Marx’s principal conclusion—the exploitation of workers is the sole source of profit—remains intact. Consequently, proponents of the FMT claim, we can scrap his incoherent and metaphysical theory without doing damage to the essential core of his critique of capitalism” (p. 15). Yet in the chapter he devotes to the FMT, Kliman demonstrates that it fails, and that the reason it fails is that it is based on simultaneous valuation: “Simultaneist definitions imply that total profit could be positive even though no surplus labor is extracted from workers, and total profit could be negative even though surplus labor is extracted” (pp. 175-76). If the FMT fails, however, then modern Marxist economics based on simultaneous valuation cannot even salvage the notion of exploitation in Marx’s sense from his critique of capitalism. If the results of RMC are correct, the unavoidable conclusion is that 20th century “simultaneist” Marxist economics is “Marxist” in name only and in fact an economic theory quite distinct from the original Marxism of Marx—better named “Bortkiewiczism” (or for that matter, “Dmitrievism,” “Sweezyism,” or “Sraffianism”), although these are awkward and unfamiliar names. There is an alternative, however, called the “temporal single-system interpretation” (TSSI) of Marx’s value theory, of which Kliman is a proponent. The TSSI answers to Kliman’s refutation of the myth of inconsistency, it tosses simultaneous valuation aside, it substitutes temporal valuation, and it achieves the result of demonstrating how Marx’s own major theoretical conclusions follow consistently from Marx’s own premises. In answer to the question how we know what Marx’s premises, arguments, and conclusions are, TSSI makes Marx make sense. From a logical point of view, if Marx was inconsistent, then he does not make sense, no matter how sexy or resonant he might otherwise be. In that case, what remains from Marx today are merely the fragments, tantalizing or not, of a moribund theoretical architecture buried in the cemetery of ideas. If Marx’s own presentation of the theory of value were internally inconsistent, then it would not be possible to “reclaim” Capital as a coherent, unified whole, for in that case, the massive edifice of Marx’s text would be a house divided against itself. If Marx committed a logical blunder in his overall argument, then that argument is invalid, therefore unsound. A sound mind will simply walk away. Kliman offers his own reasons why the question of validity needs to be taken seriously in the first chapter of RMC. Here I will suggest a further reason. Elsewhere in RMC, we discover that in Marx’s theory, the exploitation theory of profit, unlike the FMT, is internally related to the law of the tendential fall in the rate of profit, and that it has “revolutionary implications—the abolition of economic crises requires the abolition of value production” (p. 176). Although it is not Kliman’s purpose in RMC to develop the revolutionary implications of Marx’s Marxism, we can speculate that modern Marxist economics, in its technical and academic character, may not be fully open to them. On the related topic of Marx’s theory of capitalist crises, it is widely believed that Marx thought that their recurrence would lead inevitably “automatically” to the collapse of capitalism. In that case, of course, the need to “make revolution” is substantially diminished, and practice can take care of itself. WILL CAPITALISM COLLAPSE? However, as Kliman remarks, “Recurrent economic crises, not a declining rate of profit over the long term, are what Marx’s theory actually predicts” (p. 31). Economic crises are means of capitalist regeneration, not of its collapse: they overcome the tendency of the law of the tendential fall in the rate of profit. Kliman quotes Marx against Adam Smith from his 1861-63 ECONOMIC MANUSCRIPTS: “Adam Smith explains the fall in the rate of profit [as stemming] from a superabundance of capital…he is speaking of a permanent effect and this is wrong. As against this, the transitory superabundance of capital, overproduction and crises are something different. Permanent crises do not exist.”(2) On the other hand, Ernest Mandel, “a prominent advocate of the view that Marx predicted the collapse of capitalism,” appeals to a passage in Capital in which Marx writes, “The expropriators are expropriated.” Kliman writes, “this passage says nothing about the system’s collapse. Marx projects that the system’s tendencies will result in social revolution…and not because of any collapse, but because of the centralization of capital and growing revolt of the working class” (p. 31). Arguably, the centralization of capital happens “automatically.” We could say that it belongs to the “objective logic” of the process of accumulation. But what about the “ growing revolt of the working class”? In the same context in which Marx projects a social revolution, he writes, “At a certain stage of [capitalist] development, it brings into the world the material means of its own destruction. From that moment, new forces and new passions spring up in the bosom of society” (Capital, Vol. I, p. 928). In Hegelian language, the “new forces and new passions” belong, not to “objective logic” but to “subjective logic.” Although the subject of social revolution does not fall within the scope of RMC, it belongs to the first rank of importance in Marx’s theory of value. To draw out this linkage, however, we have to look elsewhere in Kliman’s corpus. In “Marx’s Concept of Intrinsic Value,” concerning “the significance of the intrinsic value concept,” a concept fundamental to the TSSI approach, he argues that Marx advances on classical political economy, of which Capital is a critique, in that Marx “employed [the concept of intrinsic value] to transform value from a category referring to relations between things to one referring to relations between humans (workers) and things.”(3) Although I cannot elaborate his argument here, Kliman draws this conclusion: “[As] values…commodities relate to one another as products of labor, not as mere things. This simple fact involves a radical change in perspective [from the Ricardian theory]. ‘Behind’ the relationship of the products to one another is the relationship of the individual product to its producer. The inquiry into value has thus shifted from one that refers to an object-object relation to one that refers to a subject-object relation.” THE SUBJECT/OBJECT RELATION The theory of value explains the object-object relation of the exchange of commodities in the sphere of circulation by going behind the factory door into “the hidden abode of production,” in order to disclose the subject-object relation of working people to the things they produce. In capitalist production, “this subject-object relation is an alienated one. It is because the worker is alienated from the labor she expends in producing the commodity that this labor can take on an autonomous existence ‘as an ‘objective’ property of that article, i.e. as its value.’”(4) Marx adds, “To the producers, therefore, the social relations between their private labors appear as what they are, i.e. they do not appear as direct social relations between persons in their work, but rather as material relations between persons and social relations between things.” In order to grasp the alienated subject-object relation of capitalist production that explains the “objectivity” of value, however, one needs a “subjective logic,” i.e., a logic that includes the category of the subject. Otherwise, Marx’s reference to the “new forces and new passions” that will bring about the expropriation of the expropriators is simply unintelligible. The passions of what? Machinery? Marx argues, not that the coming social revolution will come about through a nonexistent permanent economic crisis, but that it will come about only through the dialectic of a two-sided subject-object relation: not only “the centralization of capital” (on the side of the object), but vitally and crucially as well, “the growing revolt of the working class” (on the side of the subject). By contrast, it is difficult to see how Marxist economics based on simultaneous valuation can open onto the horizon of this revolutionary perspective. Kliman writes, “Simultaneous valuation is absolutely incompatible with the principle upon which Marx’s value theory is founded, the principle that value is determined by labor-time” (p. 78). Marx’s thesis that the value of a commodity is determined by the socially necessary labor-time required to produce it has a revolutionary implication that may not be readily apparent. As Marx presents it in Vol. I of Capital, the determination of value by labor time entails the distinction between “concrete” and “abstract” labor that he “was the first to point out and examine critically,” this distinction being “crucial to an understanding of political economy.” This split in the category, “labor,” seminally contains the fundamental contradiction of capitalist society. However, this contradiction is not an object-object relation, but a subject-object relation, the further investigation of which discloses both the alienation of working people from the work of their own hands and also the key to the transcendence of this alienation (not simply “the centralization of capital,” but also “the growing revolt of the working class”). Thus, if simultaneous valuation is incompatible with the determination of value by labor time, then interpretations (or “corrections”) of Marx’s theory based on such “a seemingly innocuous tool of analysis” (RMC, p. 78) will systematically and permanently obscure the revolutionary horizon within which Marx elaborates the theory of value. In the TSSI correction of the simultaneist “correction,” not only is the myth of inconsistency refuted, but an obstacle is cleared from the revolutionary path of praxis (the unity of theory with practice), which leads from an object-object relation to a subject-object relation, the recognition of the humanity of a worker, the humanistic character of Marx’s critique of political economy, the standpoint of “new forces and new passions,” “the growing revolt of the working class,” and the projection of a new society. NOTES 1. Dual-system interpretations of “values” and “prices,” flowing from simultaneous valuation, fail to preserve the aggregate equalities, but the “simultaneous single-system interpretation” (SSSI) of Fred Moseley and others claims to preserve them. However, Kliman demonstrates that the SSSI preserves them “in a formal sense only” (see pp. 163-65). “The voice is the voice of Marx, but the hands are the hands of Sraffa” (p. 164). 2. From Notebooks XII-XV of the 1861-63 ECONOMIC MANUSCRIPT, in MARX AND ENGELS COLLECTION WORKS, Vol. 32, (New York: International Publishers, 1989), p. 128. 3. This and subsequent quotations are taken from MARX'S CONCEPT OF INTRINSIC VALUE: ON THE UNITY OF VALUE, FETISHISM, AND THE ANALYSIS OF CAPITALIST PRODUCTION IN 'CAPITAL,' distributed by News and Letters (2003). It originally appeared in HISTORICAL MATERIALISM (2000: 89-113). 4. Here Kliman quotes CAPITAL, Vol. I, translated by Ben Fowkes, pp. 153-54. |
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