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Marxian economics MIA?

January 6th, 2010

The financial crisis has, justifiably, enhanced the reputation of Karl Marx as an economic thinker. Marx was the first economist to treat crises and panics as an inherent feature of capitalism rather than as an inexplicable, but fortunately temporary, departures from a natural equilibrium.

Unfortunately, most of his analytical effort, and even more, that of the school of thought that followed him, was devoted to pointless exercises in value theory[1]. Marx’s theory of crisis rested mainly on the idea of the falling rate of profit which seemed at the time to be both a theoretical inevitability and an observable trend. But with technological progress, there’s no necessity for the rate of profit to fall consistently, and it hasn’t. There are other ideas in Marx that might be developed to yield a better theory of crisis, but if this has been done, I haven’t seen it.

And, in the current crisis, Marxian economics seems to be pretty much Missing in Action. I haven’t seen much and what I have seen hasn’t added anything, in analytical terms, to the standard left-Keynesian analysis. Perhaps the problem is that just about everyone expects capitalism, in one form or another, to survive this crisis, contrary to the orthodox Marxist view where crises become ever more severe and eventually precipitate the revolutionary overthorw of the entire system. But it’s equally possible that I haven’t been looking in the right places. Can anyone recommend a good Marxian analysis of the current crisis?

fn1. If I get time, I’ll write a longer post on this point. In short, the idea underlying debates about value theory was that since the sale proceeds of production are divided between the owners of inputs to production (labour, capital, and land in the C19 division) there must exist some natural way of determining the share of the value of output for which each group is responsible. This is essentially an idea about average values, since averages added across a group are equal to the total for that group. But, as the neoclassical revolution of the 1870s showed, prices are determined by marginal costs and marginal rates of substitution and these don’t equal averages. Subsequent attempts to rescue a substantive role for value theory as opposed to price theory by Marxians, Austrians and Sraffians, not to mention the marginal productivity ethics of JB Clark and others, have gone nowhere.

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  1. melanie
    January 14th, 2010 at 21:15 | #1

    What do you mean by “Marx’s crises”? There have been crises since capitalism began – some more serious than others. I’m not convinced by the revolutionary overthrow either, but I do think there are periodic political crises produced by the economic ones and these lead to meaningful change (not always for the better). I meant to say that the political crisis produced by the Great Depression induced a political (and economic) transformation that abolished the sort of 19th century environment that Marx was writing about. The ramifications of that crisis could be seen as WW2, Labour/Social Democracy gaining power, the welfare state, independence of the colonies, etc.

  2. Dave
    January 19th, 2010 at 09:58 | #2

    Hi all
    Semiotext(e) has just published ‘The Violence of Financial Capitalism’ by Christian Marazzi. Its a good introduction to the economic work done in Italy by the post-Operaismo, one of the better trends of contemporary Marxism.

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