Marxist Economic Theory
I suppose it should not be surprising that Marxian economic theory is little studied in the United States; I understand that the works of Paul Samuelson are largely ignored in the Soviet Union. Yet there is a reason for the lack of attention paid to Marxian economics in our universities, beyond their heretical nature. It is because so much of the work of Marx is either impossibly difficult to understand or—to mention the unmentionable—terribly boring to study.
Of course there are parts of the Marxian canon to which these words could never apply: the Manifesto, the brilliant historical essays, the best parts of Capital—above all, the unforgettable picture of the Working Day, the passionate chapter on Primitive Accumulation, and the apocalyptic climax to Volume 1 where the integument bursts asunder and the expropriators are expropriated. But for the student who wants to master the system of Marxian economics, the task of reading the 2,000 pages of Capital is enough to daunt all but a very few. Much of the argument is tediously drawn out and, in critical places, obscure or incorrect, such as the famous transition from value to prices. There is no discernible orderly progression within the work which seems continuously to double back on itself. And the empirical material, however interesting as historical illustration, is hopelessly out of touch with the realities of modern-day capitalism.
As a result, those few intrepid students who set out to discover what Marxian economics is all about are usually forced to revert to a secondary source, of which the best for many years has been Paul Sweezy’s The Theory of Capitalist Development. The trouble with such books, however, is that essentially they are efforts to unscramble and clarify the Master, rather than efforts to restate, de novo, and on the basis of fresh evidence, the theoretical explanation of capitalism inherent in Marx’s approach. Hence the belated appearance of Ernest Mandel’s book (first published in France seven years ago) is an event of great importance. For the purpose of this carefully organized, lucidly written, and strongly argued book is, in Mandel’s italicized words, “to start from the empirical data of the science of today to examine whether or not the essence of Marx’s economic propositions remains valid.”
Mandel is a well-known Marxist writer and critic, the editor of the Belgian paper La Gauche, and clearly a person of great erudition. Thirty-six pages of bibliographic references testify to the breadth of research that has gone into this work. What is more noticeable about the list of citations, however, is the relatively small percentage of standard Marxist works it contains. An inexpressibly refreshing sense of release from the intellectual straitjacket of past Marxology is announced in the Introduction, where Mandel writes:
The reader who expects to find numerous quotations from Marx and Engels or their chief disciples will close this book disappointed. Unlike all the writers of Marxist economic textbooks, we have strictly abstained (with very few exceptions) from quoting the sacred texts or interpreting these quotations. As against that, we quote abundantly from the chief economists, economic historians, ethnologists, anthropologists, sociologists and psychologists of our times, in so far as they express opinions on phenomena relating to the economic activity, past, present, or future, of human societies. What we seek to show is that it is possible, on the basis of the scientific data of contemporary science, to reconstitute the whole economic system of Karl Marx. Furthermore, we seek to show that only Marx’s economic teaching makes possible this synthesis of the totality of human knowledge, and above all a synthesis of economic history and economic theory, just as it alone makes possible a harmonious integration of micro-economic and macro-economic analysis.
Has Mandel succeeded in this ambitious task? Before passing judgment, let me review the main line of his argument by contrasting the view of economic theory as it appears from a Marxian perspective with that of economics as we ordinarily learn it in the “neo-classical” version that is our standard fare in college.
The critical difference emerges at the very outset. “Economics,” writes Paul Samuelson in his famous text (7th ed., p. 5)
is the study of how men and society (sic) choose, with or without the use of money, to employ scarce productive resources, which could have alternative uses, to produce various commodities over time and distribute them for consumption, now and in the future, among various people and groups in society.
The impression is conveyed of a town meeting in which men and “society” deliberate how they shall make the best use of their limited capabilities. Perhaps this is the way things will some day be ordered under some other social system, but I find it a very strained description of the way things are ordered under ours. For the definition smothers the explicit recognition that “society” (and, indeed, “men”) are not timeless abstractions, but constitute in themselves the very first object for a critical and analytic “economic” scrutiny. We begin, in other words, by taking for granted the conditions under which, and the historical institutions by which, “choice” will be made—whereupon neo-classical economics proceeds to apply its formal techniques to such questions as why “society” has fluctuations in output, wide variations in individual incomes, etc.
Marxian analysis (as I shall paraphrase Mandel’s version of it) starts elsewhere, in the anthropological and physical characteristics of primitive societies as we dimly perceive their outlines in prehistory, and then inquires, as the first problem of economics, into the social and material relationships of these elemental social systems. Did primitive man “choose” how to employ his productive resources among alternative uses? Not so far as we can read the anthropological record. In the unremitting struggle against famine that absorbed the overwhelming portion of human energies in the first million years of human existence, only those modes of social and technical organization that met the test of survival were maintained and passed along; those that did not brought extinction.
In this primeval state of mankind, “economics” is inseparable from sociology, technology, and culture in general. Only with the eventual appearance of a social surplus—a quantum of food production over and above that needed for survival—did there arise the possibility of an economic mechanism involving choice, in the sense of alternative dispositions of inputs and outputs. Thus the study of economics, in the Marxian view, coincides with and brings its initial inquiry to bear on the rise and disposition of a surplus of production over the essential requirements of consumption.
With the appearance of a surplus—an appearance probably traceable to the very gradual improvement of skills, material artifacts, and social organization—comes as well the appearance of a “class” division within the society. For the appearance of a material surplus, in nearly all social groups, is accompanied by an unequal appropriation of this surplus among the members of the community. Precisely how this economic stratification of society appears we do not know. Perhaps the capture of prisoners of war, or the armed subjugation of one part of the community by another, provides the original means by which the surplus goods (mainly food) produced by some men are claimed by others. Perhaps the initial uneven distribution follows an older stratification along religious or other lines. All that we do know, as Mandel writes, is that “something which is at first voluntary or intermittent later becomes obligatory and regular. By the application of force, that is to say, by the organization of the state, a social order is established which is founded on the surrender by the peasants of their surplus of foodstuffs to the new masters.”
But the division of early society into surplus-producing and surplus-appropriating groups still does not give us the lineaments of the commodity-producing society that is the “given” of neoclassical economics. That is, the seizure of a portion of a primitive tiller’s output by an armed lord, or the forced labor of a slave whose surplus output is taken by his owner, does not constitute a relationship of exchange. Even trade, as we know it, does not exist in primitive societies where exchanges, as Mandel stresses, begin with fearful contacts among groups, often consummated as “silent barter,” and only gradually develop into collective, tribal interchanges of more or less specialized products. From here it is still a long evolutionary process until we meet the widespread existence of individuals within communities, who will be able to live by specializing their labor, confident that the existence of commonly shared “values” will enable them to exchange what they have made for what they need.
What is this essential common denominator of values that enables exchange to become generalized among men? As a Marxist, Mandel argues that only one such universal calculus exists. This is the expenditure of labor-time, the indispensable, and (at an early stage of society) overwhelmingly most important, input. In the language of modern economics, labor time is by far the greatest opportunity cost of primitive production, and thus labor time becomes the “coin,” so to speak, by which primitive production is measured.
I will return later to the question of whether such a labor theory of value serves equally well as a basic measuring rod in more advanced stages of society. What is essential is to see that Marxian analysis plunges us directly into questions that are obscured from view in an economics that is no longer aware of a surplus transferred from one group to another, but only of the production of a mass of commodities from the “cooperation” of land, labor, and capital. Indeed, from the Marxian view, the main task of economic theory now becomes the elucidation of this very metamorphosis—that is, how a surplus-generating and surplus-seizing society gives way to a commodity-generating and commodity-sharing one.
In particular, Marxian analysis calls to our attention the tremendous period of innovation centered in the late Middle Ages when the mode of surplus-appropriation changes from one of more or less overt force to the much more covert dispositions of the market-place. For as monetary relationships come to be diffused throughout late feudalism (Marx’s famous “cash nexus”) and as commercial and proto-industrial structures emerge in the agricultural setting of life, a profound alteration takes place in the method of transferring the surplus from one group to another. Explicit acts of forcible seizure, such as the corvée performed by the serf for his feudal lord, now begin to disappear from sight. In their place appears a new institution of wage bargains between three equally “free” legal persons: the worker, the capitalist, and the landlord. In this new form of social interaction, laborers and proprietors meet with one another in the marketplace for an exchange of values, during which a portion of the product of society “naturally” gravitates into the hands of the owners of society’s resources.
How is this done? The answer is that land, and more especially capital, have taken on a new guise. Not only do they exist (as they always have and always will) as the physical resources or the stored efforts of the past, serving as such enormously to enhance the productive capability of effort expended in the present, but they now also appear as legal “personages,” claiming (in the name of their owners) their “rightful” share of the increment in productivity attributable to them.