From International Socialism, No.33, Summer 1968, pp.38-39.
Transcribed & marked up by Einde O’Callaghan for ETOL.
Marx and Modern Economics
Ed. David Horowitz
MacGibbon & Kee, 50s
David Horowitz performs a valuable service by bringing together a whole literature which has grown up in the past thirty years around the attempted ‘synthesis’ of Marxian theory with Keynesian and other contemporary economic schools. In this his collection of essays serves to draw attention to what is in fact a relatively integrated school of economic thought. While the collection includes articles by other economists, such as Leontief, it is dominated by those associated with the ‘neo-Marxian’ school of Baran, Sweezy, Lange, Dobbs and others. This school is indeed defined, as Horowitz implies, by the attempt to use ‘academic methods to solve the problems posed by Marx’ and therefore is at a notable disadvantage in explaining the relation between contemporary bourgeois economic thought and revolutionary Marxism of which the essence is, as Lukács pointed out, precisely the method. For the working class, and therefore for its Marxian theory, Karl Korsch remarked, political economy is enemy territory. While capitalist society transforms the worker into a commodity and his labour-products into means of his subjugation, political economy reflects this actual transformation in a mystified form. It converts the workers’ life and labour and the real processes of capitalist production into abstract manipulable concepts which serve as means to further the actual manipulation of the working class. Marxian theory, in attempting to expose the class nature of these ‘economic’ categories and to determine the inherent limitations and contradictions of capitalist production, serves as the revolutionary critique of capitalist society and of its scientific-ideology, political economy.
The basis of Marx’s critique was his ‘labour theory of value,’ which the Neo-Marxists reject, and his theory of surplus-value. Marx’s labour theory of value is not at all, as Oskar Lange, contends, a ‘static theory of general economic equilibrium,’ but is rather a dynamic theory of ‘anarchical capital development.’ Through his labour theory of value, Marx demonstrated the necessary contradictions and limits arising from capitalist production which seeks to expand the value of capital and the general expropriation of surplus-labour by means of continually increasing the productivity of labour; which seeks to increase the subordination of the working class to the social power of capital, accumulated labour, by developing the workers’ power to free themselves from all such subordination to man and nature. Marx could thus show that, so long as labour was controlled by capital, the growing productive powers of man would manifest themselves, not as bourgeois economists believed in growing freedom and abundance, but instead in growing enslavement and social ‘anarchy.’
It is not at all surprising that there should be certain similarities between Marx’s work and certain analyses of modern economic theory. The tendencies and contradictions which Marx discerned over a hundred years ago, a declining rate of capital formation and growing war and ‘anarchy,’ the increasing concentration of capital, matured more fully in the period following the First World War continuing to this day. To the extent that academic economics attempts to deal with reality it must acknowledge and deal with a crisis-ridden capitalist world. But the formal similarity between parts of Marxian theory and parts of modern economic theory is entirely subordinate to their differences. While the Keynesian theory of ‘effective demand,’ for example, certainly raises problems of the discordance between capitalist demand and real social needs, it can hardly supply an integrated framework for understanding the underlying causes of the problems it attempts to explain. On the contrary, Keynes’ theory seeks to deal with the failure of the spontaneous market mechanism under capitalism through State interventions in order to bolster the declining mechanism. As such, it is incapable of analysing the basic contradictions of capitalist production and of the limits of State-intervention in the market economy. To take this a step further, the appeal of Keynesian and other modern academic theorists for the ‘neo-Marxians’ is precisely in its implied State-capitalist direction. They seek to criticise Keynes for not carrying the logic of his own analysis; from their point of view the failure of the capitalist economy is simply a question of the limits of the market mechanism and the ‘advantages’ of a coordinated statified economy. Without treating of the class limitations of capitalist society they seek to alter its structure in order to avoid the stagnation of modern capitalism and revivify the capitalist accumulation mechanism in a new form. The illusion that State-capitalism eliminates the contradictions of capitalist development has already been adequately ‘criticised’ by the Hungarian working class.
Last updated on 19.6.2008