Marxist economics

glevy at glevy at
Fri Oct 6 06:10:40 MDT 1995

Steve K. wrote:

> My comment is a simple one, which is to point out Elias Khalil's
> argument in The Journal of the History of Economic Thought, Vol. 16
> No. 2, "The implications for socialism of Marx's theory of the
> tendency of the rate of profit to fall". There Khalil argues that,
> if one accepts the tendency, then there is nothing in Marx's
> argument which makes this phenomenon specific to capitalism. It
> should, therefore, afflict socialism as much as it afflicts
> capitalism.

[With apologies to Jim Miller], I've resisted the tendency to discuss his
threads before [partly, because I've been very busy lately and partly
because he raises questions we have discussed at length before]. However,
Steve's challenge is just too good to resist. A few thoughts:

1) the concept of value in Marx is fundamentally an expression of capitalist
social relations and can not be simply transferred to socialism.

2) concepts such as capital as self-expanding value and the components and
changes in  the composition of capital [constant  capital; variable
capital] are likewise unique to capitalism.

3) who would argue that the formation of prices of production and the
general rate of profit are common to capitalism and socialism? Pah-leese.

4) [connected to the above], what did Marx call what you call the
"falling rate of profit"? [Answer: "the law of the tendency for the
general rate of profit to decline"]. For one to make the case that this
applies to socialism, one must also make the case that prices of
production and the general rate of profit are determined in the same way
under capitalism and socialism.

5) Throughout _Capital_, _TSV_, the _Grundrisse_, and elsewhere, Marx
repeatedly said that a common failing of political economy was the
tendency to take categories historically specific to capital and
transform them into natural and eternal characteristics. This is a major
philosophical failing of most economists in Marx's time and our own.


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