Robert Paul Wolff:
Eventually, it became possible for the shallow and vulgar technicians of the neoclassical synthesis to dismiss Marx entirely as an economist, trivialising him, in Paul Samuelson’s famous jibe, as a “minor post-Ricardian” and an “autodidact.”
Anybody think that Robert Paul Wolff actually read Paul Samuelson's AEA Presidential Address, and set out to fairly summarize its view of Marx to his readers? Anybody? Anybody? Bueller?
Karl Marx: From the viewpoint of pure economic theory, Karl Marx can be regarded as a minor post-Ricardian. Unknowingly I once delighted a southern university audience: my description of Marx as a not uninteresting precursor (in Volume 2 of Capital) of Leontief's input-output analysis of circular interdependence apparently had infuriated the local village Marxist. Also, a case can be made out that Marx independently developed certain vague apprehensions of under-consumptionist arguments like those of the General Theory; but on my report card no one earns too high a grade for such a performance, since almost everyone who is born into this world alive experiences at some time vague intimations that there is a hole somewhere in the circular flow of purchasing power and production. This seems to come on the same chromosome as the gene that makes people believe in Say's Law; and Marx's bitter criticisms of Rodbertus for being an underconsumptionist shows us that he is no exception.
As long as I am being big about admitting small merits in Marx, I might mention a couple of technical suggestions he made about business cycles that are not without some interest: Marx did formulate a vague notion of 10-year replacement cycles in textile equipment as the determinant of cyclical periodicity--which is an anticipation of various modern "echo" theories. He also somewhere mentioned the possibility of some kind of harmonic analysis of economic cycles by mathematics, which with much charity can be construed as pointing toward modern periodogram analysis and Yule-Frisch stochastic dynamics.
A much more important insight involved the tying up of technological change and capital accumulation with business cycles, which pointed ahead to the work of Tugan-Baranowsky (himself a Marxian), Spiethoff, Schumpeter, Robertson, Cassel, Wicksell, and Hansen. What can be gold in the field of fluctuations can be dirt in the context of pure economic theory. Marx claimed in Volume 1 that there was some interesting economics involved in a labor theory of value, and some believe his greatest fame in pure economics lies in his attempted analysis of "surplus value." Although he promised to clear up the contradiction between "price" and "value" in later volumes, neither he nor Engels ever made good this claim. On this topic the good-humored and fair criticisms of Wicksteed and Bdhm-Bawerk have never been successfully rebutted: the contradictions and muddles in Marx's mind must not be confused with the contradictions and muddles in the real world.
Marx, like any man of keen intellect, liked a good problem; but he did not labor over a labor theory of value in order to give us moderns scope to use matrix theory on the "transformation" problem. He wanted to have a theory of exploitation, and a basis for his prediction that capitalism would in some sense impoverish the workers and pave the way for revolution into a new stage of society. As the optimism of the American economist Henry Carey shows, a labor theory of value when combined with technological change is, on all but the most extreme assumptions, going to lead to a great increase in real wages and standards of living. So the element of exploitation had to be worked hard.
Here Marx might have emphasized the monopoly elements of distribution: how wicked capitalists, possessed of the non-labor tools that are essential to high production, allegedly gang up on the workers and make them work for a minimum. Or, were it not for his amazing hatred toward Malthus and his theory of population, Marx might have kept wages dismal by virtue of biological conditions of labor supply. The monopoly explanation he did not use, perhaps because he wanted to let capitalism choose its own weapons and assume ruthless competition, and still be able to show it up. Marx tried to demonstrate the same dramatic minimum character of real wages by means of his concept of the "reserve army of the unemployed."
Here is the real Achilles' heel of the Marxian theory of distribution and its implied prophecies of immiserization of the working classes. Under perfect competition, technical change will raise real wages unless the changes are so labor-saving as to raise the rate of maintainable profit immensely; Joan Robinson and others have pointed out how contradictory is Marx's notion that both profit rates and real wages can fall once Marx jettisons Ricardo's emphasis on the scarcity of land and the law of diminishing returns.
Marx simply has no statical theory of the reserve army. If an appeal is made to a vague dynamic theory of technological displacement or recruitment from the country, close analysis will suggest that Marx (like Mill) was a very bad econometrician of his times, not realizing how much real wages in Western Europe had been raised by new techniques and equipment; and he was a bad theorist because his kind of model would almost certainly lead to shifts in schedules that would raise labor's wages tremendously, in a way more consistent with the 1848 Communist Manifesto's paeans of praise for the capitalistic system than with his elaborated writings.
In brief, technical change was gold in giving Marx cyclical insights, and dirt in giving him secular insights or an understanding of evolving equilibrium states. I should warn you that this is my opinion. and that I have always been surprised that I should be a virtual monopolist with respect to this vital analysis.
So far I have been talking about Marx as an economist. And I have been doing my best, subject to truth, to find some merit in him. (You may recall Emerson's neighbor in Concord: when he died the minister tried to find something to say at the funeral eulogy and ended up with, "Well, he was good at laying fires.") Even this represents a resurrection of Marx's reputation. Keynes, for example, was much more typical of our professional attitudes toward Marxism when he dismissed it all as "turbid" nonsense. (In view of the tendency of the radical right--for whom all Chinese look alike--to equate Keynesianism with Marxism, this ironical fact is worth nothing; and also its converse, since there is nothing communists deplore more than the notion that capitalism can be kept breathing healthily by the Keynesian palliatives of fiscal and monetary policy.)
Technical economics has little to do with Karl Marx's important role in the history of human thought. It is true that he and his followers felt that their brand of socialism differed from the sentimental brands of the past in that Marxist socialism was scientifically based and, therefore, had about it an inevitability and a special correctness. I need not labor the point before this group that the "science" involved was not that body of information about commercial and productive activity and those methods of analyzing the behavior relations which we would call economics. Political economy in our sense of the word was the mere cap of Karl Marx's iceberg. Marx's bold economic or materialistic theory of history, his political theories of the class struggle, his transmutations of Hegelian philosophy have an importance for the historian of "ideas" that far transcends his facade of economics.
Finally, one must never make the fatal mistake in the history of ideas of requiring of a notion that it be "true." For that discipline, the slogan must be: "The customer is always right." Its objects are what men have believed; and if truth has been left out, so much the worse for truth, except for the curiously-undifficult task of explaining why truth does not sell more successfully than anything else. Marx has certainly had more customers than any other one aspiring economist. A billion people think his ideas are important; and for the historian of thought that fact makes them important, in the same way that he would have to regard as diminished in importance the subject of Christianity, were it conceivable that it had been the religion merely of a transitory small group who once occupied the present country of Jordan or the state of New Mexico.
I find it ironic that everything RPW wrote about Marx's economics was anticipatorily refuted by Samuelson in the sentence:
he did not labor over a labor theory of value in order to give us moderns scope to use matrix theory on the "transformation" problem.