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A History of Marxian Economic Thought, Volume I: 1883-1929

A History of Marxian Economic Thought, Volume I: 1883-1929

by Michael Charles Howard, J. E. King

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The first volume of this critical history covers the social, political, and theoretical forces behind the development of Marxian economics from Marx's death in 1883 until 1929, the year marking the onset of Stalin's "revolution from above," which subsequently transformed the Soviet Union into a modern superpower. During these years, Marxists in both Russia and


The first volume of this critical history covers the social, political, and theoretical forces behind the development of Marxian economics from Marx's death in 1883 until 1929, the year marking the onset of Stalin's "revolution from above," which subsequently transformed the Soviet Union into a modern superpower. During these years, Marxists in both Russia and Germany found their economic ideas inextricably linked with practical political problems, and treated theory as a guide to action. This book systematically examines the important theoretical literature of the period, including insightful works by political functionaries outside academia—journalists, party organizers, underground activists, and teachers in the labor movement—presented here as the primary forgers of Marxian economic thought.

Beginning with Engels's writings, this book analyzes the work of leading Marxist economists in the Second International, then concludes with a review of the intellectual movements within the Marxian political economy during the 1920s. A second volume treating the period from 1929 to the present will follow.

Originally published in 1989.

The Princeton Legacy Library uses the latest print-on-demand technology to again make available previously out-of-print books from the distinguished backlist of Princeton University Press. These editions preserve the original texts of these important books while presenting them in durable paperback and hardcover editions. The goal of the Princeton Legacy Library is to vastly increase access to the rich scholarly heritage found in the thousands of books published by Princeton University Press since its founding in 1905.

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A History of Marxian Economics

Volume I, 1883â"1929

By M. C. Howard, J. E. King


Copyright © 1989 M. C. Howard and J. E. King
All rights reserved.
ISBN: 978-0-691-04250-3


Friedrich Engels and the Marxian Legacy, 1883–95

I Marx's Intellectual Legacy

Karl Marx died on 13 March 1883 at the age of 64, leaving much of his intended political economy unwritten and an even greater proportion unpublished. Since the publication of volume I of Capital in 1867, he had worked only sporadically on the remaining volumes, devoting an increasing proportion of his time to his other intellectual interests (for a discussion of some of these, see Chapter 7 below). The manuscripts which were to form the basis of the second, third and fourth volumes were subjected-as he once put it, regarding a different work – to 'the gnawing criticism of the mice'. In view of the central political importance that he assigned to the economic analysis of capitalism, Marx's lethargy was most unfortunate. Even allowing for the effects of ill health, it is difficult not to convict him of neglecting his responsibilities, both to the international socialist movement whose mentor he aspired to be, and more especially to his lifelong friend and collaborator Friedrich Engels, who was left to pick up the pieces.

At all events, only a small number of Marx's economic writings appeared in his own lifetime. They included the Communist Manifesto (with Engels as co-author). Not in any sense a treatise on economics, the Manifesto did encapsulate the Marxian vision of the capitalist mode of production. It was by far the most widely-disseminated of Marx's works, being reprinted in nine editions in six languages in the period 1871-3 alone. Marx's Critique of Political Economy had been published in 1859, but it was almost completely ignored at the time and soon went out of print. Also unavailable at the time of Marx's death was the Poverty of Philosophy, which had been published in French only-in 1847. Volume I of Capital, first published in 1867, went into a second German edition five years later, and was translated into Russian in 1872 and French between 1872 and 1875. Somewhat to Marx's suprise interest in Capital was especially strong in Russia, where the growing populist movement was developing a political economy which drew heavily upon Marx (see Chapter 7 below). The populists saw Capital, however, as a manual on the dangers of capitalist industrialisation, and thus as setting out a path to be avoided. (The Russian censor's complacent belief was that Capital would prove too obscure to be dangerous.)

Together with the Manifesto and Engels's influential Anti-Dühring, which offered (in 1878) an overview of the materialist conception of history in addition to a summary of the theory of value and surplus value, volume I of Capital was thus the principal source on Marx's political economy before 1883. As late as 1907–9, for example, long after the appearance of the second and third volumes, volume I was the main text for Otto Bauer's lectures at the Arbeiter Schule of the Austrian Socialist Party in Vienna. In the wider working-class movement it was however almost certainly read less often than the compendia provided by Deville in France and (somewhat later) by Aveling in England, or-most popular of all – Kautsky's precis in Germany. In 1883 very little else by Marx was available. Serious students had no access to his early writings or his correspondence; volumes II and III of Capital were still in manuscript form, along with the fourth volume on the history of economic doctrines (better known as Theories of Surplus Value); and few could even have suspected the existence of the important 'rough draft' of Capital which was eventually published as the Grundrisse and which provided a link between the themes of the 'young' and the "mature" Marx. Almost none of the available material was in English. Even the Manifesto. translated in 1850 for Julian Harney's Red Republican, was long out of print, and Marx was best known in Britain for his broadsides against Palmerston's foreign policy and his involvement with the International Working-men's Association and the Paris Commune. Knowledge of his political economy was acquired at one remove, via the German socialist movement or the critical writings of Continental and US academics. Not surprisingly, the subsequent development of Marx's political economy was to be initially a predominantly German endeavour, or one like that of Plekhanov's Marxism (see Chapter 8 below) which was inspired by the German Marxists.

Readers of the Communist Manifesto would have been impressed first of all by its emphasis on the revolutionary nature of the bourgeoisie, which transforms the entire world in an endless quest for profit but simultaneously produces its own grave-diggers in the form of the proletariat. Several crucial economic themes emerge. Bourgeois society is increasingly polarised, with the destruction of pre-capitalist forms of production and the conversion of peasant and artisan producers either into capitalists or (for the great majority) into propertyless wage-labourers. The need for a constantly expanding market generates both the extensive spread of capitalist relations on the world market and their intensive penetration through the commercialisation of all aspects of human life. But capitalism is increasingly unstable. Economic crises provide evidence of 'the revolt of modern productive forces against the property relations that are the conditions for the existence of the bourgeoisie and of its rule'. Crises give rise to 'an epidemic of over-production', but the means by which the bourgeoisie attempts to overcome them are contradictory. New markets are created and old markets exploited more thoroughly, thereby 'paving the way for more extensive and more destructive crises'. This intensifies the misery of the proletariat. Skills are degraded and the worker's autonomy destroyed, so that he or she becomes 'an appendage of the machine'. The price of labour is set by its costs of production: 'in proportion, therefore, as the repulsiveness of the work increases, the wage decreases ... The average price of wage-labour is the minimum wage, i.e. that quantum of the means of subsistence, which is absolutely requisite to keep the labourer in bare existence as a labourer.' Increasing polarisation of society, relentless quest for new markets, ever more intense economic crises, immiseration of the working class: these, according to the Manifesto, are the economic foundations of proletarian revolution.

Volume I of Capital refined and extended the central economic message of the Manifesto. It begins with a long, involved and notoriously difficult analysis of commodity production, before setting out the theory of surplus value as the form taken in capitalist society by the unpaid labour of the producers. Marx discusses the labour process; the length of the working day; the division of labour within the factory; and the impact of mechanisation. On the question of wage determination Marx revised the position taken in the Manifesto, replacing the early emphasis on a physical minimum with the more dialectical view, first expressed in the Grundrisse, according to which capitalism continually increases workers' needs and thereby also raises their customary consumption standards. In addition to the basic physiological element of the wage, there is a variable component which depends on the degree of development of human needs. Wages are thus influenced by two contradictory tendencies: mechanisation, which reduces the demand for labour power and forces wages down; and the expansion of needs, which works in the opposite direction. 'Immiseration' is now a relative rather than an absolute phenomenon. Marx then pointed to a persistent tendency for the constant portion of capital to grow more rapidly than the variable component. This 'absolute general law of capital accumulation' leads to the formation of an industrial reserve army of the unemployed and to the increasing concentration and centralisation of capital. Volume I concludes – a little incongruously – with an account of the 'primitive' (that is, original) accumulation of capital before the establishment of the capitalist mode of production, and with an illustration drawn from the British colonies of the fundamental importance of wage labour in the production of surplus value.

As the only major economic work which Marx saw through to publication, the significance of volume I of Capital is difficult to exaggerate. But it was only part of a much more ambitious project, and the omissions are no less telling than what it does contain. According to his own plan it emphasises production to the neglect of both the circulation of commodities and the relations between production and circulation. Thus there are only two brief references to the divergence of labour values and equilibrium prices, and no mention of the formation of a general rate of profit, still less any analysis of its long-run tendency to decline. Marx's discussion of capital accumulation is vigorous but informal, without either the rigour or the intricacy of his treatment, in volume II, of simple and expanded reproduction. His views on economic crises are sketchy and one-sided. Although there are occasional attacks on Say's Law and a powerful analysis of the relations between mechanisation, unemployment, real wages and the rate of accumulation, they do not amount to a coherent theory of cyclical fluctuations or a systematic account of the likelihood of economic breakdown. Volume I is full of references to the impending transcendence of capitalism and its replacement by a socialist society through a process of proletarian revolution. But the economic basis for Marx's theory of capitalist history is only partially developed, and a student of Marxian political economy in 1883 would necessarily have had a different view of its principal tenets from that of the modern reader.

II Engels as Editor and Theoretician

For the twelve years after Marx's death Engels was the unchallenged intellectual leader of European social democracy, the principal interpreter of Marx's writings, and the final court of appeal in all theoretical disputes. He was responsible not merely for the publication of Marx's manuscripts, but also for the colossal editorial labours which this required. Everything was in Marx's execrable handwriting, and nothing was in finished form ready for the press. At the same time Marxist journals pestered him for articles, party leaders sought his views on their manifestoes, socialist correspondents and fraternal visitors made increasing demands on his time. No longer second fiddle to Marx, Engels became (in Otto Henderson's words) 'the leader of the orchestra'. On questions of political economy he was less than adequately equipped for the task. As early as the mid-1840s Engels had agreed on an informal division of intellectual labour with Marx, focusing his attention upon political, military and scientific affairs while Marx concentrated on economic theory. By 1883 Engels must have been somewhat out of touch with the subject. As will shortly be seen, he appears to have accepted his new responsibilities with resignation rather than any great enthusiasm. Together with Marx's own dilatoriness, Engels's lack of capacity as a political economist meant that Marxian economics advanced only very slowly in the final third of the nineteenth century.

Fortunately he was at least still in excellent physical and mental shape. When the young Eduard Bernstein visited Engels in London in 1880 he was deeply impressed by his host:

In those days Engels had just passed his sixtieth year, and amazed us by his great bodily and mental vigour. This tall, slender man hastened through the long London streets at a quicker pace than even the youngest of us. To keep step with him upon our walks was no easy matter ... Although Marx was only two years older than Engels, he gave the impression of being a much older man.

Not until shortly before his death did Engels's health begin seriously to fail (though his eyesight proved much more vulnerable). The years from 1883 to 1895 were in many ways his most productive. He wrote one major book (The Origin of the Family, Private Property and the State); a shorter philosophical treatise (Ludwig Feuerbach and the End of Classical German Philosophy); no fewer than twenty-two prefaces to writings by Marx, including five to the Communist Manifesto alone; and a profusion of newspaper articles and letters.

Marx had left no written testament, but simply told his youngest daughter Eleanor that she and Engels were to be his literary executors. However, Eleanor Marx seems to have possessed neither the patience nor the necessary self-confidence to involve herself deeply in editing her father's papers, and so the burden fell almost exclusively on Engels's shoulders. He saw as his principal task the rapid publication of the remaining volumes of Capital, rather than a definitive edition of Marx's writings in strict chronological order. Though tempted by the latter project Engels was forced to rejected it as impracticable, partly because of the sheer enormity of the work entailed and partly because the German censors would not have permitted its appearance. The completion of Marx's 'Economics' must also have seemed to be of more immediate political relevance. At first Capital did monopolise Engels's time and energies. He worked on it for eight or ten hours a day for several months in 1884, and volume II was published early in the following year.

Subtitled 'The Process of Circulation of Capital', the second volume of Capital began by showing how capital revolved between production and exchange in repeated circuits which were intertwined with each other. Marx elaborated on his criticisms (in volume I) of Say's Law in demonstrating how the system became vulnerable to crises. After a detailed account of the distinction between productive and unproductive labour, the book concludes with a long discussion of simple reproduction and a relatively brief and incomplete treatment of expanded reproduction. Although these two-sector models of economic growth represent a remarkable intellectual achievement, and carry with them important implications for the theory of crises. volume II as a whole lacked both the broad historical sweep and the theoretical significance of its predecessor. Engels had always known that this would be the case: "Volume II will cause great disappointment', he told Sorge in 1885, 'because it is so purely scientific and does not contain much agitational material. On the other hand [volume] III will come like a thunderclap, because here the whole of capitalist production is dealt with in its interconnectedness and all of the official bourgeois economic science will be thrown overboard.'

Volume III was delayed for almost a decade, under circumstances to which we will allude later. Meanwhile Engels prepared a fourth German edition of volume I, which came out in 1890, and edited several of Marx's lesser works. Those of direct economic relevance included the pamphlet Wage Labour and Capital (which was published in 1884 and thus preceded volume II), and the first German translation of The Poverty of Philosophy (in 1885). A Russian edition of volume II of Capital organised by the populist N. F. Danielson (who wrote under the pseudonym 'Nikolai-on') appeared in 1886, but this was the only translation before the end of the century. At last significant sections of Marx's economic writings became available to English readers. Engels supervised the translation of volume I which Edward Aveling and Samuel Moore published in 1887 (extracts having appeared in the socialist journal Today intermittently since 1883), and the following year saw the second English edition of the Communist Manifesto.


Excerpted from A History of Marxian Economics by M. C. Howard, J. E. King. Copyright © 1989 M. C. Howard and J. E. King. Excerpted by permission of PRINCETON UNIVERSITY PRESS.
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