The Economics of Karl Marx: Analysis and Application / Edition 1

The Economics of Karl Marx: Analysis and Application / Edition 1

by Samuel Hollander

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ISBN-10: 0521790786

ISBN-13: 9780521790789

Pub. Date: 04/07/2008

Publisher: Cambridge University Press

This book presents an account and technical assessment of Marx's economic analysis in Capital, with particular reference to the transformation and the surplus-value doctrine, the reproduction schemes, the falling real-wage and profit rates, and the trade cycle. The focus is on criticisms that Marx himself might have been expected to face in his day and age. In


This book presents an account and technical assessment of Marx's economic analysis in Capital, with particular reference to the transformation and the surplus-value doctrine, the reproduction schemes, the falling real-wage and profit rates, and the trade cycle. The focus is on criticisms that Marx himself might have been expected to face in his day and age. In addition, it offers a chronological study of the evolution of that analysis from the early 1840s through three "drafts": documents of the late 1840s, the Grundrisse of 1857-1858, and the Economic Manuscripts of 1861-1863. It also provides three studies in application, with reference to Marx's evolutionary orientation in his evaluation of the transition to communism and his rejection of egalitarianism under both capitalist and communist regimes; his evolving perspective on the role of the industrial entrepreneur; and his evolving appreciation of the prospects for welfare reform within capitalism. Throughout, Hollander emphasizes Marx's relation with orthodox canonical classicism.

About the Author:
Samuel Hollander is University Professor Emeritus at the University of Toronto, Canada, where he served on the faculty from 1963 to 1998, and is currently affiliated with the Department of Economics at Ben-Gurion University, Israel. An Officer of the Order of Canada and a Fellow of the Royal Society of Canada, Professor Hollander holds an honorary Doctorate of Laws from McMaster University, Ontario, Canada

Product Details

Cambridge University Press
Publication date:
Historical Perspectives on Modern Economics Series
Product dimensions:
5.98(w) x 8.98(h) x 1.38(d)

Table of Contents

Preface     xv
Introduction     1
Capital. Principle Features of the Marxian "Canon"
Value and Distribution     11
Introduction     11
On "Demand-Supply" Analysis     13
The Transformation of Values into Prices: Formal Analysis     17
The Transformation and the Allocation Mechanism     23
Competition Constrained: Land Scarcity and Firm Size     28
On "Market Value" and Competition     31
The Inverse Wage-Profit Relation and Profit-Rate Equalization     38
Materials, the Luxury-Goods Sector, and the General Profit Rate     40
The Rate of Surplus Value as Endogenous Variable     42
More on Final Demand and Distribution     46
Marx's Strategy     48
Concluding Comment: The Baumol-Samuelson Exchange     53
Elements of Growth Theory     55
Introduction     55
Setting the Stage: Stationary Reproduction as Circular-Flow Process     55
Capital Accumulation     59
Determinants of the Rate of Accumulation     61
The "Simple Reproduction" Scheme     68
The "Extended Reproduction" Scheme     75
Concluding Comment     83
Economic Growth and the Falling Real-WageTrend     85
Introduction     85
The Falling Wage Trend     88
The Subsistence Wage and the Value of Labor Power     90
The Falling Wage Trend and Population Growth     94
The Industrial Reserve Army and Cyclical Wage Fluctuations     100
Inter-Sectoral Labor Movements     102
The Participation Rate     104
Concluding Comments: Objections to Malthus     106
Economic Growth and the Falling Rate of Profit     110
Introduction     110
The Basic Analysis     111
The Conditions for a Falling: Rate of Profit     114
Increasing Rate of Surplus Value and Cheapening of Constant Capital     118
The Limited Impact of a Rising Rate of Surplus Value     120
Implications of Differential Rates of Productivity Increase     123
Technical Progress and the Falling Profit Rate: An Overview     127
On Secular Underconsumption     129
Concluding Comments: On the Significance of the Falling Profit Rate     132
The Cyclical Dimension     134
Introduction     134
The Cyclical Chronology     135
Trend and Cycle: Causal Mechanisms     139
The Raw Material Constraint and Upper Turning Point     143
The Labor Constraint and Upper Turning Point     145
The Monetary Dimension     150
Inter- and Intra-Departmental Imbalance     157
A Note on the "Echo Effect"     159
Concluding Remarks     160
Origins: Marx in the 1840s
Marx's Economics 1843-1845     165
Introduction     165
Price Theory     166
Wage-Rate and Profit-Rate Trends     171
The Private Property System: Ricardo as bete noire     176
On Aggregate Demand and "Overproduction"     182
In Partial Defence of Proudhon     184
Objections to Friedrich List     188
Summary and Conclusion     190
A "First Draft" of Capital 1847-1849     194
Introduction     194
Allocation, Cost Price, and the Labor Theory     195
Differential Rent     204
Labor as Commodity     206
On "Labor Power" and the Source of Surplus Value     207
The Inverse Wage-Profit Relation     212
The Falling Real-Wage Trend     214
More on the Real-Wage Trend: Increasing Organic Composition, Demographic Patterns, and the Reserve Army     218
Profit-Rate Determination: "Competition of Capitals"      223
Labor and Free Trade: On Marx's Ricardian bona fides     224
Summary and Conclusion     227
A "Second Draft" of Capital: The Grundrisse 1857-1858
1857-1858 I: Surplus Value     235
Introduction     235
The Basic Doctrine     236
Surplus Value and the Transition to Growth     244
Elements of a Growth Model: Productivity Increase, Population Growth and the Reserve of Unemployed     246
The Falling Rate of Profit     252
The "Transformation"     254
A Marxian "Reply" to Bohm-Bawerk     256
Surplus Value: Matters of Timing and Indebtedness     258
On Ricardo and Surplus Value: An Excursus     260
Summary and Conclusion     265
1857-1858 II: Value "Realization"     268
Introduction     268
Capital Turnover: A Circular-Flow Process     268
Obstacles to Value Realization     273
On the Law of Markets and Overproduction Literature     280
On Working-Class Consumption     285
Summary and Conclusion     289
A "Third Draft" of Capital: The Economic Manuscripts 1861-1863
1861-1863 I: Surplus Value - Profit, Rent, and Interest     293
Introduction     293
Profit-Rate Equalization and the Transformation     293
The Transformation Aborted: Absolute Rent and the Priority of the Industrial Sector     297
The Falling Rate of Profit and Its Significance     306
Materials, the Luxury Sector, and the General Profit Rate     311
The Rate of Interest     312
Commercial Capital and the Surplus-Value Doctrine     318
Summary and Conclusion     324
1861-1863 II: Sectoral Analysis, Accumulation, and Stability     326
Introduction     326
Sectoral Analysis and the Constant Capital "Riddle"     326
Conditions for "Continuous" Accumulation     334
Aggregate Demand Constraints     338
The Secular-Cyclical Nexus     341
Sources of Cyclical Instability     344
The Recovery Process: Corrective Mechanisms     347
On the "Overproduction" Literature     349
Summary and Conclusion     351
1861-1863 III: The Labor Market     353
Introduction     353
The "Wage-Fund" Doctrine Rejected: Synchronized Activity vs. Advances     353
Labor Demand and Technical Change     360
Labor Supply: Population Growth and the "Reserve Army"     368
The Mechanics of Population Growth and the Falling Wage Trend     375
Summary and Conclusion     380
Topics in Application
Economic Organization and the Equality Issue     385
Introduction     385
Objections to Egalitarian Reform     386
The Allocative Role of the Free Market vs. Central Control     396
Some Unexpected Parallels     401
Summary and Conclusion: The Evolutionary Dimension     406
Is There a Marxian "Entrepreneur"? On the Functions of the Industrial Capitalist     409
Introduction     409
Preliminaries: Industrial Organization     411
The Supervisory and Allocative Function     414
Science and the Sources of New Technology     419
Innovatory Investment     425
The Category of "Minor" Improvement     428
On Measurable Risk and Insurance     429
On "Profit of Enterprise" in Capital 3     430
On Cooperation     435
On Joint-Stock Organization and Limited Liability     435
Conclusion: The Industrial Capitalist and Uncertainty Revisited     438
Principles of Social Reform     444
Introduction     444
Early Statements     444
Marx's "Revisionism": The 1860s and 1870s      449
Summary and Conclusion     461
Conclusion: A Recapitulation and Overview     463
The Theory of Surplus Value     463
Marx and the Classical Canon: The Theory of Value     471
Marx and the Classical Canon: The Trend Path of the Factor Returns     477
Marx as "Revisionist"     479
Marx and the Moderns     483
Epilogue: On Engels and the "Closure" of Marx's System     488
Appendices     493
Bibliography     501
Index     519

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