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A History of Marxian Economics, Volume II

A History of Marxian Economics, Volume II: 1929-1990

M. C. Howard
J. E. King
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    A History of Marxian Economics, Volume II
    Book Description:

    This second volume completes a critical history of the social, political, and theoretical forces behind Marxian economics--the only work in English to offer such comprehensive treatment. Beginning with Marxian analyses of the Great Depression and Stalinism, it explores the theories developed to explain the "long boom" in Western capitalism after the Second World War. Later chapters deal with post-Leninist theories of imperialism and continuing controversies in value theory and the theory of exploitation. After outlining recent work on the "second slump," the integration of rational-choice theory into Marxism, and the political economy of socialism, the book concludes with a review and evaluation of Marxian theory over the whole period since Marx's death. Praise for the first volume: "Howard and King have done an excellent job.. One comes away with the impression of Marxian economics being a vibrant subject, relevant to the problems of these times and useful in practical matters."--Meghnad Desai, The Times Higher Education Supplement

    Originally published in 1992.

    ThePrinceton Legacy Libraryuses the latest print-on-demand technology to again make available previously out-of-print books from the distinguished backlist of Princeton University Press. These paperback editions preserve the original texts of these important books while presenting them in durable paperback 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.

    eISBN: 978-1-4008-6293-1
    Subjects: Economics

Table of Contents

  1. Acknowledgements
    (pp. ix-x)
    M. C. Howard and J. E. King
  2. Introduction
    (pp. xi-xvi)

    In the first volume of this book, published in 1989, we considered the history of Marxian economics from the death of Karl Marx in 1883 until 1929. This second volume brings the history up to the present day. It is in many ways a very different kind of story. The works of German and Russian Marxists dominated the first volume because they virtually monopolised intellectual discussion in Marxian economics prior to 1929. Beginning in the 1930s, however, the centre of gravity of theoretical analysis began to shift westwards, so that in the post-war era the heartlands of Marxian political economy...


    • 1 Marxian Economics and the Great Depression
      (pp. 3-23)

      The Great Depression was by far the most severe economic crisis in the history of capitalism. In the United States real GNP fell by 9.9 per cent in 1930, a further 7.7 per cent in 1931, and by 14.8 per cent in 1932. In the latter year industrial production in both Germany and the US was no less than 47 per cent below its 1929 level (for the other capitalist powers the collapse was less complete, but nevertheless severe).¹ Marxian economists asked two questions about this cataclysm. What did it mean for the future of the capitalist system and the...

    • 2 The Political Economy of Stalin
      (pp. 24-47)

      As the Great Depression engulfed the economies of Western capitalism, the rate of growth in the Soviet Union dramatically accelerated. Between 1928 and 1937 industrial production increased threefold, rising from less than one-third of national product to nearly one-half. It more than doubled again between 1937 and 1953, constituting close to 60 per cent of total output at the time of Stalin’s death. Only through large investments was this made possible. On average, over 20 per cent of output was devoted to accumulation in each year. The consumption of workers and peasants fell sharply; it was not until the early...

    • 3 The Soviet Mode of Production
      (pp. 48-72)

      Marx and Engels had warned that a ‘premature’ seizure of power would put a proletarian government in an untenable position. Unable to carry out its own programme, it would be forced as a condition of survival to become an instrument of the bourgeoisie and complete the historical tasks of capitalism.¹ Exactly what process of degeneration this would involve, however, was left unspecified, and their brief comments throw little light on subsequent Soviet developments. While it might be claimed that Stalinist accumulation accomplished the function which historical materialism had assigned to capitalism, the regime was clearly no instrument of the bourgeoisie...


    • 4 ‘Has Capitalism Changed?’
      (pp. 75-90)

      At the end of the Second World War many Marxian (and some non-Marxian) economists anticipated that a severe economic downturn, possibly in the same league as the Great Depression, would follow hard on the heels of the peace. When, a dozen years later, the expected crisis had still not materialised and the accumulation of capital was still proceeding rapidly and smoothly in the advanced capitalist countries, the Marxists were under pressure to reappraise their entire political economy. The most important analytical issues concerned the relationship between Marxism and Keynesian theory, and will be considered in the following Chapter. Here we...

    • 5 Marx and Keynes
      (pp. 91-108)

      The most important intellectual product of the Great Depression was Keynes’sGeneral Theory, which was published in 1936. It was not totally original, nor did it present an entirely consistent and self-contained theoretical system. Many of its ideas had been anticipated by earlier writers (including Keynes himself) and there were, as we shall see, important analytical lacunae. Even the policy prescriptions which theGeneral Theorycontained were less novel, and less controversial, than is often supposed. Moreover Keynes never broke decisively with orthodox theories, and incorporated a number of important neoclassical ideas into his own work.¹ All the same, the...

    • 6 Monopoly Capital
      (pp. 109-127)

      As we saw in Chapter 1, four broad types of crisis theory were used by Marxian economists to explain the Great Depression: disproportionality, overaccumulation, the falling rate of profit, and underconsumptionism. Of these, disproportionality soon lost all influence and overaccumulation fell out of favour for several decades. The other two theories were, however, invoked after 1945, both to account for the ‘long boom’ and to demonstrate that it could not last indefinitely. One school of post-war writers claimed that the tendency for the rate of profit to decline had been in abeyance because of the temporary strength of various counter-acting...

    • 7 The Falling Rate of Profit
      (pp. 128-148)

      There is a simple justification for beginning a chapter on modern problems with an account of earlier developments. Almost all the central issues in the theory of the falling rate of profit had been raised, and not a few also resolved, before 1945. Apparently unknown to most of the participants, many post-war controversies thus involved little more than a reworking of debates which had taken place in previous decades.¹ Two central questions can be detected in the early literature, both with a bearing on recent contentions. First, is the theory logically valid, yielding a determinate prediction concerning the long-run tendency...

    • 8 The Permanent Arms Economy
      (pp. 149-164)

      Perhaps the most obvious (and certainly the most sinister) difference between the post-war and pre-war worlds was the level of military expenditure carried on by the victorious powers. Disarmament had not been complete even after the First World War, but there was no precedent in the peacetime history of capitalism for the scale of arms spending which was now being undertaken. In 1950 military expenditure accounted for 6.6 per cent of the United Kingdom’s GNP, for 5.5 per cent in France and 5.1 per cent in the United States; a decade later the figures were 6.5 per cent, 6.5 per...


    • 9 Capitalism and Underdevelopment
      (pp. 167-185)

      The analysis considered in Part II focused upon the functioning and transformation of advanced capitalism. Each theory sought to provide an explanation of the ‘long boom’, understand the contradictions which would ultimately undermine it, and thereby account for the passivity of the working classes in the West, as well as locating the basis for any future radicalisation. In all cases the economic structures of backward areas and their relationship to those of developed countries figured hardly at all. Only Baran and Sweezy thought them to be significant, and even in Monopoly Capital they were of secondary importance. The forces of...

    • 10 Unequal Exchange
      (pp. 186-204)

      With the solitary exception of Rosa Luxemburg, classical Marxian analyses of imperialism identified the export of capital as the fundamental mechanism by which metropolitan capitalism exploits the periphery (see Chapters 5-6, and 13 of volume I of this book). One of the consequences of the decline of the Leninist theory of imperialism after 1945, which was described in the previous chapter, has been an increasing interest in trade rather than capital flows as the principal instrument of international exploitation. What appeared to be a growing gap between developed and undeveloped countries, especially after the collapse of the Korean War boom...

    • 11 Critics of Underdevelopment
      (pp. 205-224)

      All theories of underdevelopment treat capitalism as functioning on a global scale in the manner of Marx’s account of merchant capital, where monopoly power and unequal exchange redistribute surplus between geographical areas. Frank and Wallerstein add a zero-sum description to this circulationist perspective. Not only do they maintain that advanced capitalism underdeveloped the periphery, but they also insist that the centre has developed only because of the exploitation of the periphery. Furthermore, for Frank and Wallerstein it is production for profit realised on the market which defines capitalism. Specific relations of production are not regarded as important. Capitalism includes various...


    • 12 Value Theory Before Sraffa
      (pp. 227-244)

      This part is devoted to the Marxian theories of value and exploitation. It tells, as simply as we have been able to tell, a very long and complicated story. Readers should be warned that the structure of this part of the book is somewhat unusual. It contains two chapters (12 and 14) which are broadly chronological in their discussion of the transformation of values into prices of production, and two on Srafian economics (13 and 15) which are largely analytical in nature and deal only incidentally with the evolution of ideas over time. This division of the subject-matter is admittedly...

    • 13 Sraffa and the Critique of Marxian Theory
      (pp. 245-264)

      Marxian economics was at a very low ebb in 1957, and no one sprang to the defence of Marx against Samuelson’s strictures. The political climate remained profoundly hostile, with the Cold War and vestigial McCarthyite pressures still very strong in the United States, and the communist parties of Western Europe fracturing in the wake of the Hungarian revolution and Khrushchev’s revelations concerning the Stalin era. There were at this time few professed Marxian economists of any academic standing – as we saw in Chapter 6 above, Paul Baran was the only full professor in the entire United States who...

    • 14 Marxian Value Theory After Sraffa
      (pp. 265-290)

      As we indicated in the previous chapter, the impact of Sraffa’s TheProduction of Commodities by Means of Commoditieswas by no means immediate. The initial effect was to generate an attack upon neoclassical theory, which resulted in the ‘Cambridge Controversies’ of the mid-1960s. Although this was relevant to the Marxian analysis of ‘vulgar economy’, it did not bear upon the logical coherence of Marxian political economy itself, and it was not until the 1970s that the direct implications for Marxian economics began to be appreciated. Meanwhile, the questions raised by Francis Seton and Paul Samuelson in the 1950s awaited...

    • 15 Marxian Political Economy and Surplus Economics
      (pp. 291-308)

      Sraffian economists¹ have remained essentially unmoved by all attempts to salvage Marx’s theory of value, and have continued to maintain that the critique outlined in Chapter 13 above holds true: the labour-value categories, however reformulated, are at best redundant and at worst contradictory or erroneous. At the same time Sraffians have claimed that their analysis of Marx is constructive, arguing that Sraffa and Marx both belong to a ‘surplus paradigm’ and so share the same perspective and methodology. Thus they argue that their critique of Marx is an ‘internal’ one, and that Marxian political economy has really been strengthened because...


    • 16 The ‘Second Slump’: Theories of Crisis after 1973
      (pp. 311-334)

      By the early 1970s there were clear signs that the long post-war boom was over. The quarter-century after 1945 had seen a ‘Golden Age’ of rapid economic growth throughout the advanced capitalist world and (for most countries) virtually continuous full employment, while real wages had grown steadily but not so rapidly as seriously to threaten the profitability of capital.¹ After 1973, however, accumulation slowed considerably. The GDP of four major European countries (the UK, France, West Germany and the Netherlands) plus Japan, which had grown at an annual rate of 5.6 per cent between 1950 and 1973, rose by an...

    • 17 Rational Choice Marxism
      (pp. 335-355)

      Rational choice Marxism originated as a distinct school of thought in the 1970s and grew rapidly during the 1980s. Many Marxists who took no part in its initiation have become ‘converts’, while those who continue to criticise it nevertheless tend to treat it respectfully. The overall approach exhibits three main characteristics. First, rational choice Marxists have shown a concern for rigour and clarity to a degree unusual in Marxian theory. This is why the school is sometimes referred to as ‘analytical Marxism’. Great attention has been paid to the exact meaning of concepts, the process of deduction by which conclusions...

    • 18 The Political Economy of Socialism
      (pp. 356-386)

      In the intellectual history of Marxism the political economy of socialism has been dwarfed by the attention given to the capitalist mode of production. Only episodically have the issues of post-capitalist economic organisation come to the forefront, and even then often in very concrete circumstances that limited the generality of any conclusions that might be drawn. Sections II and III below explain how this neglect is inherent in the original Marxian perspective, and the following sections indicate why the economics of socialism have been elevated to a more prominent position since the 1920s, and especially since the 1970s. The dramatic...

  8. Conclusion
    (pp. 387-396)

    In part I of the first volume of this book, we described the emergence of orthodox Marxism in the Germany of the 1890s and the defence of the Erfurt Programme, in which its principal tenets were embodied, against revisionist critics. The central pillars of this orthodoxy were threefold. First, capital was being concentrated into larger units and also becoming centralised, as ever more powerful monopolies and cartels replaced the relatively free competition of an earlier stage of capitalist development. This would lead inexorably to a rising rate of exploitation and to the relative (if not absolute) immiseration of a rapidly...