Three Books on Marxist Political Economy (Pt 15)

Reader Manuel Angeles commented: “In Cambridge (UK) in the 1970s, a whole slew of them rejected marginalist theory. Joan Robinson, in fact, frequently ridiculed it, in spite of Keynes´s chapter in the General Theory.”

Angeles refers to the so-called Cambridge Capital Controversy, which pitted economists from Cambridge, Mass., led by Paul Samuelson against Cambridge UK-based economists led by the Italian-British economist Piero Sraffa (1898-1983). Paul Samuelson (1915-2009), who was considered perhaps the leading (bourgeois) U.S. economist of his generation, defended marginalist theory. Samuelson combined marginalism with a watered-down Keynesianism that he called the “Grand Neoclassical Synthesis.”

Sraffa and his supporters clearly came out on top against the Samuelson-led marginalists. Sraffa’s attack on marginalism is contained in his short book “Production of Commodities by Means of Commodities,” where he exposed logical and mathematical paradoxes in marginalist theory.

But what value theory did Sraffa and his generally left Keynesian supporters propose in place of marginalism? Nothing, really, beyond that, given free competition, prices will tend toward levels where capitals of equal size earn equal profits in equal periods of time. The Sraffians also claimed that, with a given level of productivity of labor, wages and “interest rates”—by which is meant the rate of profit—will vary inversely.

Whatever he may have thought in private about the labor value schools of Ricardo and Marx—Sraffa was a great admirer and scholar of Ricardo and was well acquainted with Marxism having been a sympathizer of the Italian Communist Party in his youth—”neo-Ricardian” followers of Sraffa’s work have often used it against Marx’s labor value and surplus value theory. Once we accept the “neo-Ricardian” “price of production school” in place of Marxist value theory, we are forced to draw the conclusion that constant capital—machines and raw materials—as well as land produce value and surplus value.

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2 Responses to “Three Books on Marxist Political Economy (Pt 15)”

  1. Vicenç Meléndez Says:

    “Once we accept the “neo-Ricardian” “price of production school” in place of Marxist value theory, we are forced to draw the conclusion that constant capital—machines and raw materials—as well as land produce value and surplus value.”
    That is not in Sraffa.
    It is perhaps S. Keen who says that fixed capital (constant fixed capital) may have more use value than exchange value, ignoring that fixed capital is exchanged between capitalist and that, for Sraffa, fixed capital outliving its normal time may well be considered as a “rent”, in terms of KMarx.
    Production prices in Sraffa are feasible production prices, for instance, under capitalism; not prices that need knowing labour values.

  2. Hannu Komulainen Says:

    “Because the productivity of labor of the British workers was much higher due to the far greater use of modern—by the standards of the 1860s—machinery, an hour of labor performed by a worker in Britain produced far more use value. Therefore, on the world market an hour of British labor counted for more simple average labor—and thus value—than an hour of labor performed by the workers in Germany and Russia.” I am not sure I understand this.

    But if more items with the same use value are produced then the value of each item is reduced, not increased. Why would the British worker produce more value per hour than the German?

    Is it because the national value produced by the German was higher than the British? So the British capitalist could sell at a higher price than the value. And this higher price corresponded to a higher international value than the national British one. Is this why British labor “counts for more” than German, according to you?

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