Andrew Kliman is a professor of economics at Pace University, and the author of Reclaiming Marx’s “Capital”: A Refutation of the Myth of Inconsistency (2007) and The Failure of Capitalist Production: Underlying Causes of the Great Recession (2011). In his political work, he works with Marxist-Humanist Initiative. I contacted Dr. Kliman over a dispute on my blog in which I accused him of having automatist views and adhering to a version of an immiseration thesis, after which I apologized to him for misrepresenting (misunderstanding) his views. Platypus Affiliated Society’s Seoul chapter is planning on hosting an event with Dr. Kliman in June, where I will pursue these questions further.
C. Derick Varn: Many of your recent articles and books have shown that when you adjust for total compensation, and not just wages and salaries, that the declining rate of profit view from Marx’s Das Kapital still applies despite the change of form in the economy in the neo-liberal period. Were you surprised by these results when you began your research?
Andrew Kliman: Well, there are actually two issues here, since it’s standard practice to subtract all compensation, not just wages and salaries, when computing profit and rates of profit. What surprised me––shocked me, actually––about the compensation vs. wages and salaries issue––was that the conventional line on the left about what’s happened to wages and salaries is utterly misleading. We’re told that wages and salaries in the U.S. have stagnated for decades and that the wage-and-salary share of national income has fallen markedly. Both things are technically correct, but they don’t mean what I––and most other people, I suspect––assumed they mean. Total compensation per hour of work, including the health and retirement benefits received from employers as well as wages and salaries, hasn’t stagnated. And when these benefits as well as benefits provided by the government (such as unemployment insurance, veterans’, and welfare benefits) are taken into account, working people’s share of national income has been constant for four decades and has risen significantly since 1960.
I discovered this last fact when a colleague sent me a graph published in Monthly Review that showed a big nosedive in the wage-and-salary share of income. I went to the government table the numbers came from. I was shocked to find that this table also gave figures for employer- and government-provided benefits, and that the authors of the graph had simply ignored them. It’s obvious that the table doesn’t use the term “wages and salaries” to mean compensation of employees or workers’ income, but that’s certainly the impression one gets from the Monthly Review graph and the text that discusses it.
I should also say that I’ve been surprised at the attempts to argue that employer- and government-provided benefits aren’t really part of working people’s income. In any case, it’s simply a fact that the decline in the “wage and salary” share of national income doesn’t mean that other people––recipients of profit, dividends, interest, and so forth––have been getting a bigger share. They haven’t been.
As I said, none of this has any bearing on why my conclusions about the trend in the rate of profit differ from what others on the left told us, namely that the rate of profit in the US. recovered almost completely after 1980 or 1982. But I was also surprised when I discovered why they came to this conclusion. I knew beforehand that what physicalist-Marxist economists (such as Dumenil and Levy, Husson, Laibman, Moseley, and Mohun) call “the rate of profit” isn’t a rate of profit in any normal sense; it’s not profit as a percentage of the money invested in production. But even their “rate of profit” didn’t recover almost completely. It recovered modestly and was basically trendless from the mid-1980s onward. I was surprised to discover that the “almost complete recovery” conclusion was based on cherry picking the data. They compared the trough, or low point, to a later peak. When you deal with something that fluctuates a lot, like the rate of profit, this isn’t a valid way of assessing its trend. You need to compare through to trough, midpoint to midpoint, peak to peak, or something like that.
In any case, when I computed the actual rate of profit––profit as a percentage of the money invested in production––I found that it never experienced a sustained recovery. If “profit” is defined broadly to include the portion paid out in interest, sales taxes, etc., U.S. corporations’ rate of profit continues to trend downward during the last few decades. I wasn’t surprised by this, because I didn’t know what to expect.
By itself, the non-recovery or continued downward trend in the rate of profit isn’t evidence that Marx’s law of the tendential fall in the rate of profit (LTFRP) applies, because there are other possible explanations as to why this occurred. But I performed a decomposition analysis that indicates that Marx’s law fits the facts. That didn’t surprise me, but I was surprised at how well it fits the facts. In other words, what surprised me is that other things that influence the rate of profit had so little effect. Very little of the fall in the rate of profit between 1947 and 2007 was due to a fall in the profit share of output or income. Almost none of it was due to changes in the rate at which money prices rose in relationship to commodities’ values as measured in terms of labor-time. Now, after you abstract from those two factors, control for them, the rate of profit becomes a relationship between growth of employment and the accumulation of capital. If the rate of profit still falls, as it did, it has to be the case, mathematically, that employment grew more slowly than capital was accumulated. Almost all of the fall in the rate of profit during the 60-year period is attributable to this. And it’s precisely how the LTFRP explains the tendency for the rate of profit to fall.
C.D.V.: What do you think drives some of the hostility to your economic work? Particularly the cases of URPE and the Left Forum’s rejection of your proposal on a topic that they had a panel on in 2007?
A.K.: If the Left Forum hadn’t moved to Pace University, where I teach, I’d undoubtedly still be excluded from it.
There are two main things that drive the hostility. Both have to do with the fact that my and my colleagues’ work has disproved the old allegations that Marx’s value theory––and his LTFRP, which flows out of the value theory––has been proven logically inconsistent. A lot of people want Marx’s work to be inconsistent and they feel very threatened by the disproofs.
First, many people on the left, including the Marxist left, not only reject the LTFRP; they despise it passionately. That’s because Marx’s law has revolutionary implications. It’s not fatalistic––Marx doesn’t predict that capitalism will collapse or decay inexorably because of falling profitability––but the LTFRP does suggest that economic crises are inevitable under capitalism, because they are not caused by things that can be eliminated while still keeping the system. In contrast, theories that trace crises to under-consumption, low productivity, the anarchy of the market, state intervention, and so on––all of these suggest that if you fix the specific problem that is making capitalism perform poorly, its crisis tendencies will be substantially lessened or eliminated. This is in fact the key divide on the left today.
Second, a large number of people have built their academic careers on the myth that the LTFRP or Marx’s value theory are logically inconsistent. Some have “proven” this or that inconsistency. Some have marketed their theoretical revisions of Marx’s theory as what’s needed in order to correct his inconsistencies. Some have done both. Now, they could have been honest. They could have said, “Here’s my alternative to Marx’s theory, which I happen to prefer.” But if there were an open and honest competition between Marx’s theory and any of these revisions––if they had to compete as alternatives to his theory, not as needed corrections of it––is there any doubt about which one would emerge victorious? And it’s been very appealing to many of these people to present themselves as Marx’s successors rather than as critics with competing views, methods, and theories. The myth of inconsistency lets them have their cake and eat it too: they can build their careers on their alternatives to Marx while also presenting themselves as his successors. They simply say that they’ve eliminated Marx’s inconsistencies without undermining his basic account of capitalism.
But let me stress that hostility is not the real issue here. After all, my colleagues and I are arguably as hostile to their work as they are to ours. But we don’t go around suppressing their work, or promulgating falsehoods about what they say that harm their professional reputations, or falsehoods about what they’ve done that threaten their ability to earn a living in academia. These are the other side’s methods, not ours. Ours are the opposite. We do everything possible to encourage engagement and debate. The record shows this very clearly.
So in order to understand their behavior, we can’t talk only about hostility. We have to talk about totalitarianism and authoritarianism, and we have to talk about evil.
C.D.V.: Do you think that many people operating under the rubric of “Marxism” are crypto-Keynesian and neo-Ricardian then? Given that neither of those intellectual traditions are as contested in the popular culture, why do you think one would still operate under the name of Marxism?
A.K.: Much of mainstream Marxian economics has certainly had a strong Keynesian flavor since 1942, when Paul Marlor Sweezy wrote The Theory of Capitalist Development. And since the late 1970s, most of it has been either explicitly Sraffian––you use the term “neo-Ricardian” for the same thing, but they regard it as a slur, so I won’t––or it has differed from Sraffianism in minimal ways, while embracing Sraffian concerns and Sraffian methodology, such as static equilibrium modeling and physicalism. (Physicalists attempt to account for changes in values, prices, and profits solely in terms of changes in physical input-output relations, in other words, technology and the distribution of physical product between classes.) All this is widely accepted; I don’t think anyone disputes the strong Sraffian and Keynesian (and Kaleckian) influences on mainstream Marxian economics. And although Sraffian and Keynesian models are wrongly attributed to Marx and translated into Marx’s terminology, no one really hides the Sraffian and Keynesian provenance of these models (so I wouldn’t say “crypto”).
Your second question is fascinating. Keynesianism and Sraffianism are certainly more academically respectable than Marxism, and they’re not a threat to official society. So, if you’re a careerist, and your intellectual work isn’t part of the struggle for a new human society, why make problems for yourself by calling your work Marxian and making it look like a continuation of Marx’s work? There are several reasons. I’ll mention three; there may be others as well.
One is that some people are emotionally attached to “the Marxist tradition.” I don’t think that term means anything, really, but it’s widely used. It seems to be about one’s identity.
A second reason has to do with the fact that the key functions that mainstream Marxian economics has fulfilled for the capitalist system, objectively, are to suppress Marx’s own critique of political economy, to thwart a return to and development of it, and in general to see to it that the opposition is a loyal opposition. And so, in the same way that companies don’t hire Wharton School MBAs to try to keep the workers in line and toiling for the benefit of the company–– they select their foremen from among the rank-and-file workers on the shop floor––it’s useful for the system to have what you call people who “operate under the name of Marxism,” rather than orthodox economists, do the work of keeping Marxian economics in line and ensuring that its output is academically respectable.
A third reason, not unrelated, is that being a Marxist economist has been a smart career choice in some circumstances. I didn’t understand this for the longest time. After all, if orthodox economics monopolizes almost all of the really good jobs and money, why not be where the action is? The answer is that whenever you have a monopolized industry like this, there’s little chance that you’ll succeed if you compete in the mainstream of the market. If you produce soap, there’s almost no chance that you can win away some of Proctor and Gamble’s share of the market if you produce similar soap. So you produce for the market niche that wants handmade soap with exotic ingredients and scents, and you distinguish yourself by producing the only soap that contains manioca, yucca, and kiwi. In the same way, few people have really successful careers as orthodox economists, so it’s often a smart move to find a niche like Marxian economics and distinguish yourself by producing a novel Marx-Kalecki-Sraffa-Minsky monetary macro model or something.
C.D.V.: On your note about totalitarianism and evil, why do you think these sorts of tactics are used by academics arguably close to each other in a theoretical framework? What is the pathology there?
A.K: Well, they use these tactics because they work. But why do they work? Because no one stops them from using these tactics. In the economics profession and in left politics, there are no institutions that enforce ethical behavior and punish those who act unethically. Indeed, neither economics nor the left even has a Code of Ethics. There are good reasons to be critical of bourgeois right, and of bourgeois justice as it’s actually practiced. But the law of the jungle that prevails in economics and the left is much worse.
As for the idea that we’re theoretically close to each other, I don’t really think that’s true. A couple of years ago, Robin Hahnel, a well-known radical physicalist economist, wrote:
The idea that capitalism contains internal contradictions which act as seeds for its own destruction is simply wrong and needs to be discarded once and for all. …Thanks to work begun by Nobuo Okishio, modern political economists now know better. [Contrary to what Marx hypothesized,] labor-saving, capital-using technical change does nothing, in-and-of itself, to depress the rate of profit in capitalism and thereby generate a crisis of capitalism.[1]
How theoretically close are Hahnel and I?
In any case, closeness often fails to deter evil behavior. Men beat their wives, and plantation owners in the South enslaved the women who nursed and raised their children. And as I noted earlier, the key objective social function that those who “operate under the name of Marxism” play is much like the social function of foremen or police. Foremen and police are often close to the people they boss or police. They frequently grew up in the same neighborhood, they went to the same schools, they’re from the same class, and their race and ethnicity is the same. I haven’t heard that black cops refrain from racial profiling.
C.D.V.: What would a leftist code of ethics look like exactly?
A.K.: I haven’t given much thought to the details, since there seems to be so little interest in adopting a code of ethics, much less adhering to one. But this isn’t rocket science, as they used to say. The rules we need to follow to treat each other decently have been evolved through thousands of years and are pretty well understood. The key idea is the one in the Christian Bible: “Do to others as you would have them do to you”––and don’t do to others as you would have them not do to you.”
Drawing on my personal experience with unethical behavior on the left, I think that the following components would have to be part of any decent code of ethics: don’t steal the organization’s money; don’t lie about what other people say; don’t substantively alter what people write (their articles, descriptions of their meetings and seminars, etc.) without prior consultation and permission; don’t suppress the dissemination and discussion of others’ ideas; establish procedures to ensure that proponents of different perspectives engage with one another––not just each saying their own thing, but responding to others’ points; establish formal procedures to adjudicate disputes, with disinterested third-parties having the final say; and don’t cooperate with those who violate these norms.
Formal procedures for a whole variety of things are tremendously important, because they help guard against double standards being employed. I work with Marxist-Humanist Initiative, a new organization whose members had been seriously burned in other organizations that called themselves Marxist-Humanist. In light of those experiences, they realized that future of Marxist-Humanism, including their own future work in helping to develop and promote the philosophy, required that the organization abide by a whole slew of formal procedures that help safeguard against unethical behavior. Its By-Laws, which are available at www.marxisthumanistinitiative.org/philosophyorganization/by-laws-of-marxist-humanist-initiative, are 5600 words long and include 80 paragraphs. I think they’re exemplary, though of course not all of them are applicable to other kinds of organizations.
What I conclude from this is that ethical behavior isn’t just a good thing. It has great practical value for the left. People who’ve been victims of unethical behavior tend to drop out and become disillusioned. But the power-hungry and those with ulterior motives tend to stay, and do to others exactly what’s been done to them. So you get this very negative dynamic, kind of like Gresham’s Law––“bad money drives out good.” It weakens the left, and it certainly doesn’t help anyone believe that an alternative to existing society could actually work.
The key, of course, is that a code of ethics be enforced, not just adopted. This could be done without violence and without state power. All kinds of associations do so. You just exclude from the association the groups and people who violate the code, and let the public know who meets the ethical standards and who doesn’t. This would work if, but only if, the public cares.
C.D.V.: So “revolutionizing radical economics” to make it look like neo-classical economics would be a way to defuse Marxist analysis while making yourself marketable. Interesting and plausible. So are there thinkers you see as being positive instead of negative examples in leftist economics right now?
A.K.: I don’t follow much of most kinds of economics that might be called leftist, so I really can’t comment on them. I’m not even sure that “leftist economics” is an identifiable entity.
Although I’m critical of Robin Hahnel, I think that his and Michael Albert’s Parecon, participatory economics, is a real step forward in thinking about what is needed in order to have a free society with a non-capitalist economy that can reproduce such relations, instead of collapsing or retrogressing into capitalism or something worse. I don’t think that Parecon actually achieves this, but it’s a step in the right direction. There’s been far too little recognition on the left that this is a crucial issue; almost everyone is fixated on political change, evidently because they think that once you have power, you decide what you want and then just implement it. But that’s not how economies work. Actions have feedback effects and unintended consequences, a problem which decide-and-implement thinking completely ignores.
The work of all of my colleagues who have helped develop the temporal single-system interpretation of Marx’s value theory (TSSI)––Guglielmo Carchedi, Alan Freeman, Nick Potts, and several others––has been very important. So has the work of Brendan Cooney. He’s not a professional economist, but a videoblogger who makes educational videos about Marx’s critique of political economy and has helped bring the TSSI to the attention of the broader public. This interpretation eliminates the apparent inconsistencies in Marx’s value theory. The reason why this is so important is that internally inconsistent arguments are always invalid; they must be corrected or rejected. So the elimination of the apparent inconsistencies allows those of us who want to return to Marx to do so in good conscience. We don’t have to follow the “corrections”––or the “syntheses” of Marx and Keynes, Marx and neoclassical economics, etc.––that have been proposed by this or that Marxist economist.
I think the development of the TSSI has also shown the importance of interpretation, especially the importance of getting right what someone said before critiquing it. It serves as a counterexample to the way in which academics generally, including academics on the left, do economics, which is dominated by fads and self-promotion and the unquestioned assumption that newer is better.
C.D.V.:What do you see as the weakness in Parecon?
A.K.: I think there are two main weaknesses. The first concerns remuneration in proportion to the amount of work you do. Albert and Hahnel think this is crucial, and I agree. So did Marx. In his “Critique of the Gotha Program,” he argued that remuneration according to the amount of work done would naturally flow out of the direct sociality of labor, and the elimination of value production and exchange, in the initial phase of what he called “communist society.” So if you can’t sustain remuneration in proportion to work, it’s a sign that labor is still indirectly social and that value relations persist. Also, if you have unequal remuneration for equal amounts of work, there’s a real danger that you’ll start to have accumulation of capital, wage-labor, and all the rest. In other words, there’s a real danger that the society will slide back into capitalism.
Now the problem is that, in Albert and Hahnel’s Parecon, remuneration isn’t really proportional to the amount of work done. In order to deal with incentive problems—people receiving equal remuneration but goofing off, doing their own thing, etc.—they establish output quotas for work teams. So remuneration is actually proportional to the amount of output that’s produced rather than the amount of work that’s done. So labor isn’t really directly social; if a work team produces only half of its quota during an 8-hour day, 4 hours of the labor it performed doesn’t count as labor. I think this could be the start of a slippery slope.
They also specify that the work has to be “socially useful,” and Albert at least construes this very broadly, such that a professor who gives all of her students A’s could be said not to have done “socially useful” work. What about a restaurant staff that prepares meals that the restaurant patrons happen not to like, or people who make movies that moviegoers happen not to like? It’s one thing to move the professor or the restaurant staff or the filmmakers into a different line of work. It’s another thing to make their labor only indirectly social (and thereby deprive them of the remuneration they need in order to live?) by retroactively deciding that the labor they already performed doesn’t count as social labor.
I think incentive problems are real and serious. They need to be solved. But I don’t think these are good ways to solve them. Whether there is a better way is an unsolved question.
The other main problem with Parecon is that Albert and Hahnel imagine that it could operate in a single country. This makes it attractive to people who want to try to create a new world within the existing world, and their related idea that participatory structures and institutions that already exist are steps down that road makes it attractive to people who are anxious to do something “positive” here and now or who want to follow David Graeber’s advice: “act as you were already free.” But I think the history of the USSR shows that you can’t have socialism in one country. What you get is state-capitalism, a state-run system that is still embedded in the global capitalist economy, and which is still locked into a competitive battle with capitals elsewhere in the world. And in order to compete efficiently––whether you’re competing for markets or competing for global supremacy––you have to produce capitalistically; that is, you have to minimize costs and maximize output. That’s the source of exploitation, unemployment, and all the rest.
For instance, in an effort to deal with the tremendous problem of global inequality while still adhering to the notion of Parecon in one country, Albert has suggested that a Parecon in a place like the U.S. could decide to pay more than it needs to for its imports from poor countries. But if this was done on a scale that had a real effect on global inequality, it would significantly increase the Parecon’s costs, making its products uncompetitive on the world market. It is likely that the loss of markets (as well as the higher costs) would ultimately make it so poor that it would be among the countries that need handouts.
But even if we set that suggestion aside, Parecon in one country wouldn’t function the way Albert and Hahnel would like it to, because it would have to be competitive, which means that it would have to minimize costs and maximize output. So it would have to speed up production, have unsafe working conditions, produce what will be profitable on the world market instead of producing for need, and declare that work isn’t “socially useful” as work if it doesn’t produce a sufficient amount of profitable output.
Marx hailed workers’ cooperatives as harbingers of the new society, but he was also acutely aware of this problem. So in volume 3 of Capital, he cautioned that, as long as they exist within capitalism, the cooperatives “naturally reproduce in all cases … all the defects of the existing system, and must reproduce them … the opposition between capital and labour is abolished here … only in the form that the workers in association become their own capitalist.” In other words, the workers end up exploiting themselves. Parecon in one country would be a system of participatory exploitation, Parexploit.
C.D.V.: Do see you the Marxist focus on primarily a critique of capitalism as an issue limiting its ability to articulate a positive alternative to market economies?
A.K.: Definitely. But this applies to post-Marx Marxism rather than to Marx himself.
Although it is commonly said that Marx was a theorist of capitalism, not of socialism, there is a lot in his work that pertains to the new society, sometimes indirectly, sometimes directly. It’s true that he left no “blueprints” for what to do––no “recipes … for the cook-shops of the future,” as he put it. Yet he battled Proudhonism and similar tendencies in the movement throughout his life, demonstrating that what they proposed, in order to get rid of capitalism and/or the defects of capitalism, would not be viable and would lead to a return to capitalism. And he worked out to some extent what would actually need to be changed in order to transcend capitalism. That work needs to continue—Marx does not provide “the answer” —but I think his work provides a foundation.
The first of his works that criticizes Proudhonism and similar supposed alternatives to capitalism is of course The Poverty of Philosophy. Then the Grundrisse begins with a 60-page critique of Alfred Darimon, a Proudhonist. In A Contribution to the Critique of Political Economy, there’s a short but very important critique of John Gray’s proposal for a state bank to coordinate a “labor money” system. Then, in Capital, the whole third section of the first chapter, which people generally can’t make heads or tails of, is a dialectical demonstration that the Proudhonist proposal to abolish money while leaving commodity production in existence is like a proposal to “abolish the Pope while leaving Catholicism in existence.” The first necessarily and inevitably arises on the basis of the second. And much of the theory of the determination of value by labor-time in Capital is a development and refinement of ideas first put forward against Proudhon in The Poverty of Philosophy.
Finally, there’s Marx’s “Critique of the Gotha Program.” The core of it is his contention that “[R]ight can never be higher than the economic structure of society and its cultural development conditioned thereby.” On the basis, he criticizes the Program’s call for “fair distribution” within capitalism as empty sloganeering, and he details of the new relations of production that would be needed in order to have a distribution of income that’s substantially different from what now exists. He discusses the production relations that would allow remuneration to be based on the amount of work people do, relations that characterize the initial phase of communist society, and then he discusses the production relations that would exist in a higher phase of that society. He concludes that “only then”––only on the basis of the production relations that characterize the higher phase––“can the narrow horizon of bourgeois right be crossed in its entirety and society inscribe on its banners: From each according to his ability, to each according to his needs!”
I think the most important aspect of Marx’s work on the future society is the methodology: don’t try to mentally construct the world you want or negate a particular aspect of the present society that you dislike––money, markets, or whatever. Instead, think through how proposed alternatives would actually work, how the various aspects would interrelate, and what the unintended consequences of these proposed alternatives would be. Identify what exactly must be changed, and all of what must be changed, in order to actually transcend capitalism. Far too much leftist thinking ignores all this; it seems to be based on an implicit belief that you can just implement any decision you make and that it will work according to plan, without any unintended consequences. That’s hopelessly naïve.
C.D.V.: Most Marxist scholarship has moved itself into the domain of the humanities/cultural critique and away from the economic critique. Do you think this has led to a situation where certain left-wing economists can assert that there are contradictions within the economic realm of Marxist critique without a fairly significant scholarly backlash or even discussion within the larger “Marxist” intellectual milieu?
A.K.: I don’t think there is anything particular about a turn to humanities and cultural critique in this regard. But this turn is an instance of a broader fragmentation of Marxism that has taken place. This fragmentation is certainly among the factors that allow assertions that Marx’s Capital is internally inconsistent to go unchallenged.
If one is eclectic, the internal consistency of Marx’s thought, and maybe even the internal consistency of one’s thought, isn’t so important. In addition, many people’s interest in Marxism isn’t interest in Marx’s own Marxism, and many others’ interest in Marx’s Marxism is actually interest in certain specific facets of his thought that don’t include his critique of political economy. They might be interested in political economy––for instance, concepts of “Fordism” and “post-Fordism” developed by the Regulation school are important parts of a lot of the Marxism in cultural studies and the humanities––but not Marx’s specific critique of political economy. None of these people’s oxen are the ones being gored, so the allegations of internal inconsistency aren’t going to matter much to them.
Of course, such people, as well as non- and even anti-Marxists, might regard false allegations of inconsistency as a serious ethical problem that demands a response from them. But unfortunately there are very few people like that.
There are also other phenomena that hinder what you call “fairly significant scholarly backlash.” One is that a fair number of non-economists have a stake in Marx being internally inconsistent. For instance, David Harvey’s work is built on the alleged inconsistencies and the need to revise Marxism in light of them. Another is the academization of Marxism. Much of academia in our day operates on the basis of a drive to say something novel in order to promote one’s career, and I have a sense that many academics think it’s cute, just “boys will be boys,” when Marxist and other left-wing economists justify their novel approaches and ideas by claiming that Marx was inconsistent and needs to be corrected. They recognize kindred spirits.
C.D.V.: Do you think that lack of economic and mathematical knowledge has played a large part in “Marxists” claiming that the last decade somehow disproves the declining rate of profit thesis and (in the acceptance and popularization of this rejection by left-wing publications like Monthly Review?
A.K.: Not really. The Monthly Review school has a long track record of opposing Marx’s law of the tendential fall in the rate of profit, or at least rejecting it in practice. The principal founder of that school, Paul Marlor Sweezy, was no lightweight in economics, including mathematical economics.
I am quite troubled by claims that the rise in the rate of profit during the middle of the last decade somehow disproves the idea that the fall in the rate of profit was an important cause of the Great Recession. It’s a straw man argument, because I don’t think anyone has said that the fall in the rate of profit was a proximate cause of the recession. I for instance stress that it was an underlying and indirect, but nonetheless key, cause. And I frankly don’t think that lack of economic or mathematical knowledge is at all responsible for this straw man argument. You don’t need to know any economics or math to understand the distinction between an immediate cause and an indirect cause.
However, I do think that lack of economic and mathematical knowledge plays some part in the debate. Because of its lack of knowledge, most of the public has a hard time understanding a lot of the debate. So it doesn’t call authors out for bad arguments, bad evidence, or bad criticism. That helps them get away with it; and authors sometimes exploit this problem by being unnecessarily technical when they make their arguments and criticisms. This is why I’ve been emphasizing that there is no serious controversy concerning how to measure the rate of profit. It’s not a measurement issue. It’s a conceptual and ethical issue: one side calls something a “rate of profit” that just isn’t what people almost always mean when they refer to the rate of profit, namely profit as a percentage of the money that was invested.
C.D.V.: I know that I have had to learn large amounts of nonmarxist economics to really discuss Marx and sometimes I feel like these later developments distort my reading. What do you see is necessary prior knowledge before seriously embarking to understand Das Kapital?
A.K.: I don’t think you need to have any specialized knowledge beforehand. You don’t need to have read all of classical political economy, or even the whole of Ricardo’s Principles, ahead of time. You don’t need to have read the whole of Hegel’s Science of Logic ahead of time. I do think Lenin was quite right: “It is impossible completely to understand Marx’s Capital, and especially its first chapter, without having thoroughly studied and understood the whole of Hegel’s Logic.” But “impossible completely to understand” is very different from “completely impossible to understand.” If you’re just reading Capital for the first time, you’re not going to understand it completely even if you do read the whole of the Logic and Ricardo’s Principles and whatever.
Reading all this stuff as a prerequisite to reading Capital is a great way never to get to it. And it wouldn’t help much, because you need it mostly as reference material, not as general background material. For instance, if you read the first chapter, the way in which Marx uses the opposition “concrete/abstract” might be unfamilar to you, so you need to read a bit of philosophy. And if Marx’s statement that the commodity in the equivalent form is “endowed with the form of value by nature itself” seems mysterious, you need to go back to his basic definition of “exchange-value.” If you still don’t get it, you need to read a bit of classical political economy.
So you don’t need prior knowledge, but you do need to fill in the gaps along the away, as you encounter all manner of difficulties. Trying to intuit or “getting a general sense of” a passage doesn’t get you very far with a book like Capital. You need to pick up bits of a lot of different disciplines––mostly economics, philosophy, and political thought, but also bits of mathematics, history, literature, physical science, etc.
One thing that long experience with learning and teaching Capital has convinced me of is that you should absolutely never use primers on it or popularizations of it in order to try to understand its arguments and lines of argument. The main problem is that popularizations make it harder, not easier, for you to understand them; this is a major reason why they are still so misunderstood and little understood. Precisely because Marx’s ideas are difficult and popularizations are easier, the latter become an easy substitute for the original text. If we read the original text at all, we do so through the eyes of the popularizer. That’s a great way to remain unable to follow Marx’s own arguments no matter how much time you spend “reading” the book and no matter how much of it you’ve “read.” An additional problem is that none of the secondary literature on Marx provides an “innocent” or neutral interpretation, and a huge percentage of it is in bad faith. Its commonplace to write “Marx says,” followed by what you think––which you know he never said.
C.D.V.: Anything that you would like to say in closing?
A.K.: I look forward to meeting you in person soon. And I greatly appreciate that you’ve given me the opportunity to share my thoughts on these issues with the public. This isn’t just a pro forma “thank you.” I answer a lot of questions, in e-mails, after public talks, in interviews, etc. They’re almost invariably questions that the questioner wants answered. But you’ve given me the very rare opportunity to also answer some questions that I want to answer. I don’t mind answering questions that others want answered, but it’s nice when my wants matter as well, and nice when there’s a genuine dialogue. I greatly appreciate the fact that you’ve made this interview into one.
C.D.V.: Thank you. I have learned quite a bit from this dialogue, and I look forward to meeting you too.
Symptomatic Commentary 