Marx’s Economic Axioms: Their Compatibility with Bourgeois Economy

© 1977, 1998
Henry A. Flynt, Jr.

One of the popular exercises among ambitious Eastern European economists of the Soviet era was to discover that Marx says exactly the same thing that is said by bourgeois operations research (I mean e.g. Robert Dorfman, Paul Samuelson, Robert Solow, Linear Programming and Economic Analysis).

I refer above all to

András Bródy, Proportions, Prices, and Planning: A mathematical restatement of the labor theory of value

but not to be overlooked are

V.S. Nemchinov, ed., The Use of Mathematics in Economics

L.V. Kantorovich, The Best Use of Economic Resources

Ota Sik, Plan and Market Under Socialism

V.V. Novozhilov, Problems of Cost-Benefit Analysis in Optimal Planning

Bela Csikós-Nagy, Socialist Economic Policy.

And this is not to mention

Howard Sherman, "Marxist Price Theory as a Special Case of Neoclassical Theory, " in Howard Sherman, Radical Political Economy.

The ambitious Eastern European economists had an unerring ability to pluck assumptions from Marx’s texts which are compatible with bourgeois economy, or which have bourgeois implications. Somehow, all economic roads led back to capitalism if you happened to have learned to see through the lens of bourgeois operations research. It convinced me in 1977 that an unintimidated, unshrinking reexamination of Marx in this regard was necessary.

It is possible to find "socialist humanism" statements in Marx’s oeuvre which assert that socialism is something more than production in publicly owned enterprises. But in no way does that obliterate the passages which furnish our sources, which appear in Marx’s most considered and extended writings. Evidently there is a literary Marx who is a "socialist humanist" and an economic Marx who bows to the scientific objectivity of economic processes (as he might have put it).

The message was loud and clear from the economic geniuses of the socialist bloc. If, for all that, people continued to insist that Marx had propounded an economic science transcending bourgeois thought, then the vision of the possibility of socialism (without which mere rebellions by the poor could never become socialism) would be forever lacking.

Marx holds that scarce input accounting (labor accounting) and efficient input utilization (labor efficiency) apply in all socio-economic formations – a contention which bourgeois ideology affirms also. Marx further holds that there are principles which, while not observed in pre-capitalist formations, apply to both capitalism and socialism – a contention which bourgeois ideology has welcomed as an admission that capitalism "was right all along" (cf. market socialism). (There are statements in Marx which assert no difference between capitalism and socialism except non-private ownership of enterprise securities – although that is not the tenor of Marx’s oeuvre as a whole.)

All the while, Marx’s principles are not identical to the version of bourgeois economics known as Neoclassical economics. Marx’s bourgeois principles differ from Neoclassical economics in giving labor a special position among the inputs of production; and in having only a rudimentary theory of utility or preference. Bourgeois interests can be represented in economics in more than one way.

Here follow the economic principles which Marx holds to apply to both capitalism and socialism. Because I am more interested in logical structure than in textual dogmatics, I will not quote Marx directly or attempt to list the principles in the order in which they appear in his works. Actually, I would hope that the principles are recognizable the the reader on the basis of a general familiarity with Marx’s works. All the same, a source in Marx for each principle appears at the end according to the bracketed numbers.

1. All necessities of human life (in society) are economic products subject to economic calculation (i.e. efficient allocation of scarce unskilled labor). Any "desirable" not subject to economic calculation is mere leisure. [1]

2. The needs of humans (in their social existence) perpetually expand. Thus, economic production must perpetually expand to meet the expanding needs. It is necessary to maximize the production of economic goods. [2]

3. Both natural resources and human labor are inputs to the production of economic goods. But labor is special in that an act of labor is inherently and inseparably the act of a specific human individual, who is also a specific consumer of output.

4. The special input, human labor, is measurable. Specifically, all labor can be measured in units of abstract unskilled labor. [4]

5. The aggregate labor-time of society is the absolute scarce resource of society. [5]

6. Production must be efficient: not one minute of labor may be squandered or wasted. [6]

7. The combination of labor-accounting and efficiency defines an intrinsic price for each economic product which can be expressed in units of labor: the minimum amount of labor required for production of the product. (A product is assumed to be useful. Marx recognizes only two possible levels of utility: 0% and 100%.) [7]

a. It follows that every economy has a price system and that the price system must be a system of efficient equilibrium prices – a mechanistic, deterministic system. [7.a]

b. The prices thus determined are used in all "economic justice" calculations, for which see below.

8. The labor which is embodied in economic products as value can be uniquely attributed to the individuals who did the labor. The value of each person’s contribution to society can be measured precisely. [8]

9. Not only can the labor-contribution of each individual be measured; the portion of the labor-contribution equal to the value of output necessary for his or her subsistence can be measured. Thus, the amount of surplus-labor done by each individual can be measured. [9]

10. Profit exists in every socio-economic formation, in the form of surplus labor. [10] The ultimate implication is that every society is a profit-maximizer; and that socialism differs from capitalism only in the way in which it allocates profit.

11. Economic justice means that each individual producer receives a share in the means of consumption proportionate to his or her labor-contribution. [11]

12. Economic progress consists in the rising productivity of labor. [12]

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Further reflections

13. From the assumption that society possesses a fixed amount of the absolute scarce resource (5), and the assumption that economic growth is a materialization of surplus labor, the inference can be made that in all societies, growth comes about through the sacrifice of present consumption: there is a trade-off between growth and consumption. Marx does not draw this conclusion; but quite enough of his economist-interpreters appear to draw it. For a "Marxist" wage-growth trade-off, see Piero Sraffa, Production of Commodities by Means of Commodities. Socialist growth is not a consumption-growth trade-off for Marx. [13] For one passage in Marx which does suggest a consumption-growth tradeoff, see Grundrisse, p. 707.

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Citations

[1] Marx classifies Robinson Crusoe’s religious observances as leisure in order to avoid recognizing them as a supra-economic necessity. Capital, Vol. 1, p. 76.

[2] Grundrisse, pp. 409, 527. Capital, Vol. 3, p. 820. German Ideology, p. 49.

[4] Capital, Vol, 1, Chs. I, II.

[5] Capital, Vol. 1, p. 73.

[6] Capital, Vol. 3, p. 187; Vol. 1, pp. 76-9.

[7] Capital, Vol. 1, Chs, I, II, esp. pp. 36, 70, 71.

[7.a] Cf. Capital, Vol. 3, p. 851.

[8] Critique of the Gotha Program, in Basic Writings, p. 118.

[9] Grundrisse, pp. 526, 573. Also cf. Capital, Vol. 3, p. 876.

[10] Grundrisse, pp. 526, 573.

[11] Critique of the Gotha Progam, in Basic Writings, p. 118. Capital, Vol. 2, p. 358.

[12] Capital, Vol. 3, p. 261, p. 820.

[13] Capital, Vol. 2, pp. 315, 358, 468-9, and especially Vol. 3, p. 876. Grundrisse, p. 612 footnote.

Publications

Piero Sraffa, Production of Commodities by Means of Commodities

Michio Morishima, Marx’s Economics: A Dual Theory of Value and Growth (1973)