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An Essay On Marxian Economics
An Essay On Marxian Economics
MARXIAN ECONOMICS
AN ESSAY ON
MARXIAN ECONOMICS
JOAN ROBINSON
Second Edition
ISBN 978-0-333-05800-8
ISBN 978-1-349-15228-5 (eBook)
DOI 10.1007/978-1-349-15228-5
CONTENTS
Preface to the Second Edition
page vi
xxii
Foreword
CHAPTER
I. INTRODUCTION
II.
DEFINITIONS
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For him this was the vital clue to the whole problem.
If prices were proportional to values, net proceeds from
sales of the output of a man-hour oflabour time would be
uniform for all commodities, so that, with a uniform wage
rate, there would be a uniform ratio of profits to wages.
Marx was not ignorant of Ricardo's difficulty- that for
technical reasons different commodities require different
ratios of capital to labour, and competition between
capitalists tends to establish prices that yield a uniform
rate of profit on capital so that a uniform ratio of profits
to wages cannot obtain - but he evidently felt that in
some sense the law of value is true all the same.
This ancient puzzle has now been cleared up by the
publication of Sraffa's Production of Commodities by Means
of Commodities; the famous problem of the transformation
of values into prices has been laid to rest. In given technical conditions there is a pattern of prices corresponding
to each rate of profit. Prices are proportionate to values
when the rate of profit is zero. (Keynes, by the way,
pointed this out to me when he read my little book.)
With positive rates of profit, prices would be proportionate to values only if all commodities required the
same ratio of capital to labour. It is sometimes maintained
that, in Volume I, Marx was intending this situation to be
assumed. If so, Ricardo's difficulty was simply ruled out.
This would seem to support my contention that, once
the overall rate of exploitation is given, relative prices
are not particularly interesting.
As a historical process the prices of manufactures were
evolved as capitalism gradually conquered the peasant
and artisan economy. At first the level of wages that it
was necessary to pay was set by the level of earnings of
artisans, while the prices of commodities were limited
by the prices of handicraft products. The higher level
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Employment and Wages. It is generally recognised nowadays that unemployment due to a failure of effective
demand (often called "Keynesian") must be distinguished
from the non-employment (often called "Marxian")
which comes about when the available supply of labour is
growing faster than the number of jobs offered by the
capitalist economy. Marx thinks of the supply of labour
as being fed by the ruin of the peasant and artisan
economy. In his anxiety to combat the reactionary views
of Malthus he refused to admit that a rapid growth of
population is deleterious to the interests of the working
class. This seems to be an aberration, inconsistent with
the main line of his theory.
It is also now recognised that a frontal attack upon
money-wage rates, in a developed industrial economy,
cannot effectively reduce the rate of exploitation (the
share of profits in net value of output), because profit
margins will generally be maintained simply by raising
money prices proportionately. On the other hand, to call
off the struggle and keep money-wage rates constant,
would be likely to allow the rate of exploitation to rise,
for money prices would be held more or less constant
while costs gradually fell as a result of technical progress.
(Imperfect competition cannot be relied upon to limit
margins - rather it fills up the gap with selling costs and
advertisement of all kinds.) This kind of rise in profits
is not healthy for the capitalists, as it is associated with a
restriction upon the purchasing power of the workers, so
that effective demand fails to expand with productive
capacity. Thus the struggles of the trade unions, though
they do not succeed in reducing the relative share of
profits, save the capitalists from the ill effects of increasing it.
On these points further discussion and experience
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xvii
i.
value of
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FOREWORD
THE purpose of this essay is to compare the economic
analysis of Marx's Capital with current academic teaching.
The comparison is, in one sense, a violent anachronism,
for the development of Marx's thought was influenced by
controversy with his own contemporaries, not with mine.
But if we are interested, not in the historical evolution of
economic theory, but in its possible future prqgress, this is
the relevant comparison to make.
Until recently, Marx used to be treated in academic
circles with contemptuous silence, broken only by an
occasional mocking footnote. But modern developments
in academic theory, forced by modern developments in
economic life - the analysis of monopoly and the analysis
of unemployment- have shattered the structure of orthodox doctrine and destroyed the complacency with which
economists were wont to view the working of laisser-faire
capitalism. Their attitude to Marx, as the leading critic
of capitalism, is therefore much less cocksure than it used
to be. In my belief, they have much to learn from him.
The chief difficulty in learning from him arises from the
peculiar language and the crabbed method of argument
which he used, and my purpose is to explain what I understand Marx to have been saying in language intelligible to
the academic economist.
At the same time, I believe that modern academic
economics has something to offer to the Marxists. First,
a reconsideration of Marx's argument in the light of the
more precise and refined methods of modern analysis
clears up many obscurities in his theory, and helps to
xxii
FOREWORD
Seplmiber 1941
NOTE
I HAVE made a small number of alterations in the text of
the first edition of this book. The only one of substance
is in the appendix to Chapter III where there was an error
in my original argument.
JOAN ROBINSON
CAMBRIDGE
November 1946
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