The Economic Ideas of Marx s Capital Steps towards post-keynesian economics Ludo Cuyvers Routledge R Taylor & Francis Group LONDON AND NEW YORK
Contents List of illustrations Foreword xi xiii Introduction 1 1 Economic reproduction 9 1.1 Production and reproduction 9 1.2 The Marxist schemes ofreproduction: introduction 11 1.3 The workings of the Marxist schemes of reproduction under capitalism 14 1.4 What canbe learnedfrom Piero Sraffa's "Standardsystem"? 18 1.5 The significance of the Marxist schemes of reproduction 22 2 The (mostly quantitative) labour theory of value today 32 2.1 What is the labour theory of value saying? 32 2.2 The transformation problem 38 2.2.1 Marxian prices of production 38 2.2.2 Production prices proper 39 2.2.3 The mathematical formulation of values and prices 41 2.3 Elements of a formal Solution to the transformation problem: corrections of Marx 's procedure 44 2.3.1 Prices of production as the sum of dated labour time 44 2.3.2 Marx's "average sector" and Sraffa's "Standard system" 46 2.3.3 Prices of production as the outcome of iterative adjustments, starting from labour values 50 2.4 What is the logic in transforming values into prices of production? 52 2.4.1 The rate of surplus value determines the rate of profits, not the other way round (Morishima's "Fundamental Marxian Theorem") 53
viii Contents 2.4.2 The Transformation of labour values into prices of production: logic or reality? 54 2.5 A short digression into technological coefficients, subsistence wages and the "law of value " 56 2.6 What about monopoly prices? 60 2.7 Post-Keynesian views about the labour theory of value 62 2.8 To conclude 66 3 Towards a better understanding of what will follow - long-term economic growth and dynamics 75 3.1 The "Standard system " again 75 3.2 The maximum rate of growth and the attainable economic growth in case of non-necessary consumption 79 3.3 Füll versus incomplete realisation of surplus value 85 3.4 What about socially necessary consumption? 88 3.5 The contribution of the post-keynesian neo-marxists 91 4 Productive and unproductive labour 101 4.1 Spending out of surplus value 102 4.2 Cost-increasing inputs, value creation and the technological inputs structure 103 4.3 The translation of unproductive inputs and Outputs in the linear model of production 108 4.4 Prices and cost-increasing inputs in the total inputs structure III 4.5 Unproductive cost-increasing inputs and the rate of profits 117 4.6 Unproductive labour today andfurther arguments 123 4.7 Capitalist cost-increasing inputs: productive but wasteful... 127 4.8 Conclusions 129 5 Laws of motion of capitalism - accumulation, technical change and super-profits 135 5.1 Marx on the relationship between capital accumulation, the rate of profits and the wage rate, and the so-called "industrial reserve army" 136 5.2 The capitalist hunger for super-profits as the motivation for technical change and Innovation 137 5.3 The effect of technical change on the surplus value and the rate of surplus value 140 5.4 The effect of technical change on the organic composition of capital 145
Contents ix 5.4.1 An increase in labour productivity with unchanged proportional inputs of raeans of production 146 5.4.2 An increase in labour productivity with decreasing proportional inputs of the means of production 148 5.4.3 An increase in labour productivity with increasing proportional inputs of the means of production 150 5.5 The scope for labour-saving but also capital-using technical change in the pursuit of super-profits 152 5.6 How did the early post-keynesians look at mechanisation and technical change? The case of Joan Robinson 's "real-capital ratio" 155 5.7 To conclude 161 Appendix: The effect of a general increase in the productivity of labour on the rate of surplus value 163 6 Long-term developments - the tendency of the rate of profits to fall 169 6.1 Marx's theory of the falling rate of profits-in a nutshell 169 6.2 The rate of profits in the linear production model 174 6.3 The relationship between labour-saving technological change and the rate of profits: generalisations in Okishio 's theorem 177 6.4 The rate of profits in the long run: some Statistical data 184 7 Long-term developments - changes in the rate of surplus value, the distribution of income and the class struggle 194 7.1 Absolute and relative surplus value from Marx 's Standpoint 195 7.2 Class struggle and the share of labour in value added 199 7.3 Exploitation and class struggle: game-theoretical insights 202 7.4 The degree of monopoly and "mark-up" pricing 206 7.5 The working of the "profits squeeze": some neo-keynesian and neo-marxist interpretations 212 7.6 Some Statistical evidence 218 7.7 What to conclude? 219 8 The economic cycle and monetary theory of Das Kapital 227 8.1 The economic cycle in Das Kapital 227 8.2 The economic cycle and the post-keynesian neo-marxists 230 8.3 Labour values and prices of production in money terms 233 8.4 Money and credit in Das Kapital 236
x Contents 8.5 The money supply in post-keynesian economic theory 240 8.6 Economic crisis and the role of money capital 242 8.7 Notebook B 113 244 8.8 To conclude 245 9 Long-term developments - underconsumption, Stagnation, long waves and flnancialisation 253 9.1 Underspending and incomplete realisation of surplus value in Das Kapital 254 9.2 Underspending based on the schemes of reproduction 257 9.3 The importance of external markets for surplus value realisation in the long run 261 9.4 The importance of military spending for surplus value realisation in the long run 262 9.5 Technological innovations as an "external market" 265 9.6 Long waves in economic activity and accumulation? 268 9.7 The development of the Service sector and "financialisation" of the capitalist economy 280 9.8 To conclude 284 10 Reflections, conclusions and an agenda for future research 295 10.1 The importance of the "no nonsense " approach of Das Kapital 295 10.2 The linear Marx-Leontief production model 296 10.3 Which of the fundamental principles of Marx 's economic theory are still intact: value, unproductive labour and the "law of value"? 300 10.4 What about the dynamics in Marx 's economic theory: technological innovation, the rate of profits and exploitation in the long run, economic cycles...? 303 10.5 Is Marx 's economics an independent doctrine, a module of the post-keynesian theory or a starting point for a post-keynesian neo-marxist synthesis? 309 Index 317