Value, Capitalist Dynamics and Money: Volume 18

Marx's 1865 lectures offer an easily accessible summary of his theory, addressed to an English-speaking audience. However, one weakness preventing common usage (including classroom use) is the dialogue in the first twenty pages with one John Weston. This abridged version stays with the exact words used by Marx, while eliminating almost all reference to the dialogue with Weston. The currency of that time in its division into three units is also decimalized into its modern form. The result is more readable and modern, yet completely faithful to Marx's presentation.

This prefaces the translation of Chapters I and VII of Tugan-Baranowsky's book Studien zur Theorie und Geschichte der Handelskrisen in England, published in 1901. Biographical information about Tugan-Baranowsky is provided and the importance of his work in the foundation of both “Marxian Economics” and the Surplus Approach School is indicated. The Preface also includes bibliographical references, especially regarding the different editions of Tugan's Studien, and the complete index of the 1901 edition of this book.

The importance of the market in the modern economic order. - Natural exchange. - The impossibility of a general overproduction within natural exchange. - The money-mediated exchange. - The possibility of general overproduction of commodities. - The market. - Simple commodity production. - The regulation of production by consumption. - Capitalist production. - The lack of relation between production and consumption. - Simple reproduction of capital. - Capital accumulation. - The principle of proportional distribution of production. - The two fundamental contradictions of capitalist economy. - Credit. - Dependency of crises on the contradictions of capitalist economy. - The necessity of crises. - Foreign trade.

Presentation of this theory. - The law of the tendential fall in the rate of profit. - Absolute overproduction of capital. - Relation between market stagnation and the underconsumption of the masses. - Critique of the law of the falling rate of profit. - Lack of necessary relationship between the composition of capital and the rate of profit, proved on the basis of the theory of labor-value. - Marx's theory of surplus-value is untenable. - The essence of the problem of profit. - The problem of profit and the problem of value. - The origin of profit. - Reciprocal relations between the three component parts of social product. - The ethical factor in Marx's theory of surplus-value. - The law of development of capitalism and the conditions of its transformation into socialism.

Some of Henryk Grossman's contributions to Marxist economic theory are familiar. Ignorance and misinformation about his life has accompanied and sometimes underpinned widespread criticism of his account of economic crises and neglect of his other work. Grossman's life and work before he moved to Frankfurt am Main in 1925 and wrote his best known publications are therefore outlined, highlighting his deep and active involvement in the Jewish social democratic movement in Galicia before and in the Polish Communist movement after the First World War.

This largely unknown contribution by Henryk Grossman to Marxist crisis theory was originally delivered as a paper in 1919, a decade before his major work on the subject. Grossman changed his views on some issues during the intervening period, notably whether disproportionality was the fundamental cause of crises. But some of the perspectives developed in his book were already evident in this brief, earlier work.

This chapter argues that Marx's definition of “accumulation of capital” is sufficiently ambiguous to lead to troublesome conceptions after his death. It is held that Lenin moved conceptualization in a misleading direction by moving accumulation of capital away from social relations of production. Luxemburg's criticism of Marx's schemes of extended reproduction, on the other hand, is very helpful in moving back towards an emphasis on class relations. To conclude, a definition is offered: accumulation of capital as increase of wage-labor with its associated constant capital. An appendix provides the first English translation of Lenin's marginal notes on Luxemburg's book.

Research in the temporal single-system (TSS) interpretation of Marx's value theory has refuted the Okishio theorem, which had supposedly disproved the law of the falling profit rate. In response to critics who confirm the correctness of the TSS refutation but, curiously, still uphold the Okishio theorem, this paper clarifies what the theorem actually asserts and why that assertion is false. It also shows that TSS results do matter: the contradiction between value and use-value, and the difference between temporal and simultaneous valuation, are crucial. Finally, the paper examines the role the Okishio theorem has played in suppressing Marx's work.

“Temporal single system” value theorists use numerical examples to establish their notion of a rising “material” rate of profit in capitalist accumulation, which however masks the fall in the true underlying “value” rate of profit. When a typical example of this kind is studied carefully, however, we find that the “value” rate, while falling initially in some instances, eventually follows, or tracks, the trend in the “material” rate. Temporalism therefore does not provide a coherent foundation for theorizing long-term trends in the profit rate; this requires a return to Marx's original position focusing on the organic composition of capital.

This chapter critically examines the Post Keynesian horizontalist theory of money from a Marxian perspective. Horizontalist analyses are criticised from three angles. First, monetary theory should be historically specific. Second, credit money is an advanced form of money, created mostly as liabilities of financial institutions, and its supply is endogenous in a more complex and profound sense than Post Keynesian analysis allows. Third, although credit money is endogenous, the quantity supplied is not always compatible with the needs of the sphere of circulation. Consequently, pronounced instability and inflation are possible for purely monetary reasons.

Marxian analyses of inflation tend to fall under three broad categories, those that emphasise primarily the role distributive conflicts, monopoly power, or state intervention on the dynamics of credit money. This article reviews these interpretations, and indicates how they can be integrated. The proposed approach, based on the ‘extra money’ view, departs from the circuit of capital and the endogeneity of credit money in order to explain inflation in inconvertible paper money systems.