a critical review Ernest Mendel's benk, "An Intreductinn tn Marxist Economic Theory", is a straightfeward literal exposition of Das Kapital, except for the third section which attempts to explain why the history of pest-war capitalism fails te vindicate the "recurrent-crises" thecry. Though a clear explanation as far as it goes, this literal apvroach seems mistaken; for the Marxist economist owes lcyalty not to Marx (still less te the text of Kapital, two-thirds cf which was unfinished at his death) but to economic theories which are useful to Marxists.
Mandel gives the enquirer no insight into why so many Marxist economists (of which Joan Robinson, Sweezy and Baran are well-known examples) gc by no means all the way with Marxist ecnnomics. Nor does the book attempt t>. explain why the idea that the increasing organic composition of capital eventually causes:a slump, was ignored by economists vntil Keynes produced a remarkably similar theory forty years later. In fact, Keynes, rather surprisingly, is not mentiened at all. The enquirer into Marxist economic theory does not just want to know what Marx said - if he has some guide as to which they are (such as Freedman's Pelican, "Marx en Economics") he can read the most important bits of Kapital in not very much more time than it takes to read the first two sections of Mandel's book. what the reader alsn needs is a clarification of the majicr ideas of beurgeois economics -— cf which the most important for ths purpnse are the supply-—and-~jemand theory of price determination, the theory of the joint productive role of land, labour and capital, Keynes' analysis ef the 1930's slump, and the bourgeois explanation of why capitalists continually substitute machinery for labour. It would be an insult to the non-econcmist to suggest that he does not know something about these things from ccrmon sense and common kncwlege, But it may not eccur to him to put them in the unfamiliar setting of an economist's "model" where things happen only under restricted assumpticns, the nature of which affects the application of the model to reality and te further steps in the formation of economic theory. And it is necessary to compare bourgeois models with Marx's models in orderto understand the criticisms of Marx's econorics made by Bernstein, Jean Robinson, Croce and Pareto - to mention but a few. Most of these criticisms concern the validity of the labour theory of value. The crux of the matter is; we all knew that prices fluctuate with supply end demand, yet Marx says the price of an article is determined by the amount of labour put into it. Are these ideas e xmpatible? Obviously they are, if Marx's model assumes supply and demand constant - that is, if he is iust trying to explain why a fur coat costs around £100 and a woollen one around £15, instead of any other prices you care to think of. But when we have erected upen this model the concept of surplus value and all that fellows from it - i.e. the whole »7f Marx's eccnomic thenry, dces it or does it not ratter that the basis of the analysis leaves out the ferces which make prices fluctuate? If the labour theory of value falls, does Marx's econorics fall? And Marx's sociology with it?
An Introduction to Marxist Economic Theory ... continued
Supply and demand are generally neglected in Kapital, nd this throws
doubt not only, as Bernstein argued, upon the validity of the labour
theory of value, but upon the theory of the falling rate of profit -
capitalists increase the organic composition of their capital because
they think they will make money out of it (this is common sense); why
then do their expectations prove false? Something must happen to
prices; Marx leaves a gap between this point and the "increasing-
risery" theery; Keynes does not. Marxists must use bourgeois economics
where it fills in such gaps; Marx, after all (quite apart from the
fact that his work was unfinished) belonged to an age of under-
develped ecenomic science. Mandel, by sticking so much to what Marx
said, has lost the epportunity to produce a badly needed short "lay"
version ef how this can be dene; am he has failed to provide any
reply to several of the criticisms of Marx's theory which his readers
are likely te have met long before they came to the theory itself.
The third section of the book is considerably better; but in its
analysis of what has provided capitalism with markets since the slump,
the fact af increased living standards for the working class, and the
most important question of whether these are due to trade unions'
efforts, is ignored.