This book presents an account and technical assessment of Marx's economic analysis in Capital, with particular reference to the transformation and the surplus-value doctrine, the reproduction schemes, the falling real-wage and profit rates, and thetrade cycle. The focus is on criticisms that Marx himself might have been expected to face in his day and age. In addition, it offers a chronological study of the evolution of that analysis from the early 1840s through three "drafts": documents ofthe late 1840s, the Grundrisse of 1857-1858, and the Economic Manuscripts of 1861-1863. It also provides three studies in application, focusing on Marx's "evolutionary" orientation in his evaluation of the transition to communism and his rejection of"egalitarianism" under both capitalist and communist regimes; his evolving perspective on the role of the industrial "entrepreneur"; and his evolving appreciation of the prospects for welfare reform within capitalism. Throughout, Hollander emphasizesMarx's relation with orthodox canonical classicism.
PART ONE. CAPITAL. PRINCIPLE FEATURES OF THE MARXIAN ″CANON″
1 Value and Distribution 11
A Introduction 11
B On ″Demand-Supply″ Analysis 13
C TheTransformation of Values into Prices: Formal Analysis 17
D The Transformation and the Allocation Mechanism 23
E Competition Constrained: Land Scarcity and Firm Size 28
F On″MarketValue″ and Competition 31
G The InverseWage-Profit Relation and Profit-Rate Equalization 38
H Materials, the Luxury-Goods Sector, and the General Profit Rate 40
I The Rate of Surplus Value as Endogenous Variable 42
J More on Final Demand and Distribution 46
K Marx′s Strategy 48
L Concluding Comment: The Baumol-Samuelson Exchange 53
2 Elements of Growth Theory 55
A Introduction 55
B Setting the Stage: Stationary Reproduction as Circular-Flow Process 55
C Capital Accumulation 59
D Determinants of the Rate of Accumulation 61
E The ″Simple Reproduction″ Scheme 68
F The″Extended Reproduction″ Scheme 75
G Concluding Comment 83
3 Economic Growth and the Falling Real-Wage Trend 85
A Introduction 85
B The FallingWage Trend 88
C The SubsistenceWage and the Value of Labor Power 90
D The FallingWage Trend and Population Growth 94
E The Industrial Reserve Army and CyclicalWage Fluctuations 100
F Inter-Sectoral Labor Movements 102
G The Participation Rate 104
H Concluding Comments: Objections to Malthus 106
4 Economic Growth and the Falling Rate of Profit 110
A Introduction 110
B The Basic Analysis 111
C The Conditions for a Falling: Rate of Profit 114
D Increasing Rate of Surplus Value and Cheapening of Constant Capital 118
E The Limited Impact of a Rising Rate of Surplus Value 120
F Implications of Differential Rates of Productivity Increase 123
G Technical Progress and the Falling Profit Rate: An Overview 127
H OnSecular Underconsumption 129
I Concluding Comments: On the Significance of the Falling Profit Rate 132
5 The Cyclical Dimension 134
A Introduction 134
B The Cyclical Chronology 135
C Trend and Cycle: Causal Mechanisms 139
D The Raw Material Constraint and Upper Turning Point 143
E The Labor Constraint and Upper Turning Point 145
F The Monetary Dimension 150
G Inter- and Intra-Departmental Imbalance 157
H ANoteonthe ″Echo Effect″ 159
I Concluding Remarks 160
PART TWO. ORIGINS: MARX IN THE 1840s
6 Marx′s Economics 1843–1845 165
A Introduction 165
B PriceTheory 166
C Wage-Rate and Profit-Rate Trends 171
D The Private Property System: Ricardo as bˆete noire 176
E On Aggregate Demand and ″Overproduction″ 182
F In Partial Defence of Proudhon 184
G Objections to Friedrich List 188
H Summary and Conclusion 190
7 A″First Draft″ of Capital 1847–1849 194
A Introduction 194
B Allocation, Cost Price, and the Labor Theory 195
C Differential Rent 204
D Labor as Commodity 206
E On″Labor Power″ and the Source of Surplus Value 207
F TheInverse Wage-Profit Relation 212
G The Falling Real-Wage Trend 214
H More on the Real-Wage Trend: Increasing Organic Composition, Demographic Patterns, and the Reserve Army 218
I Profit-Rate Determination: ″Competition of Capitals″ 223
J Labor and Free Trade: On Marx′s Ricardian bonˆa fides 224
K Summary and Conclusion 227
PART THREE. A ″SECOND DRAFT″ OF CAPITAL: THE GRUNDRISSE 1857–1858
8 1857–1858 I: Surplus Value 235
A Introduction 235
B The Basic Doctrine 236
C Surplus Value and the Transition to Growth 244
D Elements of a Growth Model: Productivity Increase, Population Growth and the Reserve of Unemployed 246
E The Falling Rate of Profit 252
F The″Transformation″ 254
G AMarxian ″Reply″ to B¨ohm-Bawerk 256
H Surplus Value: Matters of Timing and Indebtedness 258
I On Ricardo and Surplus Value: An Excursus 260
J Summary and Conclusion 265
9 1857–1858 II: Value ″Realization″ 268
A Introduction 268
B Capital Turnover: A Circular-Flow Process 268
C Obstacles to Value Realization 273
D Onthe Law of Markets and Overproduction Literature 280
E OnWorking-Class Consumption 285
F Summary and Conclusion 289
PART FOUR. A ″THIRD DRAFT″ OF CAPITAL: THE ECONOMIC MANUSCRIPTS 1861–1863
10 1861–1863 I: Surplus Value – Profit, Rent, and Interest 293
A Introduction 293
B Profit-Rate Equalization and the Transformation 293
C The Transformation Aborted: Absolute Rent and the Priority of the Industrial Sector 297
D The Falling Rate of Profit and Its Significance 306
E Materials, the Luxury Sector, and the General Profit Rate 311
F TheRateofInterest 312
G Commercial Capital and the Surplus-Value Doctrine 318
H Summary and Conclusion 324
11 1861–1863 II: Sectoral Analysis, Accumulation, and Stability 326
A Introduction 326
B Sectoral Analysis and the Constant Capital ″Riddle″ 326
C Conditions for ″Continuous″ Accumulation 334
D Aggregate Demand Constraints 338
E The Secular-Cyclical Nexus 341
F Sources of Cyclical Instability 344
G The Recovery Process: Corrective Mechanisms 347
H Onthe ″Overproduction″ Literature 349
I Summary and Conclusion 351
12 1861–1863 III: The Labor Market 353
A Introduction 353
B The ″Wage-Fund″ Doctrine Rejected: Synchronized Activity vs. Advances 353
C Labor Demand and Technical Change 360
D Labor Supply: Population Growth and the ″Reserve Army″ 368
E The Mechanics of Population Growth and the FallingWage Trend 375
F Summary and Conclusion 380
PART FIVE. TOPICS IN APPLICATION
13 Economic Organization and the Equality Issue 385
A Introduction 385
B Objections to Egalitarian Reform 386
C TheAllocative Role of the Free Market vs. Central Control 396
D SomeUnexpected Parallels 401
E Summary and Conclusion: The Evolutionary Dimension 406
14 Is There a Marxian ″Entrepreneur″? On the Functions of the Industrial Capitalist 409
A Introduction 409
B Preliminaries: Industrial Organization 411
C TheSupervisory and Allocative Function 414
D Science and the Sources of New Technology 419
E Innovatory Investment 425
F TheCategoryof ″Minor″ Improvement 428
G OnMeasurable Risk and Insurance 429
H On ″Profit of Enterprise″ in Capital 3 430
I OnCooperation 435
J On Joint-Stock Organization and Limited Liability 435
K Conclusion: The Industrial Capitalist and Uncertainty Revisited 438
15 Principles of Social Reform 444
A Introduction 444
B Early Statements 444
C Marx′s ″Revisionism″: The 1860s and 1870s 449
D Summary and Conclusion 461
Conclusion: A Recapitulation and Overview 463
A TheTheory of Surplus Value 463
B Marx and the Classical Canon: The Theory of Value 471
C Marx and the Classical Canon: The Trend Path of the Factor Returns 477
D Marx as ″Revisionist″ 479
E Marxand the Moderns 483
F Epilogue: On Engels and the ″Closure″ of Marx′s System 488
