Marx and his Critics

Marx has fared badly at the hands of academic economists, more so from those who claim that they are Marxists; economists like the late editor of THE MONTHLY REVIEW, Paul Sweezy and the Labour Party supporter, Lord Desai, formerly professor of economics at the London School of Economics.

Marx’s ideas were never meant to be the exclusive preserve of the seminar room or the conference hall. CAPITAL should never have become a play-thing of academics where the real usefulness of his ideas, particularly the labour theory of value, lay outside the university within the day-to-day political class struggle. Marx was foremost a Socialist whose contribution to Socialist theory was to assist the working class to consciously and politically replace capitalism with Socialism. Marx’s ideas present a theoretically consistent and coherent account of capitalism and its revolutionary socialist conclusion. Marx did not want to explain the world only, but mainly to assist the working class in changing it in a revolutionary way.

A recent contribution to this debate is Andrew Kliman’s RECLAIMING MARX'S CAPITAL: A REFUTATION OF THE MYTH OF INCONSISTENCY (Lexington Books, 2007). The book seeks to reclaim CAPITAL from the myth of internal inconsistency levelled at Marx by academics, a myth that serves to justify the censorship of his critique of political economy. Professor Kliman methodically sweeps away the numerous misinterpretations and misreadings of Capital thereby confirming in Marx’s own terms his theories of value, profit and economic crisis.

Kliman shows that Marx’s critique of political economy is the best account of explaining capital accumulation and the expansion of value moving through time from one economic crisis to the next. He uses a “temporal single-system” of interpreting Marx’s critique of capitalism which avoids the errors made by his numerous critics. Furthermore Kliman demonstrates, through a close textural reading of Capital and the so-called “transformation problem”, that Marx neither held that the inputs and outputs going into production are to be valued simultaneously nor create two separate systems of values and prices in the solution to it (p.2).

Kliman usefully recalls a remark made by the philosopher of science, Paul Feyerabend:

[E]xperts]” frequently do not know what they are talking about and “scholarly opinion”, more often than not, is but uninformed gossip…General acceptance does not decide a case – arguments do (AGAINST METHOD, revised ed. Verso 1988)

So what of Marx’s critics?

For over a hundred years, Marx’s theory of capitalism has been charged with being theoretically weak and unable to give a coherent account of commodity production and exchange for profit. His labour theory of value is criticised for being internally inconsistent and, in particular, his theory of the tendency of the rate of profit to fall is written-off as having no application to the real world. Marx’s critics claim that it does not matter what social and economic problems face the working class his labour theory of value is useless in interpreting these problems in a consistent and coherent way.

The charge of inconsistency against Marx began with the publication of Eugene Böhm-Bawerk’s KARL MARX AND THE CLOSE OF HIS SYSTEM (1896), a book still given a high profile on free market web sites, like the von Mises Institute where copies of the book are still sold. Free Market economists believe that Böhm-Bawerk gave a knock-down refutation to Marx’s critique of political economy set out in his three volumes of CAPITAL Böhm-Bawerk’s book was first published in English in 1898 and is periodically and uncritically cited by economists against Marx and his labour theory of value.

Böhm-Bawerk held that Marx’s committed an act of contradiction when he transformed values into prices of production. In the first volume of CAPITAL Marx assumed commodities sold at their values while in the third volume (edited and published by Engels after his death) he showed that commodities sold at their price of production. The account of Marx’s method and presentation given by Böhm-Bawerk was superficial. The evidence he amassed against Marx was merely cherry-picked snippets and quotations often taken out of context but never a movement beginning with the process of capitalist production, then the process of circulation culminating in the movement of capital as a whole.

In 1907 another, more mathematically rigorous, criticism of Marx was published. The Russian economist, Ladislaus von Bortkiewicz, influenced by the neo-classical economist Leon Walras, wrote a paper, ON THE CORRECTION OF MARX'S FUNDAMENTAL THEORETICAL CONSTRUCTION IN THE THIRD VOLUME OF CAPITAL. This paper was republished and seemingly endorsed without criticism by Paul Sweezy in 1949 as an appendix to his book republishing Böhm-Bawerk’s original criticism of Marx and a rebuttal by the leading social democrat economist of his day, Rudolf Hilferding (Sweezy, Paul M., ed. Karl Marx and the Close of His System & Böhm-Bawerk's Criticism of Marx).

According to Bortkiewicz, Marx made two fatal errors:

First: his labour theory of value does not connect to any theory of prices, production prices or otherwise; that is, the sum of values do not equal to the sum of production prices.

Second: his theory of surplus value does not connect to profit and a theory of the rate of profit; that is, the sum of surplus value does not equal to the sum of profit.

Bortkiewicz “demonstrated” Marx’s theoretical inconsistency through the use of simultaneous equations within a static neo-classical framework. The equations used in the alleged proof of Marx’s inconsistency meant that it could only be followed by those with some degree of mathematical training.

Marx’s “economic obituary” was finally written in 1971 by the late professor Paul Samuelson, a Nobel laureate who had been given a year’s leave from university duties to write a critique of Marxian economics. Supported by a generous National Foundation Grant, he set out to produce reasons why a revised interest in Marx by students was mistaken. Eventually he published his findings in one of the prestigious economic journals in the US under the heading "UNDERSTANDING THE MARXIAN NOTION OF EXPLOITATION: A SUMMARY OF THE SO-CALLED TRANSFORMATION PROBLEM BETWEEN MARXIQAN VALUES AND COMPETITIVE PRICESs" (Journal of Economic Literature 9 2 399–431.1971). In his paper, Samuelson championed Bortkiewicz’s original neo-classical “critique” and “correction” against Marx telling students to forget Marx’s method and instead adopt “the tools of bourgeois economics” (Kliman p. 48).

If Bortkiewicz had allegedly killed off Marx’s critique of political economy and Samuelson had rung the death knell then the earth used to fill-in the grave of Marx’s Labour Theory of Value was the work of the Japanese economist Nobuo Okishio’s whose “Fundamental Marxian theorem” claimed, in a series of sophisticated mathematical proofs, that the relationship between Marx’s theory of the organic composition of capital (the ratio of constant capital to variable capital) and the falling rate of profit was both incoherent and unsound. Marx’s account of the origin of social wealth, the explanation of poverty and the economic laws causing periodic economic crises, according to his critics, were no longer a viable critique of capitalism (N. Okishio, A Mathematical Note on Marxian Theorems, Three Topics on Marxian Fundamental Theorem and Value and Production Price in ESSAYS ON POLITICAL ECONOMY: COLLECTED PAPERS 1993).

As a consequence, leader writers in the FINANCIAL TIMES, like the free-market economist, Martin Sandbu, just routinely dismiss the labour theory of value out of hand as “erroneous” without the need for any explanation as though Marx was well and truly dead and buried when it came to any theoretical understanding of capitalism (So conflicts at the core of Marxist criticism can be amenable to simple trade-of, 3rd April 2014).

This misplaced optimism that Marx’s labour theory of value is dead and buried has well and truly refuted with the publication of Andrew Kliman’s book RECLAIMING MARX: A REFUTATION OF THE MYTH OF INCONSISTENCY.

The usefulness of Kliman’s book, is that he shows that the values and prices of Marx’s solution to the “transformation problem” are determined interdependently and so there is no inconsistency (chapter 6), that Okishio’s theorem is invalid because it values inputs and outputs simultaneously (chapter 7) and, for the same reason von Bortkiewicz’s criticism of Marx is flawed because he valued input and outputs simultaneously which is alien to Marx’s own method adopted in CAPITAL. Eugene Böhm-Bawerk is also criticised for misreading Marx’s careful step- by- step account of the transformation of value into prices of production while mis-quoting Marx out of context to suit his own political end. Bohm-Bawerk also misunderstood both Marx’s method and presentation of his critique not realising that Marx was well aware in volume I of CAPITAL that commodities did not sell at their values something Rudolph Hilferding pointed out in his response to Bohn-Bawerk some six years later in 1904 (see chapter 8 pp 144 to 146).

More importantly, for reclaiming Marx from his critics, Kliman states that Marx’s three aggregate value-price equalities hold:

* Total profits equals total surplus value

* Total price equals total value

* The aggregate “price” rate of profit equals the aggregate “value” rate of profit (p. 144).

From the above the exploitation of the working class is the exclusive source of profit Despite books by the likes of Andrew Kliman, Marx will still be fair game. He frightens to death the capitalist class, its politicians and academics. They will not leave him alone. In this Socialists can take some comfort. Yet Kliman’s book is also a warning from history. The books and papers published in the 20th century by Marx’s worst but usually more influential critics have not been stamped with the warning “Bourgeois economics” but with the totally inappropriate and bogus brand: “Marxism”.

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Object and Declaration of Principles


The establishment of a system of society based upon the common ownership and democratic control of the means and instruments for producing and distributing wealth by and in the interest of the whole community.

Declaration of Principles


1. That society as at present constituted is based upon the ownership of the means of living (ie land, factories, railways, etc.) by the capitalist or master class, and the consequent enslavement of the working class, by whose labour alone wealth is produced.

2. That in society, therefore, there is an antagonism of interests, manifesting itself as a class struggle, between those who possess but do not produce and those who produce but do not possess.

3.That this antagonism can be abolished only by the emancipation of the working class from the domination of the master class, by the conversion into common property of society of the means of production and distribution, and their democratic control by the whole people.

4. That as in the order of social evolution the working class is the last class to achieve its freedom, the emancipation of the working class will involve the emancipation of all mankind without distinction of race or sex.

5. That this emancipation must be the work of the working class itself.

6. That as the machinery of government, including the armed forces of the nation, exists only to conserve the monopoly by the capitalist class of the wealth taken from the workers, the working class must organise consciously and politically for the conquest of the powers of government, national and local, in order that this machinery, including these forces, may be converted from an instrument of oppression into the agent of emancipation and the overthrow of privilege, aristocratic and plutocratic.

7. That as all political parties are but the expression of class interests, and as the interest of the working class is diametrically opposed to the interests of all sections of the master class, the party seeking working class emancipation must be hostile to every other party.

8. The Socialist Party of Great Britain, therefore, enters the field of political action determined to wage war against all other political parties, whether alleged labour or avowedly capitalist, and calls upon the members of the working class of this country to muster under its banner to the end that a speedy termination may be wrought to the system which deprives them of the fruits of their labour, and that poverty may give place to comfort, privilege to equality, and slavery to freedom.