This is another post for my commonplace book. It is extraordinary difficult to get a rational explanation for the marginal revolution. Trying to imitate nineteenth-century physics seems to be part of it.
"Marx implicitly assumes the the whole of social reproduction is mediated through the exchange of commodities, including the reproduction of labor power, that is, the reproduction of people themselves. We can view the labor that produces what productive workers consume as the labor necessary for the reproduction of society and the labor that capitalists appropriate in the form of surplus value as the surplus labor time of society, in the sense that only the necessary labor time would be required to enable reproduction of people and productive facilities on the same scale. Thus the wage-labor mechanism allows capitalists as a class to appropriate the surplus labor time of the society without giving the workers as a class any equivalent.
A situation in which one person gives another something for which the giver receives no equivalent is commonly called exploitation. Because this is exactly the situation in capitalist production, Marx argues that, from the point of view of the labor theory of value, the source of surplus value lies in the exploitation of labor.
If you do not accept the postulate that labor produces the whole value added, you will not see much basis for the claim that wage-labor is exploitative. I think this is the main reason that the labor theory of value has fallen into disrepute among orthodox economists. To avoid the characterization of capitalist social relations as exploitative requires the construction of some other theory of value that makes the wage seem to be a complete social equivalent for the labor that workers actually perform." -- Duncan Foley, Understanding Capital: Marx's Economic Theory, Harvard University Press, 1986: 38-39.
Oscar Lange is an example of a marginalist economist who was also a socialist.
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2 comments:
There is no evidence to support the notion that marginalism was a reaction to Marx, as far as I am aware. They don't mention him.
A case could be made that marginalism was a reaction to socialism -- as socialism does not equal Marxism nor does Marxism equal socialism.
So the idea that workers created wealth and should receive the full value (or product, not quite the same thing) of their labour had been around since the 1820s if not before. The so-called Ricardian socialists were known of by John Stuart Mill, who also discussed French socialists. So these ideas would have been known. In addition, Léon Walras was well aware of Proudhon and wrote a book against him.
That marginalism was helpful in combating socialist ideas undoubtedly partly explains its growth -- basic notions of supply and demand would suggest that a demand for apologetics for the rich would soon produce a supply. And wealthy benefactors to universes did fund marginalist economics.
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I think the argument is more that what made marginalism accepted in, say, the 1890s, is a reaction to Marx. It is not about what the initial marginalists said in their works in the 1870s.
I have heard Henry George also brought up in this context. I had not known about Walras writing in opposition to Proudhon. I had known that he considered himself a 'scientific socialist', in quite a different sense than Marx.
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