Marx and Engels Collected Works

Several editions have been published of the works of Marx and Engels. One can also look in the Marxists Internet Archive. Many individual works have been published in various translations in various places. Marx's manuscripts ended up in the Institute of Social History (ISH), in Amsterdam.

A first attempt was started in 1927, the first Marx-Engels Gesamtausgabe (MEGA), in which the works were to be published in their original languages. This project was never completed. David Riazanov, the first editor, was shot in 1938, after the usual show trial. The Institute of Marxism-Leninism of the Communist Party of the Soviet Union (CPSU) sponsored a Russian edition, published from 1928 through 1947. A second Russian edition was begun in 1955. It contains 47 books, with some volumes published across more than one book.

Activity by the Institute of Marxism-Leninism of the Socialist Unity Party (SUP), that is, the communist party of the German Democratic Republic, in Berlin, led to the publication of the Marx-Engels Werke (MEW). The MEW contains 44 books, and its publication began in 1956.

Progress Publishers, in Moscow, issued English translations of at least some of the work of Marx and Engels. Some, but not all, translations were based on the MEW. For example, Volume 1 of Capital in this series is the English edition of 1887, translated by Samuel Moore and Edward Aveling and edited by Engels.

The Marx-Engels Collected Works (MECW) consists of 50 volumes, in an english translation. It was published from 1975 to 2004. It is published by Lawrence & Wishart in London and International Publishers Company in New York. The MECW was the result of collaboration among the communist parties of Great Britain and the United States, the Institute of Marxism-Leninism of the CPSU and of Progress Publishers. The Institute of Marxism-Leninism of the SUP assisted. Lawrence & Wishart made an online version available in 2010. See also here.

The second Marx-Engels Gesamtausgabe (MEGA) is planned to contain 114 volumes. The works are in their original languages, show variations among various editions, and include commentary. The second MEGA edition was begun in 1975 by the SUP, in Berlin, and the Institute of Marxism-Leninism of the CPSU, in Moscow. The Internationale Marx-Engels-Stiftung, in Amsterdam took over sponsorship after 1989.

Tables 1, 2, and 3 list works in the MECW by Marx, by Marx and Engels, and by Engels, respectively. I do not list newspaper articles, letters, and speeches that were not published separately. Some of the unlisted newspaper articles, such as coverage of a trial of communists in Cologne, are as lengthy as some of the listed works. And Marx's work on the First International are important to a history of socialism. Furthermore, there are manuscripts by Marx, such as an essay on calculus, which are of interest to a consideration of the full range of his work and are not included in the MECW. Nevertheless, these tables contain the most widely discussed works by Marx and Engels, even though some were not published until well into the twentieth century.

Table 1: Selected Works by Marx

Title	Written	Published	Translated	MECW
Difference between the Democritean and Epicurean philosophy of nature (doctoral dissertation)	1840-1841	1902	1946	1
Contribution to the Critique of Hegel's Philosophy of Law	1843	1927	1970	3
On the Jewish Question	1843	1843	1926	3
Economic and Philosophic Manuscripts of 1844 (The Paris Manuscripts)	1844	1932	1959	3
Theses on Feuerbach	1845	1888	1938	5
The Poverty of Philosophy	1847	1847	1900	6
Wage-Labour and Capital	1849	1849	1891	9
The Eighteenth Brumaire of Louis Bonaparte	1852	1852	1897	11
Grundrisse der Kritik der Politischen Okonomie (Outlines of the Critique of Political Economy)	1858	1939-1941	1973	28-29
A Contribution to the Critique of Political Economy: Part One	1859	1859	1904	29
Herr Vogt	1860	1860		17
Theories of Surplus Value, Part 1	1861-1863	1905-1910		30, 31, 34
Theories of Surplus Value, Part 2	1861-1863	1905-1910		31
Theories of Surplus Value, Part 3	1861-1863	1905-1910		32, 33
Economic Manuscript of 1861-1863	1861-1863			30-34
Value, Price and Profit	1865	1898	1898	20
Capital, V. 1	1863-1867	1867	1887	35
Capital, V. 2	1865-1881	1885	1907	36
Capital, V. 3	1864-1866	1894	1909	37
The Civil War in France	1871	1871	1871	22
Critique of the Gotha Programme	1875	1891	1891	24

Table 2: Selected Works by Marx and Engels

Title	Written	Published	Translated	MECW
The Holy Family, or Critique of Critical Criticism: Against Bruno Bauer and Company	1844	1845	1956	4
The German Ideology	1846	1932	1964	5
The Communist Manifesto	1848	1848	1850	6

Table 2: Selected Works by Engels

Title	Written	Published	Translated	MECW
Outlines of a Critique of Political Economy	1843	1843	1959	3
The Condition of the Working Class in England	1845	1845	1887	4
The Peasant War in Germany	1850	1850	1870?, 1875?	10
Revolution and Counterrevolution in Germany	1852	1852	1852	11
Herr Duhring's Revolution in Science (Anti-Duhring)	1878	1878	1907	25
Socialism: Utopian and Scientific	1880	1880	1891	24
Dialectics of Nature	1882	1925	1985?	25
The Origin of the Family	1884	1884	1902	26
Ludwig Feuerbach and the End of Classical German Philosophy	1886	1886	1903	26

These editions of the collected works produced some surprises. The 1844 manuscripts inspired an anti-Stalinist literature, based on a young Marx. Under this reading, Marx was at first a humanist, concerned with overcoming alienation. On the other hand, Althusser agreed that a break existed in Marx's thought, but preferred the later Marx. The Grundrisse seems like a challenge to these views. I had not previously known that Theories of Surplus Value was part of a larger manuscript. The second MEGA, as Heinrich (2021) notes, reveals surprising changes in the opening chapters of Capital, destabilizing established readings. Interpretations in the twentieth century are entangled with political struggles among socialists, communists, and others.

'The' Labor Theory of Value

1.0 Introduction

This post argues that there is more than one labor theory of value.

2.0 The Labor Theory of Property

John Locke argued that what one mixes one labor with, one has a right to own. One could read Marx's Capital as a reductio ad absurdum of this labor theory of property. I disagree with this reading.

3.0 Labor Commanded as a Theory of Welfare

Given a unit of money - one dollar or one british pound - the labor commanded by that money is the amount of person-years of labor you can hire with that money. This quantity of the labor is the reciprocal of the wage. The following quotation from Adam Smith, I assert, is NOT a statement of a theory of value:

"The real price of everything, what everything really costs to the man who wants to acquire it, is the toil and trouble of acquiring it. What everything is really worth to the man who has acquired it, and who wants to dispose of it or exchange it for something else, is the toil and trouble which it can save to himself, and which it can impose upon other people. What is bought with money or with goods is purchased by labour as much as what we acquire by the toil of our own body. That money or those goods indeed save us this toil. They contain the value of a certain quantity of labour which we exchange for what is supposed at the time to contain the value of an equal quantity. Labour was the first price, the original purchase-money that was paid for all things. It was not by gold or by silver, but by labour, that all the wealth of the world was originally purchased; and its value, to those who possess it, and who want to exchange it for some new productions, is precisely equal to the quantity of labour which it can enable them to purchase or command." -- Wealth of Nations, Book 1, Chapter 5: Of the real and nominal price of commodities, or their price in labour, and their price in money.

Smith is interested in a measure of wealth. The money price varies too much for this purpose. I do not recall why Smith rejects the price of corn, that is, the price for the most common food of the people. I think he finds it also quite variable.

4.0 Labor Embodied as Natural Prices

Adam Smith, however, does has a labor theory of value. He states:

"In that early and rude state of society which precedes both the accumulation of stock and the appropriation of land, the proportion between the quantities of labour necessary for acquiring different objects seems to be the only circumstance which can afford any rule for exchanging them for one another. If among a nation of hunters, for example, it usually costs twice the labour to kill a beaver which it does to kill a deer, one beaver should naturally exchange for or be worth two deer. It is natural that what is usually the produce of two days or two hours labour, should be worth double of what is usually the produce of one day's or one hour's labour." -- Wealth of Nations, Book 1, Chapter 6: Of the component parts of the price of commodities.

This labor theory of value only holds for an imaginary pre-historic society with no private property. Under capitalism, the labor commanded by a commodity exceeds the labor embodied in it, the latter being what is most commonly meant by the labor value of a commodity. One can read Smith as asserting that the profits on stock and the rent of land result from the exploitation of workers. Profits and rent are the result of value added by workers not paid out in wages.

5.0 The Ricardian Socialists

John Francis Bray, John Gray, Charles Hall, Thomas Hodgskin, 'Piercy Ravenstone', William Thompson, and others are known as the Ricardian socialists. Thompson (2002) argues that they drew more on Smith than Ricardo. Generally, they read Smith as explaining the returns to capital and land as a matter of exploitation and took the labor theory of value as a normative theory about what prices should be.

Accordingly, they advocated reforms to get rid of parasitical returns to capital and land. Some suggested the founding of banks that would issue labor notes. I think this idea was advocated not only so that the worker would get the full value of their product, but had something to do with abolishing the instability seen in economic crashes and business cycles. Some actually founded banks and volutary communities to implement these ideas. Nearby here, Ithaca has HOURs as labor notes. I have seen stores that say they accept them, but have never seen one.

Karl Marx rejected the claim that workers had a right to the whole product of their labor. This was a point that Marx raised against Ferdinand Lasalle, as well as against the Ricardian socialists.

6.0 Ricardo and a Simple Labor Theory of Value

Ricardo presented a simple labor theory of value as a descriptive theory of prices in a capitalist economy. He takes the distinction between market prices and 'natural' prices from Smith, ultimately, I guess, from William Petty. Market prices tend to and bob around natural prices, also known as prices of production. Suppose the whole distribution over time of the labor inputs used to manufacture two commodities is the same. Then the ratio of their prices of production will, indeed, be the ratio of their labor values.

But Ricardo immediately considers, in later parts of the first chapter of his Principles what happens when, say, the ratio of fixed capital and circulating capital varies among the methods with which commodities are produced. And he realizes that a simple labor theory of value cannot be exactly true. This is why Ricardo is sometimes described as having a 93 percent labor theory of value. He does not think land presents a fatal complication. One can calculate embodied labor values on marginal land that pays no rent. He searches for an 'invariable standard' which he ultimately decides is best approximated by a commodity of average capital intensity.

James Mill, Jane Marcet, John Ramsay McCulloch, Harriet Martineau, Robert Torrens, and J. S. Mill followed, popularized, and built on Ricardo Some have claimed that such followers of Ricardo had a confused understanding of Ricardo's theory of value.

7.0 Marx, a Simple Labor Theory of Value in Volume 1, and the Volume 3 Invariants

Marx was appreciative of Ricardo. But Marx says that Ricardo does not examine the value-form. Ricardo, according to Marx, does not analyze the preconditions of capitalism, for example, how it is that workers are available to be hired for money, how their labor-power is available on the market as a commodity.

Not only did Marx criticize Ricardo for ignoring the distinction between labor-power and labor. The labor value of labor is a meaningless phrase. Marx also argued that Ricardo was not able to abstract interest on money, profits on capital, and rent on land into the generalization of surplus value. Ricardo has a distinction between fixed and circulating capital, but cannot see Marx's distinction between constant and variable capital. So Ricardo has no notion of the organic composition of capital. Ricardo's theory of value and distribution, like Marx's does not need the imposition of Say's law. According to King (1983) precursors for all these notions can be found in the works of the Ricardian socialists.

Marx, in volume 1 of Capital, considers how labor must be distributed among industries to sustain production in a commodity-producing economy. He focuses on how surplus value is generated when labor-power is a commodity bought and sold on a labor market. For these purposes, he adopts a simple labor theory of value. Market prices tend towards ratios in the proportion of embodied labor values.

In volume 3, Marx depicts value as generated as in volume 1, but redistributed among industries. Prices of production are such that the same rate of profits is obtained in all industries. He asserts the rate of profits is the same in the value system and in the system of prices of production. Furthermore, total profits is supposedly equal to total surplus value, and total values are equal to total prices. These invariants hold in the production of a commodity of average organic composition of capital, in some sense.

In later chapters in Volume 3, Marx proceeds to an even lower level of abstraction. He considers different types of rent and financial capital.

8.0 Conclusion

These theories present opportunities for confusion and muddle, for talking past one another. Does Smith have a labor theory of value? Ricardo? Marx? Is a labor theory of value supposed to be a measure of wealth, a descriptive theory for prices in a capitalist economy, or a theory of economic planning in a post-capitalist society? And then, of course, some are ignorant and of bad faith. And those who have their own, but different, interpretations of the transformation problem, can get into honest argument.

References

• J. E. King. 1983. Utopian or scientific? A reconsideration of the Ricardian Socialists. History of Political Economy 15(3): 345-373.
• Anton Menger. 1899. The Right to the Whole Produce of Labour: The Origin and Development of the Theory of Labour's Claim to the Whole Product of Industry.
• Noel W. Thompson. 2002. The People's Science: The Popular Political Economy of Exploitation and Crisis 1816-34. Cambridge University Press.

What Is Leninism?

Table 1: Selected Events

1853 - 1856	Crimean war.
1861	Emanicpation of the serfs under Alexander II.
1877 - 1878	Russo-Turkisk war.
1881	Alexander II assassinated by a Narodnik conspiracy.
1883	Plekhanov founds Emancipation of Labor Group, struggles against Narodniks.
1898	Russian Social Democratic Labor Party founded, first congress.
1900 - 1901	First publications of Iskra, an all-Russian underground newspaper for the RSDLP.
1902	Lenin publishes What is to be done?
1903	Second party congress of RSDLP, splits into Bolsheviks and Mensheviks.
1904 - 1905	Russo-Japanese War
1905	Russian revolution (failed).
1906	First election to the Duma.
1914	Start of Worl War I, with assassination on 28 June of Archduke Franz Ferdinand.
5 to 8 September 1915	Zimmerwald conference.
February (old style) 1917	Revolution, Nicholas adbicates. Provisional government formed.
April (old style) 1917	Lenin and companions arrive through Germany in sealed car; publishes April Theses.
June? 1917	First congress of soviets
August (old style) 1917	Failed Kornilov coup attempt.
October (old style) 1917	Bolshevik revolution.
October (old style) 1917	Second congress of soviets.
1917 - 1923	Russian civil war
March 1918	Brest-Litovsk Treaty.
11 November 1918	Armistice day.
5 to 12 January 1919	Spartacist Revolution.
2 to 6 March 1919	Founding of Communist International (Third International) at congress in Moscow.
21 March to 1 August 1919	Hungarian Soviet Repulbic.
28 June 1919	Signing of Treaty of Versailles.
27 February 1921	Founding of International Union of Socialist Parties (Second and One-Half International).
March 1921	Kronstadt Rebellion.
1921	New Economic Policy replaces War Communism.
May 1922	Lenin's first stroke
December 1922	Formation of the Union of Soviet Socialist Republics (USSR)
21 January 1924	Lenin dies.

1.0 Introduction

A prior question is when did Leninism become a recognized tendency? Presumably, it was not immediately with the 1902 publication of What Is To Be Done? But certainly by the year of his death, as can be seen in Stalin's lectures, delivered at Sverdlov University in April 1924. I think 'Leninism' or 'Marxism-Leninism' became a name in the early 1920s.

2.0 A Definition and Remarks on Russia's Backwardness

Stalin defines Leninism:

"Leninism is Marxism of the era of imperialism and of the proletarian revolution. To be more exact, Leninism is the theory and tactics of the proletarian revolution in general, the theory and tactics of the dictatorship of the proletariat in particular."

Several scholars in the second international had provided analyses of imperialism, trusts, and finance capital. Lenin was not even the only Bolshevik to write extensively about imperialism; Bukharin also had a book.

The theory of imperialism provided a justifaction for why the first socialist revolution need not occur in the most advanced, industrialized capitalist country. Capitalism became a global system, including colonies. A revolution outside the metropole could be a strike at the weakest link.

Others knew that, according to classical Marxism, the proletariat revolution was supposed to first happen in advanced capitalist economies. Here is a bit from Gramsci, before he was the leader of the Italian Communist Party:

"That is what happens under normal conditions. When events are repeated with a certain regularity. When history develops through stages which, though ever more complex and richer in significance and value, are nevertheless similar. But in Russia the war galvanized the people's will. As a result of the sufferings accumulated over three years, their will became as one almost overnight. Famine was imminent, and hunger, death from hunger, could claim anyone, could crush tens of millions of men at one stroke. Mechanically at first, then actively and consciously after the first revolution, the people's will became as one.

Socialist propaganda put the Russian people in contact with the experience of other proletariats. Socialist propaganda could bring the history of the proletariat dramatically to life in a moment: its struggles against capitalism, the lengthy series of efforts required to emancipate it completely from the chains of servility that made it so abject and to allow it to forge a new consciouness and become a testimony to a world yet to come. It was socialist propaganda that forged the will of the Russian people. Why should they wait for the history of England to be repeated in Russia, for the bourgeoise to arise, for the class struggle to begin, so that class consciousness may be formed and the final ctastrophe of the capitalist world eventually hit them? The Russian people - or at lest a minority of the Russian people - has already passed through these experiences in thought. It has gone beyond them. It will make use of them now to assert itself just as it will make use of Western capitalist experience to bring itself rapidly to the same level of production as the Western world. In capitalist terms, North America is more advanced than England, because the Anglo-Saxons in North America took off at once from the level England had reached only after long evolution. Now the Russian proletariat, socialistically educated, will begin its history at the highest level England has reached today. Since it has to start from scratch, it will start from what has been perfected elsewhere, and hence will be driven to achieve that level of economic maturity which Marx considered a necessary condition for collectivism..." -- Antonio Gramsci, The revolution against Capital, 24 December 1917.

I think this points to a recurring tension in anti-colonial struggles. Should socialists support bourgeois and liberal positions and rebellions, without an immediate proletarian government conducting socialist planning?

3.0 The Start of Marxism in Russia

Plekhanov introduced Marxism to Russia. His 1891 book argues against the Narodniks, who were intellectuals championing the peasants, only recently freed from serfdom. Later, the Socialist Revolutionaries was a party championing the peasants. Some Left Socialist Revolutionaries entered the government after the October revolution. But Marxists like Plekhanov championed the working class. The peasants, although numerically superior, could only be allies.

Here I should mention that this history is mostly a history of illegal movements. Many of those important in the struggles leading up to the October revolution spent time in internal exile, in Siberia, or in external exile. Conferences and congresses were held outside Russia. Legal publications used 'Aesopian' language. Nevertheless, legal Marxism was a movement in Russia in the 1890s, with Pyotr Struve and Mikhail Tugan-Baranovsky as the most prominent members.

4.0 A Vanguard Party, What is to be Done, and the Founding of Iskra

I think an important component of Leninism as the orgainization of a revolutionary party, as specified in his 1902 pamplet, What is to be done? Like the overwhelming majority of Lenin's major works, he spends a lot of time arguing against other comrades, often with personal remarks. Here his target is 'economism', the idea that socialists should concentrate on strikes and organizing industrial sites, trying to increase pay, decrease hours, and improve working conditions.

Lenin argued that social democrats should agitate on all fronts. This comprehensiveness seems to fit his personality, where he devoted his life to being a professional revolutionary. He was capable of dropping somebody after decades of friendship if that person was advocating something important he disagreed with. His arguments extended to the philosophy of science, as was being impacted by, say, the theory of relativity.

Trade unions can only bring trade union consciousness, according to Lenin. What is needed is a vanguard, a party with close connections to the workers that brings a social-democratic consciouesness.

Lukúcs, in his essay, 'Towards a methodology of the problem of organisation' (September 1922), discusses the "dialectical relation between 'final goal' and 'movement', i.e. between theory and practice." "Organisation is the form of the mediation between theory and practice." "The Communist Party is the organised form of - the first conscious step towards the realm of freedom." "The process of revolution is - on a historical scale - synonymous with the process of the development of proletarian class consciousness." The communist party is supposed to be an objective expression of the most advanced class consciousness of the workers, not a replacement. Communists need to pay close attention to all strata in the working class. The workers are supposed to be no longer be merely the object of history, but its subject as well. In his essay 'Class consciousness', Lukúcs writes "For a class to be ripe for hegemony means that its interests and consciousness enable it to organise the whole of society in accordance with those interests." In his book, he also discusses vulgar Marxism, which is deterministic.

As an immediate task, Lenin argued for the publication of an all-Russian newspaper, Iskra.

5.0 The Split at the Second Congress of the RSDLP and Democratic Centralism

The start of a major split in the Russian Social Democratic Labor Party arose at the second party congress, held initially in 1903 in exile in Brussels. Participants included representatives of the editorial board of Iskra; Makhov, representing two votes of the Nikolayev Committee; the Bund (Jewish Workers' Union); and Rabocheye Dyelo, which was a newspaper for social democrats in exile.

The split was ostensibly focused on paragraph 1 of the party rules. Lenin's draft had the following:

"A member of the Party is one who accepts its programme and who supports the Party both financially and by personal participation in one of the Party organisations."

Paragraph 1 as formulated by Julius Martov at the Congress and adopted by the Congress stated:

A member of the Russian Social-Democratic Labour Party is one who accepts its programme, supports the Party financially, and renders it regular personal assistance under the direction of one of its organisations.

Lenin wanted a tighter focus on professional revolutionaries, and this goes along with his concept of democratic centralism. At party congresses and meetings of the central committee, there should be the freest discussion. Once a vote has been conducted, all groups and circles, organizations and members of the party are expected to follow the direction decided upon. Martov's formulation was much looser. As Lenin put it, any professor or striker could call themselves a party member, despite not being bound by party discipline or working with a party organization.

Even though Martov prevailed on paragraph 1, he and his Mensheviks ended up in the minority. Apparently, Bolshevik means 'majority' in Russian, and Menshevik means 'minority'. Lenin was in the majority only because the Bund and the Rabocheye Dyelo group walked out. Plekhanov and Trotsky sided with Lenin at the Second Congress. But Plekhanov soon joined the Mensheviks, and Trotsky went his own way until rejoining the Bolsheviks in 1917. As late as spring 1906, an attempt at re-unification was tried at an unity congress of the RSDLP. The Mensheviks were in the provisional government formed in the February 1917 revolution, but not in the soviet government established in the October revolution.

6.0 The 1917 Russian Revolutions

The Tsar abdicated in the February revolution. The parliamentary government found themselves in charge as the provisional government. Kerensky eventually became prime minister. Political parties included the constitutional democrats (Cadets), Mensheviks, and the Socialists Revolutionaries. The SRs followed in the tradition of the Narodniks, without the terrorism. Some Left Socialists Revolutionaries joined the government established by the October revolution, since the Bolsheviks was implementing the SR agrarian program.

The soviets constituted a parallel government. A soviet is a council, perhaps for a village, a regiment, or a factory. Such soviets elected delegates to a regional soviet which, in turn, elected delegates to a more wide-ranging body, eventually to a national soviet. The Petrograd and other soviets sprang up during the 1905 revolution. The members were promptly arrested when that revolution failed. In Lenin's April theses, he implicitly draws some parallels to the Parisian communards, which Engels famously declared to be what the dictatorship of the proletariat looks like. Lenin also called for the Bolshevik party to change their name to the Communist Party and for the establishment of a new international, the Communist International (Comintern).

7.0 The Revolutionary Government

Leon Trotsky was the chairman of the Petrograd soviet, which set up the Military Revolutionary Committee. Petrograd was the Russian capital at the time. The October Revolution occurred when the Military Revolutionary Committee took over key sites in Petrograd, including the Winter Palace, and arrested the members of the provisional government. Moscow had its own uprising.

The Second Congress of Soviets met, with 670 delegates, as the October revolution unfolded. They needed some smaller sort of body to act as an executive. That would be the Council of People's Commissars, and that was the new soviet government. Lenin was its chairman. Other members included Trotsky, Anatoly Lunacharsky, and Stalin. The congress proclaimed the revolution:

"TO WORKERS, SOLDIERS, AND PEASANTS

The Second All-Russian Congress of Soviets of Workers' and Soldiers' Deputies has opened. It represents the great majority of the Soviets. There are also a number of Peasant deputies. Based upon the will of the great majority of the workers, soldiers, and peasants, based upon the triumphant uprising of the Petrograd workmen and soldiers, the Congress assumes power.

The Provisional Government is deposed. Most of the members of the Provisional Government are already arrested.

The Soviet authority will at once propose an immediate democratic peace to all nations, and an immediate truce on all fronts. It will assure the free transfer of landlord, crown, and monastery lands to the Land Committees, defend the soldiers' rights, enforcing a complete democratization of the Army, establish workers' control over production, ensure the convocation of the Constituent Assembly at the proper date, take means to supply bread to the cities and articles of the first necessity to the villages, and secure to all nationalities living in Russia a real right to independent existence.

The Congress resolves: that all local power shall be transferred to the Soviets of Workers', Soldiers', and Peasants' Deputies, which must enforce revolutionary order.

The Congress calls upon the soldiers in the trenches to be watchful and steadfast. The Congress of Soviets is sure that the revolutionary Army will know how to defend the Revolution against all attacks of Imperialism, until the new Government shall have brought about the conclusion of the democratic peace which it will directly propose to all nations. The new Government will take all necessary steps to secure everything useful to the revolutionary Army, by means of a determined policy of requisition and taxation of the propertied classes, and also to improve the situation of the soldiers' families.

The Kornilovtsi-Kerensky, Kaledin, and others, are endeavoring to lead troops against Petrograd. Several regiments, deceived by Kerensky, have sided with the insurgent People.

Soldiers! Make active resistance to the Kornilovets-Kerensky! Be on guard!

Railway men! Stop all troop-trains being sent by Kerensky against Petrograd!

Soldiers, Workers, Clerical employees! The destiny of the Revolution and democratic peace is in your hands!

Long live the Revolution!

The All-Russian Congress of Soviets of Workers' and Soldiers' Deputies Delegates from the Peasants' Soviets"

The Constituent Assembly met on 5 January 1918. Its dissolution was justified by the claim that its election was based on ballots drawn up before the October revolution and thus outdated, not reflecting the split between the Socialists Revolutionaries and the Left Socialists Revolutionaries.

8.0 Lenin's Influence on How to Read Marx

Above, I have not said much about Marx at all. I suppose I would find something about political economy in Lenin's 1899 book, The Development of Capitalism in Russia.

In his 1913 pamphlet, The Three Sources and Three Component Parts of Marxism, Lenin says that the three sources of Marxism are German philosophy, English political economy, and French socialism. I do not know how influential this claim was; the first two sources are obvious. I would like to emphasize so-called Ricardian socialists, who were not French, for the last source. Nevertheless, Marx and Engels were part of a socialist movement that predated them.

Somewhere, probably in notes not published in his lifetime, Lenin says that you cannot understand Marx's Capital if you have not read Hegel's Logic. I do not like Hegel. I have read a bit of Christopher Arthur.

I suppose I am not the only one to read Marx's Remarks on the Gotha Program with Lenin's State and Revolution in mind, and vice versa.

9.0 Conclusion

Elements of Leninism include a workers' vanguard party, democratic centralism an alliance with peasants in anti-imperialist struggles,and a government of soviets dominated by the communist party.

References

• Christopher Hill. 1971 (1947). Lenin and the Russian Revolution. Penguin Books.
• Leszek Kolakowski. . Main Currents of Marxism (3 volumes). New York: W. W. Norton.
• Vladimir Lenin. 1902. What is to be done? Collected Works: Vol. 5
• Vladimir Lenin. 1904. One step forward, two steps back. Collected Works: Vol. 7
• Vladimir Lenin. 1908. Materialism and empirio-criticism. Collected Works: Vol. 14
• Vladimir Lenin. 1914 - 1916. Conspectus of Hegel's book The Science of Logic. Collected Works: Vol. 38
• Vladimir Lenin. 1917a. Imperialism, the highest stage of capitalism. Collected Works: Vol. 22
• Vladimir Lenin. 1917b. The tasks of the proletariat in the present revolution ('April Theses'). Collected Works: Vol. 24
• Vladimir Lenin. 1918. The state and revolution. Collected Works: Vol. 25
• Vladimir Lenin. 1920. 'Left-wing' communism: an infantile disorder. Collected Works: Vol. 31
• Georg Lúkacs. 1971. History and Class Consciousness: Studies in Marxist Dialectics. Merlin Press.
• Julius Martov. 1938. The State and Socialist Revolution.
• Georgi Plekhanov. 1891. The Materialist Conception of History.
• John Reed. 1966 (1919). Ten Days that Shook the World. Penguin Books.
• Joseph Stalin. 1945. The foundations of Leninism, in Problems of Leninism. Moscow: Foreign Languages Publishing House.

Elsewhere

• Guido Lorenzoni and Ivan Werning. Inflation is Conflict. Bob Rowthorn is referenced, as he should be.
• Frederick Guy and Peter Skott. 2005. Power-Biased Technical Change and the Rise in Earnings Inequality. The references on twitter must be to something more recent.
• Seth Ackerman interview with James Forder, about the myths economists believe about the Philipps curve and 1970s stagflation.
• Cybersocialist planning. This Jacobin article talks about Ian Wright's work among others.
• Matt Zwolinski and John Tomasi. 2023. The Individualists: Radical, Reactionaries, and the Struggle for the Soul of Libertarianism. Princeton University Press.
• Deepankar Basu. 2022. The Logic of Capital: An Introduction to Marxist Economic Theory. Cambridge University Press.

On Marginal Productivity: Some Propositions Of Price Theory

In mainstream economics, marginal productivity does not determine distribution. Furthermore, every correct proposition of marginal productivity theory is consistent, under competitive conditions, with Marx's claim that workers are exploited by capitalists.

Assume technology is given, the economy is in a stationary state, and one knows what technique is chosen. (Ludwig von Mises called a stationary state an 'evenly rotating economy'.) The technique consists of a list of the physical inputs and outputs in each industry in which a commodity is produced. Following convention, I call such a list in a given industry, a process. I assume the chosen technique is cost-minimizing. Furthermore, inputs are themselves produced commodities, with the exception of (types of) labor and land.

Under the assumptions of, say, certain models of circulating capital, pure fixed capital, or extensive rent, the cost-minimizing technique is a function of the real wage. One can generalize the model, to have multiple types of labor inputs, say 'unskilled' and 'skilled' labor. And the prices of all commodities are functions of the wage, as well.

I like a discrete description of technology. For each industry, the processes for producing the output commodity can be described by a production function that approximates a continuously differentiable production function. The value of the marginal product of labor is not found by multiplying the price of the output commodity by the derivative of the production function. Rather, it is, at least at non-switch points, formed out of an interval bounded by right hand and left hand derivatives of the production function. And the wage is equal to the marginal product of labor in these models in this sense; it lies within the appropriate bounds.

In an example of the reswitching of techniques, the same cost-minimizing technique can be cost-minimizing for two non-overlapping intervals of wages. In both intervals, the real wage is equal to the marginal product of labor in the above sense. Yet the same physical flows of inputs and outputs between industries and to consumers can be consistent with these ranges. Workers might not get higher wages because they have raised their (marginal) productivity in some physical sense. Rather, through some sort of class struggle they have won higher wages. And this may result in a tendency for the economy to approach a steady state where these higher wages are consistent with the same marginal physical products.

One can do labor-value accounting with the cost-minimizing technique. Given that technique, what would prices be if the wage was at its maximum, where capital does not obtain any accounting profits? These are labor values. In Leontief input-output analysis, they are also known as employment multiplers. One can evaluate the value of the capital goods used up in production with these labor values. Likewise, one can calculate the labor value of the commodities represented by the wage and by the surplus product obtained by capitalists. If and only if the wage is less than its maximum, the labor value of the net output is more than the labor value represented by wages. This is exploitation, as Marx defined it. And it obtains in these sort of models as a matter of mathematics; Nobuo Okishio christened this the fundamental theorem of Marxism.

Why Did Marx Advocate Socialism?

1.0 Introduction

I find the question in the title of this post hard to answer. I should probably say something about secondary literature, which I do not consider myself well-informed on. For purposes of this post, I ignore distinctions between socialism and communism.

2.0 Marx Wanted To Implement An Utopian Vision Of A Post-Capitalist Society

You will sometimes find reactionaries assert that wherever Marxism was implemented, the government killed tens of millions. They are too ignorant to know that the phrase ‘implement Marxism’ might be meaningless. It is like saying, ‘Colorless green ideas sleep furiously.’

Marx never drew up a plan for a post-capitalist society. In the afterword to the second German edition of volume 1 of Capital, he mocks the very idea:

"Thus the Paris Revue Positiviste reproaches me in that, on the one hand, I treat economics metaphysically, and on the other hand - imagine! - confine myself to the mere critical analysis of actual facts, instead of writing recipes (Comtist ones?) for the cook-shops of the future." -- Karl Marx

The Engels 1880 pamphlet Socialism: Utopian and Scientific, which was taken from three chapters in Herr Duhring’s Revolution in Science, can also be cited here. Robert Owens, Charles Fourier, Saint Simon exemplify utopian socialism. According to Engels, they make up a program for future society out of their own heads and think it can be implemented by convincing others by reason and by demonstrating the success of a few voluntary communities. Unlike scientific socialism, they do not look at current trends in society and find a class base for the trends they look to continue.

I suppose one might introduce a few caveats about a short run program in the 1848 pamphlet The Communist Manifesto, a paragraph in the unpublished 1846 manuscript The German Ideology, the 1871 Marx pamphlet The Civil War in France, and the 1875 letter Critique of the Gotha Programme.

3.0 To Correct an Injustice Under Capitalism

In volume 1 of Capital, Marx describes how surplus value results from the exploitation of the workers. He defines the rate of exploitation, which is an algebraic quantity that can be approximated, at least, from the data in national income and product accounts.

Marx explicitly says that exploitation is not an injury to the worker:

"The circumstance, that on the one hand the daily sustenance of labour power costs only half a day's labour, while on the other hand the very same labour power can work during a whole day, that consequently the value which its use creates, is double what he pays for that use, this circumstance is, without doubt, a piece of good luck for the buyer, but by no means an injury to the seller." -- Karl Marx, Capital, chapter VII, Section 2

One might also look at a passage about the rights of man, Bentham, and so on towards the end of chapter VI of Capital, chapter VI. Also see the end of section 1 of chapter VII of Capital. All of this is in volume 1.

Engels, in the preface to the first German edition of The Poverty of Philosophy, re-iterates Marx's position:

"According to the laws of bourgeois economics, the greatest part of the product does not belong to the workers who have produced it. If we now say: that is unjust, that ought not to be so, then that has nothing to do with economics. We are merely saying that this economic fact is in contradiction to our sense of morality. Marx, therefore, never based his communist demands upon this, but upon the inevitable collapse of the capitalist mode of production which is daily taking place before our eyes to an ever greater degree; he says only that surplus value consists of unpaid labour, which is a simple fact." -- Friedrich Engels

I have gone on about this before.

4.0 To Complete a Historical Trend

Marx provides a summary statement of the theory of historical materialism in the preface to A Contribution to the Critique of Political Economy and a more detailed treatment in The German Ideology. In Capital, he writes:

"As soon as the process of transformation has sufficiently decomposed the old society from top to bottom, as soon as the labourers are turned into proletarians, their means of labour into capital, as soon as the capitalist mode of production stands on its own feet, then the further socialisation of labour and further transformation of the land and other means of production into socially exploited and, therefore, common means of production, as well as the further expropriation of private proprietors, takes a new form. That which is now to be expropriated is no longer the labourer working for himself, but the capitalist exploiting many labourers. This expropriation is accomplished by the action of the immanent laws of capitalist production itself, by the centralisation of capital. One capitalist always kills many. Hand in hand with this centralisation, or the expropriation of many capitalists by few, develop, on an ever-extending scale, the co-operative form of the labour process, the conscious technical application of science, the methodical cultivation of the soil, the transformation of the instruments of labour into instruments of labour only usable in common, the economising of all means of production by their use as the means of production of combined, socialised labour, the entanglement of all peoples in the net of the world market, and with this, the international character of the capitalistic regime. Along with the constantly diminishing number of the magnates of capital, who usurp and monopolise all advantages of this process of transformation, grows the mass of misery, oppression, slavery, degradation, exploitation; but with this too grows the revolt of the working class, a class always increasing in numbers, and disciplined, united, organised by the very mechanism of the process of capitalist production itself. The monopoly of capital becomes a fetter upon the mode of production, which has sprung up and flourished along with, and under it. Centralisation of the means of production and socialisation of labour at last reach a point where they become incompatible with their capitalist integument. The integument is burst asunder. The knell of capitalist private property sounds. The expropriators are expropriated.

The capitalist mode of appropriation, the result of the capitalist mode of production, produces capitalist private property. This is the first negation of individual private property, as founded on the labour of the proprietor. But capitalist production begets, with the inexorability of a law of Nature, its own negation. It is the negation of the negation. This does re-establish private property for the producer, but gives him individual property based on the acquisitions of the capitalist era: i.e., on co-operation and the possession in common of the land and of the means of production.

The transformation of scattered private property, arising from individual labour, into capitalist private property is, naturally, a process, incomparably more protracted violent, and difficult, than the transformation of capitalistic private property, already practically resting on socialised production, into socialised property. In the former case, we had the expropriation of the mass of the people by a few usurpers; in the latter, we have the expropriation of a few usurpers by the mass of the people." -- Karl Marx, Capital, Volume 1, Chapter XXXII

The above is more than usually quoted. I wanted to include the passage about the 'negation of the negation', where in the first negation one historical system is replaced by another. For example, the October revolution was one negation. You can see why Stalin left this dialectical principle out of Dialectical and Historical Materialism.

Marx has some empirical claims. Capitalism is to bring about greater interdependence among workers. Marx foresees the development of monopoly capitalism and globalism. Is his claim that misery of workers increases absolutely, not just relatively, with increased inequality? He does not foresee the aristocracy of labor in industrialized countries. If you look at the third world, perhaps the growth of capitalism is, indeed, accompanied by increased poverty of the masses. Anyways, perhaps the existence of a threatening alternative in the U.S.S.R. has a lot to do with the history of Europe and the U.S.A. in the last century. This existence certainly complicates any expectation that his predictions would come about in western Europe and the U.S.A.

Elsewhere, Marx writes about business cycles and the reproduction of the reserve army of the unemployed. Some have read Marx as saying that socialism will emerge as the result of increasingly more violent business cycles. The supposed tendency of the rate of profits to fall is in volume 3.

One might wonder how this analysis of historical trends is an advocacy of anything. Those trying to change the world might take comfort in being on the right side of history. On the other hand, maximalists did not feel obligated to participate in many day-to-day struggles since the revolution is inevitable.

5.0 As A Solution to the Alienation of the Worker

Alienation is a prosaic concept. Marx, in the Theories of Surplus Value, quotes James Stuart writing about the 'profit upon alienation'. When one sells a good one owns, one has alienated it from oneself.

The workers do not own the commodities they produce in a capitalist society. They have alienated their labor when they sell their labor power, and thus capitalists own commodities when they have been produced by others. These commodities are related to one another in various ways. Workers will use some commodities, such as semi-finished goods and fuel, to continue production, after they are bought and sold among the capitalists. Workers will use other commodities to (re)produce the machinery and plant with which they work. Still other commodities are consumption goods, which, typically, must also be sold among capitalists before they are available for retail purchase.

Workers produce more than this alien world of commodities, in which social relations among workers are expressed. They also reproduce the employer-employee relationship since, mostly, they continue to have nothing to sell but their labor-power. They need income to buy consumption goods, and the capital goods remain in the hands of others. And it is the capitalists that have the time and income to participate in the enjoyments of luxuries, including activities that decide on the government of society.

Marx writes about the fetishism of commodities in the first volume of Capital, and Lukacs writes about reification. In the German Ideology, Marx and Engels argue that communism will eliminate this division between this alien world and the workers outside it who have produced it. They think of the proletariat as a universal class, with an end to class conflict arriving with the proletarian revolution.

Is this justification for a communist revolution considerably diminished by mass suffrage and an increase in the absolute income of the working class? Even with these developments, money, prices, and buying and selling still continue. But they also continued in the Soviet Union and China after their communist revolutions. Maybe Marx should have outlined a blueprint for a post-capitalist society.

Profiles Of Socialists From Jacobin

Jacobin is a recent, popular socialist magazine in the United States. I think the editor is Bhaskar Sunkara. Doubtless, some of you will have objections to some of the politics of some of their writers or interpretations of various things.

One nice aspect of their magazine is that they provide profiles and write ups of lesser known historical figures and events in the past. Some of these are academics writing on their speciality. Some are book reviews. I have gathered together some links:

• 1968.
• Salvator Allende and Chile.
• Perry Anderson.
• Otto Bauer and Austro-Marxists.
• Walter Benjamin.
• Theodor Bergman (I do not know him).
• Amadeo Bordiga.
• Nikolai Bukharin.
• Chicago seven.
• Stokely Carmichael (Kwame Ture).
• James Connolly (I don't know him).
• Eugene Debs (link 2, link 3, link 4, ...).
• Isaac Deutsher.
• W. E. B. Du Bois.
• Flint sit-down strike.
• Charles Fourier.
• Erich Fromm.
• Antonio Gramsci (link 2, link 3, link 4, link 5, link 6, ...)
• Fred Hampton.
• Michael Harrington.
• Rudolf Hilferding.
• Eric Hobsbawm and others.
• Max Horkheimer.
• C. L. R. James (I don't know him).
• Michal Kalecki.
• Karl Kautsky.
• Leo Kofler (I don't know him).
• Oscar Lange.
• Marcel Liebman (I don't know him).
• John Lewis.
• Georg Lukacs.
• Rosa Luxemburg (Link 2, Link 3, Link 4, Link 5, Link 6, Link 7, Link 8, Link 19, ...).
• Manning Marable. (I don't know him.)
• Herbert Marcuse.
• Franceso Misiano (I don't know him).
• Otto Neurath.
• Anton Pannekoek.
• Paris commune.
• Karl Polanyi.
• J. Posadas (I don't know him).
• John Reed.
• Republican tradition.
• Joan Robinson.
• Arthur Rosenberg (I don't him).
• Mark Rudd.
• Bayard Rustin.
• Mario Savio.
• Ignazio Silone (I don't know him).
• Students for a Democratic Society.
• Paul Sweezy.
• Leon Trotsky.
• Simone Weil.
• Oscar Wilde.
• Clara Zetkin and others.

I am not sure how much the above reflects my biases, skills with search engines, or Jacobin biases. I know I looked up Jean Jaurés and George Sorel, for example, and could not find anything. I may update this. I probably could do this with other web sites associated with magazines.

The Reswitching Of The Orders Of Fertility And Rentability Revisited

Figure 1: A Part of a Parameter Space

This post revisits my numerical examples in which I demonstrate the possibility of the reswitching of the order of fertility and of the reswitching of the order of rentability. Each of those posts presents a numeric example. In each, different ranges of the coefficients of production a_0,2 and a_1,2 are considered. This post combines those ranges, while still not considering the full parameter space, even for the slice for these coefficients.

In the example, reproduction of a capitalist economy requires the production of two commodities, iron and corn. Managers of firms know one process for producing iron and three processes for corn. Each corn-producing processes operates on a different quality of land. The given endowments of land and the requirements for use are such that all three types of land must be farmed. In each of three techniques of production, Alpha, Beta, and Gamma, the decisions of managers of firms result in two types of land being completely farmed. The third type of land is only partially farmed. Being in excess supply, it pays no rent (the rule of free goods). Which type of land pays no rent varies among the three techniques.

I consider the analysis of the choice of technique in this example. Following Sraffa, I assume wages and rents are paid out of the surplus product after the harvest. In this analysis of prices, extra profits cannot be obtained at prices of production by operating any available process. The difference between the revenues and wages and charges on capital goods for processes that produce agricultural goods are compensated for the rents obtained by landlords.

Figure 1, at the top of the post, illustrates, a part of a slice of the parameter space. Reswitching of the order of rentability occurs in region 3. Reswitching of the order of fertility occurs in region 7. Table 2 summarizes the result of the analysis of the choice of technique in each section. For this range of paramters, the Alpha technique, in which type 3 land pays no rent, is always cost-minimizing. The maximum rate of profits is the maximum rate of profits for the Alpha technique. The range of the rate of profits is partitioned into intervals where either the order of fertility or the order of rentability do not vary. And these orders are also listed.

Table 2: Techniques of Production

Region	Range of Rate of Profits	Order of Fertility	Order of Rentability
1	0 ≤ r ≤ r1	Type 2, 1, 3	Type 1, 2, 3
	r1 ≤ r ≤ rα,max		Type 2, 1, 3
2	0 ≤ r ≤ rα,max	Type 2, 1, 3	Type 2, 1, 3
3	0 ≤ r ≤ r1	Type 2, 1, 3	Type 2, 1, 3
	r1 ≤ r ≤ r2		Type 1, 2, 3
	r2 ≤ r ≤ rα,max		Type 2, 1, 3
4	0 ≤ r ≤ rα,max	Type 2, 1, 3	Type 1, 2, 3
5	0 ≤ r ≤ r1	Type 2, 1, 3	Type 2, 1, 3
	r1 ≤ r ≤ rα,max		Type 1, 2, 3
6	0 ≤ r ≤ r1	Type 1, 2, 3	Type 1, 2, 3
	r1 ≤ r ≤ rα,max	Type 2, 1, 3
7	0 ≤ r ≤ r1	Type 2, 1, 3	Type 1, 2, 3
	r1 ≤ r ≤ r2	Type 1, 2, 3
	r2 ≤ r ≤ rα,max	Type 2, 1, 3
8	0 ≤ r ≤ rα,max	Type 1, 2, 3	Type 1, 2, 3
9	0 ≤ r ≤ r1	Type 2, 1, 3	Type 1, 2, 3
	r1 ≤ r ≤ rα,max	Type 1, 2, 3

Technical progress can be seen as a reduction in coefficients of production. For this example and the chosen coefficients of production, technical progress is a movement from the northeast to the southwest in the figure at the top of the post. Initially, the order of rentability is the same as the order of fertility, and neither order varies with the rate of profits (region 2). At some point, the order of rentability has reversed, for lands that pay a rent (region 4). Even later, the order of fertility has reversed, so the orders of fertility and rentability once again match, whatever the rate of profits (region 8). The reswitching of these orders appear at intermediate regions of time between each reversal.

This example is another example showing why biotechnological determinism is unfounded. One can see that one type of land is simultaneously more and less fertile than another type, depending on the rate of profits or the wage. And this ranking can be reversed and then switched back with, say, an increase in the rate of profits. Furthermore, owning the more fertile type of land need not allow its owner to obtain a larger rent per acre than a less fertile type of land that pays a rent. And whether or not these orders match also varies, possibly non-monotonically, with the distribution between wages and profits.

It is meaningless to claim that economic agents earn the worth of the contributions (of the goods that they own) to production.

Georgists Should Study Post-Sraffian Economics

1.0 Introduction

Here are some attempts to step back, but not very far, from some of the details in my numeric examples.

2.0 Henry George and Piero Sraffa

Henry George's book Progress and Poverty misrepresents classical political economy. I cannot justify this claim, since I read George's book more than a decade ago. But George and his followers are absolutely correct on a couple of points.

Marginalism developed by extending the theory of intensive rent, as in David Ricardo's Principles for example, to capital. This mistake results in the conflation of capital and land. And the acceptance of this mistaken approach was politically motivated to cover over the conflict between classes evident in classical political economy. It was an attempt to ignore the social question.

Henry George was also correct in thinking economists give good reason to tax rent on unimproved land. I think Quesnay and Ricardo each provide evidence that George was correctly understanding this aspect of classical political economy.

Piero Sraffa generalized interesting properites of land to the distinction between basic and non-basic goods. As I recall, he suggests a definition of non-basic goods, in the case of joint production, as those goods whose price of production is changed by a tax but in which that change has no wider impact on the prices of all goods.

I think a study comparing some aspects of the economics of George and and Sraffa might be a good research prospect for others.

3.0 Marginalism as an Illegimate Generalization of Ricardo's Theory of Intensive Rent

Part of the point of my numeric examples is demonstrating that marginalisms attempt to treat capital and land by the same theory fails. Capital (goods?) cannot coherently be considered as a given quantity to be allocated among alternative uses. Jevons, Menger, Walras and their fellow marginalists were mistaken.

The marginalists also had a utility theory of consumer demand. Amazingly, the human psyche and production follow the same laws.

I have thought, not very hard, about how appending demand functions for consumer goods might impact my exposition of numeric examples of rent theory. An additional fluke case would arise. This edge case would be between a case where a certain type of land is partially farmed and pays no rent and a case where this type of land is fully farmed and pays a rent. In the edge case, this type of land needs to be fully farmed to meet requirements for use. Rent on this type of land can range from zero to the rent it would pay if net output were increased by an infinitetesimal amount. In the edge case, prices of production are indeterminate. I guess payments to factors of production are still not rewards to physical contributions to production.

4.0 Fixed Capital and Extensive Rent

Models of single production (circulating capital) have some nice propeties that do not hold in general joint production. Given the rate of profits, prices of production are uniquely defined. Given a higher rate of profits, the wage is lower.

These properties hold in models of pure fixed capital and in models of extensive rent. I suspect they do hold in a model that combines fixed capital and extensive rent.

One might consider a model in which an industrial good, a tractor, is produced in a process that does not use land. It can be run for several years in processes that produce agricultural goods on different types of land. The analysis of the choice of technique would consider the economic life of the tractor, as well as which lands are fully or partially farmed. It seems to me this model would have at least some of the properties of the theory of intensive rent.

An Example Of Non-Uniqueness In A Model Of Extensive And Intensive Rent

Figure 1: Wage and Rent Curves for a Numeric Example

1.0 Introduction

This post continues, with some repitition, my exposition of a model of extensive and intensive rent.

In the example, the cost-minimizing technique is non-unique at a low enough wage or rate of profits. One cost-minimizing technique, Epsilon, illustrates a case of extensive rent. The other cost-minimizing technique, Iota, illustrates a case with both extensive and intensive rent. In this technique, a kind of absolute rent arises on a land that is only partially farmed, and, thus, in excess demand. The rule of free goods does not seem to apply. (I am not sure how well thought out this idea is.) I also note the existence of what I am calling a 'semi-fake' switch point.

The conflicts among workers, landlords, and capitalists are complicated in this example. At a given rate of profits, workers get a lower wage if landlords can get more rent. At a given wage, the rate of profits is lower if landlords can get more rent

Economists demonstrated over a half-century ago that a theory of supply and demand functions is a kind of nonsense.

2.0 Technology

Table 1 presents coefficients of production for the example. Here, two types of land exist. Only one agricultural commodity, corn, can be produced on the processes in which land is used. For the second type of land, two processes can be operated on land. Only one process is known for producing the industrial commodity.

Table 1: The Coefficients of Production

Input	Industry
	Iron	Corn
	I	II	III	IV
Labor	a0,1 = 1	a0,2 = 9/10	a0,3 = 91/250	a0,4 = 1/2
Type I Land	0	c1,2 = 1	0	0
Type II Land	0	0	c2,3 = 13/10	c2,4 = 1
Iron	a1,1 = 2/5	a1,2 = 1/50	a1,3 = 9/10,000	a1,4 = 67/1000
Corn	a2,1 = 2	a2,2 = 6/125	a2,3 = 27/100	a2,4 = 3/20

I assume 300 acres of Type 1 land and 200 acres of Type 2 land are available. Requirements for use, that is, required net output, consists of 90 tons iron and 60 tons steel. This commodity basket is also the numeraire.

Table 2 lists the available techniques of production. Not all are feasible. Feasibility depends on requirements for use (that is, required net output) and how much of each type of land is available. Rent is zero for the Alpha, Beta, and Gamma techniques, since neither type of land is fully used. That is, land is not scarce. Techniques Delta, Epsilon, Zeta, and Eta are examples of extensive rent since only one process is operated on each type of land. The Theta technique resembles an example of intensive rent. Finally, if the Iota technique is adopted, one will observe both extensive and intensive rent.

Table 2: Techniques of Production

Technique	Processes	Type 1 Land	Type 2 Land
Alpha	I, II	Partially farmed	Fallow
Beta	I, III	Fallow	Partially farmed
Gamma	I, IV	Fallow	Partially farmed
Delta	I, II, III	Fully farmed	Partially farmed
Epsilon	I, II, III	Partially farmed	Fully farmed
Zeta	I, II, IV	Fully farmed	Partially farmed
Eta	I, II, IV	Partially farmed	Fully farmed
Theta	I, III, IV	Fallow	Fully farmed
Iota	I, II, III, IV	Partially farmed	Fully farmed

Under these assumptions, the Delta, Epsilon, Zeta, Eta, and Iota techniques are feasible. The processes in the Alpha, Beta, Gamma, and Theta techniques cannot be operated at any level in which requirements for use are satisfied. Both types of land must be farmed to meet requirements for use.

3.0 The Choice of Technique

A system of price equations is associated with each technique. Wage curves for the Alpha, Beta, Gamma, and Theta techniques are shown in the left pane of Figure 1 at the top of this post. I only consider, in the analysis of the choice of technique, ranges of the rate of profits in which neither rent nor the wage is negative. This criterion rules out the Delta technique, always. Which type of land is fully farmed varies with which process is chosen for operation on type 2 land.

Under Epsilon, process III is operated; Type 2 land is fully farmed; and Type 1 land pays no rent. The Epsilon technique is, in some sense, a combination of the Alpha and Beta techniques. The wage curve for Beta is further out than the wage curve for Alpha wage curve for the full range of profits. The wage curve for Epsilon is the Alpha wage curve, that is the further inward of the Alpha and Beta wage curves. The left pane in Figure 2 shows that Epsilon is cost-minimizing for the full range of the rate of profits in which the wage curve for Alpha is in the first quadrant; extra profits cannot be obtained by operating process IV, the only process not in the Epsilon technique, at Epsilon prices. Thus, the intersections of the Alpha and Gamma wage curves and of the Epsilon and Zeta rent curves are not switch points.

Figure 2: The Epsilon Technique Is Cost-Minimizing; The Zeta and Eta Techniques Are Never Cost-Minimizing

The Zeta and Eta techniques are a combination of the Alpha and Gamma techniques. The intersections of the Alpha and Gamma wage curves and the Eta and Zeta rent curves, at a rent of zero, relate to the range of the rate of profits at which they can enter into the analysis of the choice of technique. These intersections occur at the same rate of profits. The wage curves for Zeta and Eta are the innermost frontier of the Alpha and Gamma wage curves. For a rate of profits less than at the semi-fake switch point, Alpha is the frontier. Type 1 land pays no rent, and the Zeta technique cannot be operated with a non-negative rent. For a higher rate of profits, Gamma is the frontier, and Type 2 land pays no rent. Since only two types of land exist in this example, the order of fertility cannot deviate from the order of fertility. The right pane in Figure 2 shows that neither the Zeta nor the Eta technique is ever cost-minimizing.

The Iota technique is, in some sense. a combination of the Alpha and Theta techniques. The price equations for Theta determine, at a given rate of profits, the wage, the prices of corn and iron, and the rent on Type 2 land. Type 2 land is fully farmed under Theta. A linear combination of the price equations for processes III and IV eliminates rent from these equations. One ends up with a system of two price equations, for iron and corn, with one degree of freedom, given the numeraire. But the Theta technique cannot satisfy requirements for use. The price equation for process II, which operates on Type 1 land, can only be satisfied if rent on Type 1 land is positive. It does not matter for this solution whether or not Type 1 land is fully farmed. The wage frontier for Iota is the innermost of the Alpha and Theta wage curves, that is, the Theta wage curve. Since all processes in the example enter into the Iota technique, no extra profits can be obtained by operating any process at Iota prices. Iota is always cost minimizing, up to the maximum rate of profits for the Theta technique. What do you think of this absolute rent on Type 1 land?

So the above presents my rationale for saying this is an example, at low rates of profits, of non-unique cost-minimizing techniques. Prices, including the wage and rents per acre, are also non-unique. And I am able to apply a theory of prices, in an open model, without ever deriving supply and demand functions.

4.0 An Aside on Multiple Agricultural Commodities

I do not know if, for example, the possibility of absolute rent, with some land of a specified quality left uncultivated has been noticed before.

I also think the following claim, from the chapter on rent in Piero Sraffa's PofCbyMofC, has not been justified or falsified in non-fluke cases:

"89. More complex cases can generally be reduced to combinations of the two that have been considered. The main type of complication arises from the multiplicity of agricultural products.

Thus, suppose that in the first case land of one quality was so exceptionally well-suited for one particular crop, that such a crop was grown on the whole of that land and on no other land; under these circumstances there would be room for two different methods of producing the crop in question on that land, and its rent would be determined independently of that of the other lands becoming in effect an instance of the second case.

Or consider the more general case in which each of several qualities of land can be used for several alternative crops; although none of the crops is grown on land of all qualities; while on the other hand none of the lands is sufficiently specialised to have its rent determined independently of the others. What is required in any case is that the number of separate processes should be equal to the number of qualities of land plus the number of products concerned; and, moreover, that the links or overlaps between the various products and the various lands on which they are grown should be sufficient for the determination of the rents and the prices. The type of link required may be sufficiently indicated by the consideration that the above condition were such as to make possible the construction of a Standard commodity from which were excluded all the lands as well as any non-basics among the products.

In the case of a single quality of land, the multiplicity of agricultural products would not give rise to any complications. It may however be noted that only for one of the crops would two separate methods of production be compatible; for the rest, the number of processes would have to be equal to the number of products." Sraffa (1960)

Sraffa certainly does not justify that claim in his book. I suppose I could work through the example problems at the end of Chapter 10 of Kurz and Salvador (1995) and look up the authors from which these examples are drawn. These authors include Antonio D'Agata, Guido Erreygers, Giuseppe, Alberto Quadrio-Curzio, and Philippe Saucier. Unfortunately, a lot of this work seems to be languages I cannot read.

Direct And Indirect Methods, Axioms And Algorithms For The Choice Of The Technique

1.0 Introduction

Kurz and Salvadori (1995) explain prices of production with two methods of analysis: the direct method and the indirect method. The indirect method, for the circular capital case, involves the creation of the wage frontier, the most well-known diagram to come out of Sraffa (1960). The direct method characterizes a system of prices of production by axioms, while the indirect method suggests algorithms for finding cost-minimizing techniques.

2.0 The Direct Method

In both methods, the given technology is characterized as a set of processes. A process is specified as the quantities of inputs and the quantities of outputs for a given level of operation. In the case of reproducible natural resources, that is, land, the quantity available of each quality of land should be specified. I do not think that non-reproducible natural resources fit comfortably in this model; some work has been done on the corn-guano model exploring this.

I find it useful to assume constant returns to scale. I understand why Sraffa does not need this assumption in the first two sections of his book. He does not consider the choice of technique there or how a state can be reached in which the same rate of profits is obtained for each operated process. He considers which process is operated and the level of operation of each process as given. Sraffa explicitly says that his assumption, that no question of the returns to scale arises, does not apply to the last section, analyzing the choice of technique. I find it difficult to understand how the theory of joint production can be set out without considering the choice of technique.

Informally, the following six axioms characterize quantities and prices for a capitalist economy undergoing smooth reproduction:

1. The levels of operation of the processes comprising the technology are such that, after replacing commodities used up in production and those needed for accumulation at the given rate of growth, requirements for use can be satisfied by net output.
2. The levels of operation of the processes comprising the technology are such that one unit of labor is employed throughout the economy.
3. No pure economic profits can be made by operating any process. That is, for each process, the revenues obtained from operating it do not exceed its costs, including charges for the rate of profits, rent, and wages.
4. The price of the numeraire is unity.
5. The rule of free goods: The price of a good in excess supply (that is, with a level of production strictly exceeding its requirements for use) is zero.
6. The rule of non-operated processes: If the costs of operating a process, including charges for the rate of profits, strictly exceeds the revenues obtained from that process, it is not operated.

Kurz and Salvadori set out these axioms for specific models, along with non-negativity conditions. In models of rent, one discards the second axiom; scale matters. The most general model, I guess, is that of full joint production. What can be deduced from the axioms varies among these models.

3.0 The Indirect Method

One can set out the indirect method by applying combinatorics, in which one looks at all possible techniques that can be constructed from the processes comprising the technology. Discard those techniques that cannot satisfy requirements for use. In the circulating capital case, each technique yields a system of equations with one degree of freedom. These equations can be solved. So each technique has a wage curve, in which the wage is lower, the higher the rate of profits. All these curves can be graphed on the same graph, and the outer wage frontier shows which technique is cost-minimizing at any given wage or rate of profits.

How can a combinatorial explosion be avoided in this analysis? By applying certain algorithms which do not require one to consider every technique. Christian Bidard champions the Lemke algorithm for the case of fixed capital. As in the case of the simplex method for linear programs, one does not need to consider every feasible technique in finding the cost-minimizing technique for a given wage or rate of profits.

4.0 Questions

Different, but related questions, arise for the two methods. For the direct method, one asks, what conditions must technology satisfy such that a solution of quantities and prices exist? When is this solution unique? For the case of circulating capital, one looks at the Hawkins-Simon condition, the Perron-Frobenius theorem, and the misleadingly-named non-substitution theorem. In the case of general joint production, the special case in which the rate of profits is equal to the rate of growth is of interest. I suppose research questions might still revolve about how many of the nice properties of circulating capital carry over to models that are intermediate between this case and full joint production. For example, has any work been done on combining a fixed capital model with a model of extensive rent? Biao Huang recently found that revisiting the fixed capital model was worthy of research. Relaxing the assumption of free disposal is important for investigating environmental concerns.

For the indirect method, I ask on what platforms are these algorithms executing? When I apply numerical methods for finding fluke switch points, I am definitely not making any claims about how markets work. I think my application of linear programming and duality theory in my 2005 Manchester School article is another case of an external analyst examining an economic model. But sometimes, as in my 2017 ROPE article, an algorithm is described that can be executed by an abstract market. At least this seems to be Bidard's view. And these algorithms might even be able to be executed in parallel by, say, accountants working for different firms in different industries. What I would like to see, however, is how market structures, how bids and asks are resolved, for example, enters into these algorithms. Be that as it may, one can ask which algorithms converge. How fast? Is the point to which they converge unique and independent of the initial condition?

References

• Christian Bidard. 2004. Prices, Reproduction, Scarcity. Cambridge University Press.
• Heinz D. Kurz and Neri Salvadori (1995) Theory of Production: A Long-Period Analysis. Cambridge University Press.
• Keiran Sharpe. 1999. Note and comment: on Sraffa's price system. Cambridge Journal of Economics 23(1): 93-101.
• Piero Sraffa. 1960. The Production of Commodities by Means of Commodities: Prelude to a Critique of Economic Theory. Cambridge University Press.
• K. Vela Velupillai. 2021. Definitions, assumptions, propositions and proofs in Sraffa's PCMC. In A Reflection on Sraffa's Revolution in Economic Theory (ed. by Ajit Sinha). Palgrave
• Ludwig Wittgenstein. Remarks on the Foundations of Mathematics, revised edition.
• J. E. Woods. 1990. The Production of Commodities: An Introduction to Sraffa. Macmillan.