I don’t always agree with Chomsky, but what he says here about Marxism is spot on. The interesting and insightful individual concepts in Marx’s Capital – say, the idea of the monetary production economy, endogenous money,* the rudiments of aggregate demand theory, etc. – should be taken up in contemporary economy theory and developed. The other absurd, dogmatic and untenable aspects of Marxism – the labour theory of value, falling rate of profit idea, etc. – should be utterly rejected. Marx should be read as part of the history of economic theory, and his whole theory was essentially a failed theory of 19th-century capitalism, nothing else.
Note
* I hasten to add that endogenous money theory was known well before Marx and he did not originate the theory.
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Ah, a new week, a fresh load from LK.
ReplyDelete"We should like only those parts of Marx I personally agreed with going into my study, and hate those parts I personally was skeptical about and therefore refuse to state in non-contradictory terms. My definition of science is 'to restate one's priors in increasingly insulting and arrogant ways.' " - Very Serious Economics Blogger Lord Keynes
Real talk: Are we ever gonna get to hear why Marx's theory "fails"? All you ever give us is contentious interpretations.
ReplyDeleteThese comments of those of an idiot troll. My advice: just sod off -- unless you want to make serious comments.
DeleteHi Lord Keynes,
ReplyDeleteOn the concept of aggregate demand and aggregate supply, Marx provides the rudiments on which many Post Keynesians have built.
The 'forces of production' represent the forces which affect productivity, productive capacity and aggregate aupply (Labour, means of production, technological progress etc.). The relations of production (wage-labour and capital) represent the relation between wages and profits (or more broadly 'surplus value') and this relation shows how the distribution of national income affects aggregate demand.
Marx's distinction between the production of profits and their realisation is important. Distribution is central to macroeconomics and not peripheral as in neo-classical theory (including new Keynesianism). Aggregate demand matters not only in the short run but also in the long run.
No-one needs the failed LTV nor the failed theory of the long run falling rate of profit to see some value in Marx.
John Arthur.
John,
DeleteI would urge caution with the "failed LTV" bit, since in a setting such as this it tends to be less of a phrase with descriptive potency and more of a tautology, since "LTV" is virtually defined as "a theory that has failed." As seen above, when one asks for information on it that doesn't boil down to a contentious interpretive squabble -- i.e., actual empirical evidence of failure -- one is very rudely dismissed.