Excerpts from the  

to MARX's  economics" 

by Michio Morishima


It is our great misfortune that economists have for a long time been divided between the ‘orthodox’ and Marxian camps as a result of cliquishness; each school has lost touch with the other and has become inbred… …orthodox economists, … are in the wrong, not only in segregating Marxists but also in undervaluing Marx, who should in my opinion be ranked as high as Walras in the history of mathematical economics. 

It has rarely been pointed out that the general equilibrium theory was formulated independently and simultaneously by Walras and Marx. It was in 1874 that Walras’ Elements d’économie politique pure was first published; whilst it was early in the 1860s that Marx began to investigate the problem of ‘reproduction and circulation of the aggregate social capital’. The fact that Marx’s work was only published after his death — by Engels, in volumes II and III of Capital in 1885 and 1894 respec­tively— does not affect the greatness of his achievement at all. Indeed, Marx’s theory of reproduction and Walras’ theory of capital accumulation should be honoured together as the parents of the modern, dynamic theory of general economic equilibrium. However, unlike Walras but like Hicks, Marx constructed a two-stage general equilibrium theory. It has often been pointed out that Walrasian microscopic equilibrium theory is rather sterile, since it is too general and complicated to be able to derive definite conclusions.


It is no exaggeration to say that before Kalecki, Frisch and Tinbergen no economist except Marx, had obtained a macro-dynamic model rigorously constructed in a scientific way. His micro-model, the foundation of his macro-model, might on the other hand, as I have mentioned, be compared with Walras’ general equilibrium model of capital formation and credit. These are the most elaborate models we have ever had, though Walras’ is more detailed than Marx’s in the analysis of consumer demand for commodities. This last point has often been reckoned as one of the defects of Marx’s theory, but it must be remembered that only by drastically simplifying the aspect of consumers’ choice was he able successfully to derive definite dynamic laws concerning the working of his system through time. It was a very practical bargain, which has become popular among us since Keynes’ General Theory. Hicks accepted the same exchange in his Theory of the Trade Cycle. Leontief in his short-run theory, even regarded consumption as constant. Thus many contemporary economists believe that it is more important to obtain a theory which can describe dynamic movements of the economy, rather than one which can elaborate consumers’ preference. This is exactly the choice which Marx made.

Moreover, Marx’s theory of reproduction is very similar to Leontief’s input—output analysis. (Or more correctly, we should say conversely that Leontief reproduced Marx as well as Walras in a pragmatic way.) And as we shall see later, Marx’s theory contains in itself a way to the von Neumann Revolution; although he will have lost some of his properties during the Revolution, after it he will be honoured as one of the authors of the Marx—von Neumann model, in which, if we wish, we can allow consumers’ choice as I have done in my Equilibrium, Stabi­lily and Growth. Thus Marx is still active on the frontier of our science. One of his tools has recently been rediscovered and named the factor—price frontier — one of the most fundamental concepts of present-day growth theory. …


The concept of the value-composition of capital, which Marx utilized in aggregating industries and in constructing his breakdown thesis, is no more than the Marxian counterpart of the capital— labour ratio, which has been found most useful in the analysis of growth. These would be enough examples to recommend Marx as a purely academic economist for one of the very few chairs with the highest authority.

Unfortunately, however, it will be found that Marx has to lose much, even his most precious properties, in order to be legitimated by orthodox economists. Marx’s labour theory of value and his theory of exploitation are, in spite of repeated criticisms by his opponents, highly suggestive and economically meaningful under some conditions. Nevertheless, they must be victims of the von Neumann Revolution;

Another victim is provided by his theory of the breakdown of the capitalist mode of production. It is evidently the essence of Marxism, but it was only briefly discussed by Marx himself; so that he might not be too surprised to hear that counter-examples have been found later. It must also be emphasized, on the other hand, that despite the counter-examples more work needs to be done in this largely unexplored area. As mathematical growth theory has become involved in the Rostovian take-off problem, it must be concerned with the Marxian breakdown problem too, and many interesting findings may be expected.


  It will take a long time for these Marxian concepts to re­establish their legitimacy; perhaps they will never be able to acquire full citizenship in scientific economics. Nevertheless, they are attractive and worth speculating about. It is no wonder that some economists cannot agree that they should be abandoned. Those who are interested in these subjects will continue to form a subgroup for investigating such special and yet illegitimate topics. Marxian economics may continue to exist in this way after all the valid achievements of Marx have been commonly accepted by economists, and the division between valid Marxian economics and orthodox theory has been removed.

Thus our approach to Marx is somewhat different from the so-called Marxian economics, now stylized by both Marxists and non-Marxists. We make Marx stand out not only for his own sake, but against the economic theory of our time. Our aim is to recognize the greatness of Marx from the viewpoint of modern advanced economic theory and, by so doing, to contribute to the development of our science. We do not discuss Marx in relation to his predecessors, such as Smith, Ricardo and Quesnay; we pay no attention to the development of Marxian economics after Marx. We neglect even his works other than the three volumes of Capital, and confine ourselves to assessing, according to the standards of contemporary economic theory, his contributions in that book to the following major topics of traditional Marxian economics: (1) the labour theory of value, (2) the theory of exploitation, (3) the transformation problem, (4) reproduction, (5) the law of relative surplus population, (6) the falling rate of profit, and (7) the turnover of capital.







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