Marx's influence, in the decades following the publication of Book 1 of Capital until recent times, has been enormous. His thought inspired great, highly organised communist movements in industrialised Western countries, and political regimes that long dominated the major developing countries, from the Soviet Union after the 1917 Revolution, to China after the Second World War. This explains the huge volume of Marxian literature and the importance it has had in cultural debate. However, we will limit ourselves here to a few brief references to certain authors and themes of major relevance to the economic debate, while also omitting some important lines of research already considered in the previous sections (such as the transformation of labour values into prices of production).
Marx's immediate successors - his friend Friedrich Engels and his pupil Karl Kautsky (1854-1938) - are to be recalled here above all as editors of important works by their master published posthumously: Books 2 and 3 of Capital for Engels, and the Theories of surplus value (Marx, 1905-10) for Kautsky. In his political activity Kautsky was also one of the first of the 'revisionists', stressing the importance of the market (and consequently of money) for political and social progress, showing a preference for a long phase of transition from capitalism to socialism rather than the abrupt revolutionary leap to a fully centralised system as happened in the Soviet Union after the Bolshevik Revolution of 1917.52
The same line was followed, with greater clarity and decision, by Eduard Bernstein (1850-1932); his best-known work is The prerequisites of socialism and the tasks of social-democracy (1899), where he developed an evolutionistic view of the construction of socialism (as shown by the title of the English translation, Evolutionary socialism). In contrast with Marxian theories on the necessity of dictatorship of the proletariat in the
52 On Kautsky, and more generally on the debate of the time between the different currents of Marxist socialism, cf. Salvadori 1976.
socialist stage of transition towards communism, he stressed the central role of democratic institutions for political and social progress.
Bernstein set out to purge Marx's analysis of Hegelian dialectic; furthermore, he viewed with some diffidence the more strictly theoretical aspects of Marx's economic thought, from the labour theory of value to the 'laws' of the tendencies to a falling rate of profits and increasing misery of the workers, attributing decisive importance to what empirical observation of reality can tell us about them.
A somewhat similar line of thinking was followed by the socialists belonging to the Fabian Society, founded in 1884 by a group of British intellectuals that included George Bernard Shaw (1856-1950) and economic historians Sidney Webb (1859-1947) and his wife Beatrice (1858-1943).53 Shaw, Webb and various others produced a collective work, the Fabian essays in socialism (Shaw 1889), departing quite sharply from Marxism in the direction of an evolutionistic socialism even less radical than Bernstein's. The very name of the group is indicative of their programme, recalling the Roman consul Fabius Maximus, dubbed the Cunctator for his victorious war tactic based on small steps rather than great battles.
As far as economic theory was concerned, the Fabian essays show traces of a controversy following on an article by Philip Wicksteed (on whom cf. below, § 10.6), 'Das Kapital: a criticism' published in the periodical To-Day in October 1884. Wicksteed's criticisms of the labour theory of value and the Marxian theory of exploitation based on it won the attention of the 'Fabians', and particularly George Bernard Shaw. Reviewing the Fabian essays, Wicksteed was able to assert that 'The "Fabians" have been at work on political economy, and the result is the distinct and definitive abandonment of the system of Karl Marx.'54
With the Fabians evolutionary socialism, originally born as direct progeny of Marxism, broke sharply away. However, other currents that were placed under the heading of 'Marxist orthodoxy', essentially on account of their political success, can also be considered heterodox when we compare them with Marx's original thought.
53 The Webbs supported, among other things, social security schemes to be financed through taxes rather than through compulsory contributions as was the case with the system adopted by Bismarck and the system that took root in Great Britain after the Second World War. They also founded the London School of Economics, in 1895, designed to favour the development of a progressive economic culture well rooted in empirical research and not conditioned by the conservative ideology prevailing in the traditional universities. (On the subsequent radical changes of the London School, cf. Robbins 1971.)
54 The Inquirer, 16 August 1890, quoted by Steedman 1989, p. 131, who also provides an account of the debate (ibid., pp. 117-44).
The first name to be invoked here is that of Vladimir Ilich Ulyanov (1870-1924), also known as Lenin. Of his vast production on economic themes we may recall two works preceding the Soviet Revolution: The development of capitalism in Russia (1898) and Imperialism, the highest stage of capitalism (1916).
In the first of these two works Lenin stressed the role of growth in commercial relations in undermining the structure of economic power characterising agriculture, by far the dominant sector in Russia at the time, and the active intervention ofthe tsarist state in the industrialisation process, with the creation of great factories and large concentrations of workers. Clearly, in recognising the revolutionary potentialities of such a situation Lenin was departing from Marx's original thesis, which saw the proletarian revolution as the inevitable outcome of a fully developed capitalism.
The second work, a brief essay written under the impetus of the First World War, began by recognising an element that contradicted Marx's analysis and that had become clear with the war, namely the fact that the workers and socialist parties in different countries identified with their respective national interests. Lenin took up a thesis propounded by British economist John Hobson (1858-1940) in an essay on Imperialism published in 1902, which saw in colonial developments the quest for outlets for the population and capital that remained unused in the industrialised countries because of the tendencies to under-consumption always latent in them. Lenin combined this thesis with an interpretation of monopoly capitalism fusing the Marxian 'law of industrial concentration' with the theory of integration of financial and industrial capital propounded by the Austrian Marxist Rudolf Hilferding (1877-1941) in Das Finanzkapital (1910).55
As far as the post-revolutionary Soviet Union was concerned, Lenin's writings pointed in the direction of the New Economic Policy (NEP) based on recognition of a certain role to the market, above all for determination of the crucial exchange ratio between agricultural products and manufactures, within a centralised economy characterised by state ownership of the means of production.
A leading supporter of NEP was Nikolai Bukharin (1888-1938), who, after the failure of attempts to export the socialist revolution to Western European countries, and in particular to war-impoverished Germany, contributed to the debate on 'socialism in one country' maintaining
55 In the area of reformist socialism, the Austrian current is particularly important; it included, together with Kautsky and Hilferding, also Otto Bauer (1881-1938) and various others. On the debate between Austrian socialists and Austrian marginalists, cf. Kauder 1970.
the expediency of postponing the stage of centralised planning, leaving greater leeway to market mechanisms. These should simply be 'guided' by the state authorities along the road to accumulation and industrialisation, through control over the nerve centres of the economy, which implied recognition of small-scale peasant agriculture, and gradualism in the industrialisation process. Subsequently Bukharin was converted to the Stalinist views of state agriculture and forced accumulation, but this did not save him from the Stalinist purges of the late 1930s.
Among other things, Bukharin was the author of an essay on the Economic theory of the leisure class (1917), criticising the subjective theory of value of the Austrian school (cf. below, ch. 11), interpreted as the manifestation of a freedom of choice in consumption open only to a small fraction of the population but extended, with ideological distortion, to represent the working of the whole economy. Less well known is his The ABC of communism (1919), written with Evgenii Preobrazhensky (1886-1937).
The latter author was, unlike Bukharin, critical of the NEP, advocating a 'primitive accumulation' that could be achieved in Russia only with systematic state extortion of the surplus produced by the agricultural sector. Preobrazhensky was therefore favourable to strongly centralised planning, state ownership in agriculture, and exchange ratios between agricultural products and manufactures set by the central planning authority in favour of manufactures in support of the industrialisation process. In a work of 1921, Preobrazhensky went so far as to foresee as inevitable the clash between the socialist state and the kulaks, the small independent farmers who were in fact to be exterminated by Stalin.
After the defeat of the NEP, Preobrazhensky turned his attention to the conditions of equilibrium growth, anticipating Harrod's theory (cf. below, § 17.6), and argued the possibility of 'over-accumulation crises'. Perhaps it was due to these ideas, despite the merits he had acquired in the NEP debate, that Preobrazhensky fell out of Stalin's favour: after a show trial one of the Soviet Union's best economists was shot in 1937.56
The theme of disequilibrium in the process of accumulation had already been subjected to Marxist analyses in relation to the capitalistic economies by Tugan-Baranovsky (1865-1919) and Rosa Luxemburg (1871-1919).57 Both utilised Marx's simple and enlarged reproduction schemes (cf. above, § 5). Tugan-Baranovsky (1905) thus showed both
56 On Preobrazhensky, cf. Ellman 1987.
57 On Tugan-Baranovsky, cf. Nove 1970; on Rosa Luxemburg, cf. Sweezy's introduction and Luciano Amodio's meticulous bio-bibliographical note to the Italian edition of his
the error of under-consumption theories holding crisis from deficiency of aggregate demand to be inevitable, and just how difficult it is to follow a growth path so as to maintain equilibrium between the propensity to save and investment opportunities. Rosa Luxemburg, in her celebrated The accumulation of capital (1913), studied the conditions of product realisation by focusing on the relationship between accumulation and growth of demand in the presence of a continuous drive towards technological change. Her book is a mine of ideas - albeit not always fully developed -that prompted a profusion of interpretative studies. Among other things, Rosa Luxemburg stressed the monopolistic nature of capitalism, the role of political elements (and military violence) in the functioning of the economy, imperialistic tendencies and the internationalisation of capitalism.
All these thinkers were, however, in one respect or another heretical in relation to the orthodoxy that had, since the late 1920s, been established in the Soviet Union and the European communist parties by the political leadership of Joseph Stalin (1879-1953). We have already seen his political choices in favour of accelerated industrialisation and state economy.58 As far as economic theory is concerned, mention must be made of his thesis on the 'validity of the law of value within the socialist economy', stated with increasing determination in the aftermath of the Second World War though previously it had been denied. Propounded in a cryptic form, the thesis was interpreted as grounds to attribute greater importance to the price mechanism within socialist economies.
After the end of Stalinism, in an intellectual climate less stifling, although respect for orthodox thinking still remained imperative, debate on the 'law of value in a socialist economy' saw the development of some courageous heterodoxies, especially in the 'Warsaw school' where Michal Kalecki (cf. below, § 14.8) was the leading figure, while Oskar Lange (1904-65) and Wlodzmierz Brus (b. 1921), among others, supported the development of a 'socialist market'. Among the most original contributions by Western Marxist economists we may mention publications by Paul Baran (1910-64) and Paul Sweezy (1910-2004). Baran wrote The political economy of growth (1957), an analysis of the processes of capitalistic development based on the notion of 'potential surplus' and singling
58 The idea that compulsory accumulation, after helping the industrialisation process, would lead to the Soviet Union catching up with and possibly overtaking the economic power of the United States, was widespread among Marxist economists in communist and Western countries alike, after the end of the Second World War. With the fall of the communist regimes we now see, on the contrary, that Russia had remained a largely underdeveloped country: political totalitarianism (and Stalinist terror), apart from the damage they produced in terms of civic growth, brought precious little advantage even in terms of purely economic growth.
out the reasons - in particular political and institutional factors - in different countries and epochs standing in the way of full use of productive capacities. Sweezy, a pupil of Schumpeter, was not only responsible for the previously mentioned The theory of capitalist development (1942) -still the best illustration of Marx's economic theory - but also, together with historian Leo Huberman, founded the Monthly Review in 1949. In 1966 Baran and Sweezy together published Monopoly capital, a book that, together with the writings of philosopher Herbert Marcuse (in particular One-dimensional man, published in 1956), became one of the main points of reference in the student agitation that spread from California to Paris in 1967-8, which then swept the whole world over.
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