On Michael Heinrich’s Introduction to Marx’s Capital

by Matthijs Krul on June 18, 2013

First published on Matthijs Krul ‘s blog.

The first thing to note about Michael Heinrich’s recently much-discussed An Introduction to the Three Volumes of Marx’s Capital is that it is no such thing. What Heinrich has done in this work is not give an introduction to the book for the new reader, but provide a critical summary of its contents seen from the point of view of the so-called ‘new critique’, also heinrichknown as the ‘value-form’ analysis of Marxism. This particular analysis focuses, as Heinrich says in the introduction, on a particular interpretation of Marx’s value theory. This is not illegitimate: there are various major interpretations of Marx’s value theory, not least because of its complexity and opacity, and it makes sense for an author to be clear about his or her commitments to a particular one so that the reader knows what is going on. However, throughout the book the structure of the argument is more often than not polemical, explicitly or implicitly, against rival interpretations of Marx – both the attempts to make Marxism into a more general theory than Heinrich finds warranted, which he describes as “worldview Marxism” or “traditional Marxism,” and rival interpretations of Marx’s value theory specifically. While polemicizing, however, he declines to identify any of his opponents or opposing currents by name, making the exercise both fruitless as an effective counterargument – because a newbie would not know what it was a counterargument against – and as a contribution to the debate.

Attacking opponents without naming them or explicitly citing their viewpoints is a dishonest strategy, but one sadly common in Marxist polemics, even about such seemingly abstract topics as value theory.1

The risk of such an approach is that it either agitates against straw opponents, making the author seem more convincing by arguing against views that his main interlocutors do not really hold, or that it creates any number of false dichotomies: making the author’s viewpoint seem strictly contrasting to those of others, when it is by no means certain that they cannot be compatible or reconciled. Heinrich does both of these to some extent.

Now, this may also follow somewhat from the generally philological style of argument that pervades the book, and is not a reflection on Heinrich’s ill intent or conscious deception. But it does further take away the purpose of the book as an ‘introduction’, rather suggesting it should be read more as a polemic in the form of a restatement or reinterpretation of Marx’s theories. That is of itself fair enough and happens plenty; but it would be better to explicitly advertise it as such, certainly in a time when many are newly seeking out radical understandings of economic theory and may encounter this as a guide to Marx’s magnum opus, which it simply is not. Of course, with a work of this type, one can always find any number of expressions and formulations of issues that one would have written differently. Nitpicking such things is not helpful; I will therefore not mention all of the minor points of disagreement or different emphases I would have, but outline a few of the central issues.

That aside, this is not to say there is no merit in the work as a summary of Marxist views. On the contrary, the style is as clear and accessible as the abstract subject matter will allow, and much of the analysis of Marx’s main points is systematic and clearly argued. Oddly for a theorist emphasizing Marx’s interpretation of capitalism as ultimately being about the form of social relations that prevail in such a society, Heinrich is perhaps in his best form when analyzing the workings of money, credit, and the contrasting interpretations of neoclassical economics. His explanation of the nature of credit in the capitalist system and of money as the necessary form of appearance of value are very clear, as is his presentation of Marx’s critique of the foundations of neoclassical macroeconomics: the “trinity formula”, as Marx calls it, that identifies three ‘factors of production’ (land, labor, capital) and ‘awards’ each of them income in exchange for their share in the production process (rent, wages, profit).

Heinrich masterfully shows how this is the way capitalism appears in its most concrete form, as Marx fully developed in Volume III, and how this in turn generates and supports the fetishistic idea of capital as a force that has productive power of its own, independent of the labor that actually generates all new value. Similarly, he very clearly outlines why one cannot see the credit and debt system, interest, and financial capital as mere parasitical impositions or evil outgrowths of a normal capitalism: they are fundamental parts of capitalism as a mode of production from the very start, and capitalist accumulation can barely function without them. It is not a question of the ‘evils of finance versus the good industrialists,’ or the ‘greed of the bankers’, or the social dependence created specifically by credit: it is a question of capitalism itself. In his systematic depiction of capitalism as subject to its own laws and generating its own mystifications, Heinrich excellently shows how one cannot ever have a capitalism that has its ‘good’ sides but not its bad sides.

Throughout, the emphasis on how the interpretation of capitalism’s workings is itself conditioned by the indirect and topsy-turvy mode in which it seems to be reproduced is very valuable. The fetishism of the commodities is not a question of false consciousness or of too much attachment to brands, but is the result of the independence of the competing capitals and the role of exchange as realizing the value relations central to capitalist reproduction. Heinrich keeps his eye constantly on the manifold ways in which capitalism’s social relations generate their own reified images, making them seem both natural and independent forces working through the mystical generating powers of capital and ‘entrepreneurship’, rather than being ultimately the variegated reflections and distributions of the value relations that are constantly reproduced in the sites of capitalist production.

Sometimes, in Heinrich’s emphasis on the significance of money as the independent form of value, he perhaps overemphasizes exchange somewhat. As Guglielmo Carchedi has pointed out in his critique of Heinrich, the process of exchange is a realization of what in capitalist production of commodities is potentially already present – value.2 Yet one need not share Carchedi’s desire to put this in terms of ‘dialectics’, and this is perhaps something of a terminological quibble. More important is the notion of Heinrich that value itself exists in and through the exchange of commodities – this fails to distinguish conceptually between exchange value and value, as can be seen in Heinrich’s failure to really explain how some things aren’t reproducable as commodities and yet have a price. It also poses problems for historical materialism, because it puts the primacy of value in exchange rather than production, and thereby inclines to a Smithian view of things (no doubt not intentionally). As Andrew Kliman has argued, it is exactly this failure to distinguish conceptually between value and exchange value that lies at the basis of much confusion in the non-Marxist literature (and some Marxist too) about what precisely the role of value is in relative prices.3

In the course of the book, Heinrich levels two major critiques at Marx’s theories. One is Marx’s solution to the so-called ‘transformation problem’, i.e. the conversion of values into the concrete market prices in the practice of capitalist production and exchange; the other is Marx’s identification of a tendency for the rate of profit to fall.4

Unfortunately, while getting a dig in at the competing interpreters of Marx on the former point, he says nothing more about it, instead referring to another text not under review here. So I will have to disregard that. On the second point, he produces a more systematic critique. Marx’s tendency of the rate of profit to fall rests upon the notion that as the organic composition of capital rises (the value of the means of production relative to the value of the labor-power employed) it will tend to rise faster than the rate of surplus value (the ratio of surplus value to the value of labor-power employed), mainly by the fact that capitalism tends to replace living labor with machines, and only living labor can add new value. All else being equal, the result of automation is, over time, a fall in the rate of profit. Marx identifies counter-tendencies to this – either increasing the rate of exploitation of remaining workers, or a cheapening of the means of production by productivity increases in the sector producing them – but considers these over the longer run to be weaker than the tendency itself. Heinrich argues he gives no reason for this, and proposes a mathematical solution in which the rate of profit will tend to rise.

However, this critique is not convincing. Firstly, it is not actually new: Michael Lebowitz already suggested it in a paper called “The General and the Specific in Marx’s Theory of Crisis”, written in 1982.5 There, Lebowitz suggests that Marx’s argument holds on the side of the likelihood of general increases productivity not being matched in the production of the means of production themselves – not so much because machines cannot be made with machines and productivity increase in this domain, but because the ability of capital to induce such productivity increases proportionally in agriculture, mining, and the production of other raw material inputs is limited. One barrier to capital’s expansion here is nature itself, as indeed it often is, as is more obvious than ever today.

From the other side of the coin, Heinrich’s argument has been well dealt with by Michael Roberts.6 As Roberts notes, for Heinrich’s critique to work, a capitalist tendency would have to be to increase productivity of capital by means of a declining value of constant capital (i.e., means of production, machines) employed. It is hard to imagine many situations in which this were to occur, indeed unless there was a proportionally much more dramatic increase in the productivity of the sectors producing these machines, as well as the raw materials. This is implausible in the overwhelming majority of real cases of capitalist production. Neither can this be compensated for by a rising rate of surplus value: as Roberts notes, even if wages tend towards zero and the rate of surplus value tended towards one, the relative decline in living labor will over time induce a relative decline in the rate of profit, whatever the rate of surplus value. This also underlines a point Heinrich otherwise makes well in this book: value and price are not the same, nor are surplus value and profit; the former are abstract phenomena operating on the level of capitalism as a whole, the latter are more concrete and immediately visible phenomena operating at the level of individuals.

The argument over the fall in the rate of profit may seem obscure, but it is of great significance because of its centrality to Marx’s crisis theory. Accordingly, Heinrich denies that Marx has a real crisis theory. What he means by this is that for Marx, ultimately the crises of capitalism are not only inherent to the movement of capital, but also necessary for it. I do not much agree with Heinrich’s analysis of how crisis concretely happen – he combines a classic emphasis on overproduction relative to effective demand with the impossibility of sustaining sufficient expectations of profit to make capitalists prefer investment over interest-bearing capital. These are the classic elements of Keynes’ theory of crisis, and as the current crisis demonstrates, they are not sufficient. What we have today is a situation where there is a tremendous amount of liquidity, and there is still an expanding private debt bubble sustaining consumption, and there are extremely low interest rates; and yet there is no investment. In Heinrich’s model of crisis, this should not occur.

However, he is certainly right to emphasize crises as a barrier to capital, but not as a guarantee of collapse. He is right to critique Marx’s occasionally overoptimistic interpretations of crisis as making the collapse of capitalism inevitable. Marx seems to have assumed not so much that crisis itself would bring down capitalism – in fact, the deepest moment of a crisis is the moment that the rate of profit is restored and capitalism as a system becomes healthy – but that people would, over time, come to see through the recurring crises that capitalism is an irrational and destructive system and should be gotten rid of. While it is certainly true that moments of major capitalist crises produce upsurges in revolts and in radical critiques of the social relations that prevail among us, it is simultaneously also true that crises are the moments of organizational weakness and vulnerability for unions, social movements, and working class parties, even including communal forms of collectivity. Revolutionary moments do indeed happen, but Heinrich is right to emphasize that this is not anything guaranteed by the will of history, and that nobody can yet predict where they come from or what form they will ultimately take.

One weakness however of Heinrich’s version of Marx’s economic theories is that it ultimately resolves into a purely ethical critique: if there is no tendency of the rate of profit to fall, and the limitations of capital are ultimately the Keynesian ones of demand and expectations, then crisis may appear more as a problem of capitalist management than as a moment revealing the limited potential of humanity entrapped within the capitalist frame. It is not that one can dismiss a theoretical argument by pointing to its political consequences; but Heinrich has little room for what seems to me one of Marx’s overarching ideas about capitalism, namely that its own tendency is ultimately not just to ‘create its own gravediggers’, but also to give them the tools to dig that grave: the profit system itself becomes incompatible with the development of technology, because it uses that technology against the majority of humanity instead of in its interest. This view has often been associated with the productivism of the Soviet Union, but it is one worth salvaging from the wreckage of that society, in my view. Humans must “burst the integument asunder”, and this act itself is not an ethical act against the destructiveness of capital alone, but an act of freeing human potential.

On the whole, the great strength of Heinrich’s book is the persistent emphasis on capitalism as a set of social relations, where each element plays its necessary part in the reproduction of the whole. Too often, this or that aspect of capitalism is analyzed as the problem in reformist media and politics, without real insight into why such a ‘problem’ exists or persists at all. Within Marxism, too, there has sometimes been insufficient attention to how capitalism is, as any mode of production, an all-or-nothing deal. One cannot have capitalist commodity production but do away with money, contra John Gray and others; one cannot have social planning but maintain the wage labor-capital relation, contra the Soviet leaders; and one cannot have capitalist circulation but do away with debt and financial speculation, contra much of the current reformist wisdom.

Heinrich rightly notes how Capital is an analysis of any possible capitalism, not of a particular one, and operates at that level of generality. This is why its lessons remain just as relevant today as they were in 1870, if not more so, and why the laws of motion of capital it identifies cannot be simply tinkered with within the confines of social-democratic politics. There is here a risk in Heinrich’s presentation, in that his resistance to a historical rather than a theoretical interpretation of Capital makes him present real capitalism too purely: for example, the classic ‘double freedom of the worker’ as the foundation of capitalist production is real enough, but we must never lose track of capitalism’s accumulation through slavery, indentured servitude, penal labor, debt bondage, and so forth – all forms of exploitation which, as Jairus Banaji has convincingly argued, can under particular historical circumstances be subsumed under capitalism and serve just as well the aims of its reproduction.

That said, understanding Marx’s law of value as a ‘real abstraction’ operating at the level of capitalism’s reproduction as a whole is very important, and cannot be restated often enough. It clarifies many of the confusions that arise from misunderstanding what Marx is trying to do in formulating it. Capital, Marx’s critique of political economy constitutes a critique of the foundations of the bourgeois economists’ understanding of capitalism, just as valid today as when it was written. It is a critique of how they understand this society in naturalized, technical terms, as a (mathematical) interaction between abstract individuals and abstract choices in a historical void; rather than as particular social relations with a historical origin, a logic that determines how such a way of living and producing is itself reproduced, and hopefully an end. As Heinrich says:

“Marx took aim at a central issue of the critique of political economy, namely, that the naturalization and reification of social relationships is in no way the result of a mistake by individual economists, but rather the result of an image of reality that develops independently as a result of the everyday practice of the members of bourgeois society. (…) These relations impose a certain form of rationality to which all individuals must adhere if they wish to maintain their existence within these conditions. If their actions correspond to this rationality, then the activity of individuals also reproduces the presupposed social relations.”7

If one takes one thing from Heinrich’s book, it should be this.


1) It is worth noting here that in the original German, the book is not actually called “An Introduction to Marx” at all, but rather to political economy, which gives rather a different effect. I am informed that it forms part of a series introducing different theoretical subjects within the left, produced by theorie.org, and therefore its orientation to the ongoing debates in Marxist interpretation is somewhat less contrastive. I thank the translator, Alexander Locascio, for this point.
2) Guglielmo Carchedi, Behind the Crisis: Marx’s Dialectic of Value and Knowledge (Leiden 2011), p. 73.
3) Andrew Kliman, “Marx’s Concept of Intrinsic Value”. Historical Materialism 6:1 (2000), p. 89-114.
4) I do not, contrary to many commentators on Marx’s value theory, write about a ‘law of the tendency of the rate of profit to fall’. It seems to me a ‘law of a tendency’ is either redundant or a contradiction in terms, and the main purpose of maintaining it is to puff up Marx’s scientific credentials in a rhetorical way. So I speak just of a ‘tendency’.
5) Michael Lebowitz, “The General and the Specific in Crisis”. Studies in Political Economy 7 (1982), p. 8-12.
6) http://thenextrecession.wordpress.com/2013/05/19/michael-heinrich-marxs-law-and-crisis-theory/
7) Heinrich, p. 34-35, 46.

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{ 28 comments… read them below or add one }

Jon Hoch June 18, 2013 at 12:34 pm

Oh man, wait until I show this rip-roaring piece to my coworkers. They’ll definitely become revolutionaries now!


Jon Hoch June 18, 2013 at 12:35 pm

*Sorry to be mean, but come on. Most folks aren’t going to read this kind of stuff with a gun to their head.


Douglas Lain June 18, 2013 at 6:18 pm


Maybe you can start your friends with Brendan Cooney videos and then work toward this book?



Jon Hoch June 18, 2013 at 6:30 pm

My internet is pretty unreliable at my apartment, so I’m actually unable to load the video you provide.

My basic point is this. When the Republican or Democratic parties are trying to win the people to their positions, they don’t tell people to go read Milton Friedman or Keynes or whoever it is. They probably won’t even mention these folks names. They might have a popularizers who explain the theory in really, really basic language. But more often than not they just operate with sound bites. Most folks just don’t have the time, even if they had the interest, to engage in complex academic theories. Make it simple. Make it fun.


PatrickSMcNally June 18, 2013 at 8:02 pm

There are giant think-tanks like the Cato Institute which churn reams of academic papers on the free market and what not. Sure, you can argue that large numbers of Rush Limbaugh listeners never actually read that stuff. But this is definitely one significant component of how ideas are promoted through society which lead to mobilizing forces for the Republican and Democratic candidates. It’s true that any Left-wing needs to be aware of its lesser resources and that they can not just appeal to the Koch brothers or George Soros for heavy funding. But a bit of academic work can still have its place, regardless of what one may think of this piece specifically.


Arthur June 18, 2013 at 8:32 pm

Yes. Marx’s theory is NOT simple and is Lenin pointed out it was never understood by ANY of the “Marxist” leaders in Marx’s time.

The “simple” and “fun” stuff about economics that “Marxists” write is basically crap.

Not everyone can at this stage, but some of us do have to stud the actual science (which includes thorough study of bourgeois economics as Marx did, not just simplistic denunciation).


Jon Hoch June 18, 2013 at 8:47 pm

Like I’ve said before, I’m not anti-academic. I just think the ratio of folks who are aspiring intellectuals compared to the folks who are aspiring popularizers on the left is TOTALLY out of wack, when, if anything, the latter are more important if we hope to build a mass movement. We need our own Rush Limbaughs! hahaha. But seriously. :)


Arthur June 18, 2013 at 9:36 pm

A reason why there are so few popularizers is that the “aspiring intellectuals” haven’t done much of job producing anything to popularize.


PatrickSMcNally June 19, 2013 at 4:39 am

When there was a full-blown Great Depression on in the 1930s that climate produced people like John Steinbeck who knew how to popularize Leftist ideas. In the quarter-century after World War II the economic prosperity of First World capitalism was such that only someone who was prone to far-reaching theoretical generalizations could look around them here and see any cause for revolution. At the time of the stagflation crisis in the 1970s it looked as if this might be changing. But actually the living standards of most US workers remained high enough that many people shifted more to the Right, with a vote for Ronald Reagan in response to the 1970s crisis, rather than to the Left. The meager remains of what has existed as a US Left for these last several decades have been shaped by this and that has determined a process of natural selection whereby the better public speakers have more often gravitated towards Rupert Murdoch’s side of the aisle. As the signs of capitalist decline become more apparent, this has the potential to slowly shift as well.


Jon Hoch June 19, 2013 at 6:18 am

So basically your idea is that things have to be really shi.tty for folks to be attracted to progressive ideas. That’s depressing.


PatrickSMcNally June 19, 2013 at 6:55 am

To speak of “progressive” ideas in this context is far too vague. Dick Cheney is a progressive supporter of the right to gay marriage, the same as Barack Obama. Cheney came out with this support before Obama did. This era is actually an age of very broad progress on all non-economic issues. But for real working people to seek to turn away from capitalism specifically, as opposed to simply lobbying for better rights within the capitalist system, then, yes, there does have to be a real economic downturn. If capitalism in the USA can restore the stable prosperity which had seemed to exist for a quarter-century after WWII then there will be no Left-wing to speak of. Instead we’ll see people like George W. Bush appointing Condoleezza Rice to positions of high office that would have been impossible in the 1950s. But all of those progressive changes will happen through the Democrats and the Republicans, without any other Left-wing parties growing anywhere. If a real new political party were to grow in the future it would only be on the basis of issues which can absolutely not be addressed through the existing parties. But every single non-economic issue can be addressed through them.


Jon Hoch June 19, 2013 at 7:08 am

I’m not a big history guy (at least compared to the folks here) but didn’t the 1950s have the highest unionization rate the US has ever seen? Or am I totally making that up?


PatrickSMcNally June 19, 2013 at 7:19 am

I don’t have figures in front of me, but that sounds about right. Of course the unions of that time were riding on top of the wave of economic prosperity which followed WWII. The unions chased the more Leftist members out, but then they proceeded to strike a good deal with management at a time when management was amenable to offering benefits. Starting in the 1980s all of the major unions went through a process which was analogous to Deng’s restoration of capitalism in China. The main union leaders essentially became a new layer capitalist management and gave up much pretense of fighting for the working class. This was not just the result of an external assault on unions by Reagan. Iy reflected the massive corruption which had grown with the labor aristocracy during the booming years of US capitalism. Today capitalist management is no longer amenable to the arrangements which they had readily accepted in the 1950s. It won’t be possible to win back those arrangements of a bygone era in the way that once occurred.


Fred Welfare January 13, 2014 at 5:50 am

Reagun’s election win in 1980 may have been caused by propaganda related to the Iran crisis. It may have been due to his name, Rea-gun! Why should we assume that the vote tends in the direction of the voter’s perceived economic advantage?


Jon Hoch June 19, 2013 at 6:49 am

I mean just how great would it be if there were people talking and writing like this in the mainstream media:



Jon Hoch June 19, 2013 at 7:08 am
PatrickSMcNally June 19, 2013 at 7:10 am

Obviously that won’t likely happen since the bourgeois media has leaned towards advocating privatization for the last 4 decades. There’s no point in wishing for that to change. The more relevant issue is over at what point will the class contradictions which have been behind this wave of privatizations for the last 4 decades have reached a point such that working class organization leads to a break from the bourgeois parties which have pushed this privatization? I can’t pretend to really answer that one.


Fred Welfare January 13, 2014 at 5:56 am

George Orwell described the educational system as anti-intellectual and as game-worship. Dictatorship of the proletariat or dictatorship of the intellectuals, same thing. Campaign management is actually a technical subject even if their products or messages seem so dumb. And so is the essence of social movements a technical subject requiring the control of perceptions. At some point, we will have to start from scratch.


Fred Welfare January 13, 2014 at 2:12 am

Yes they do, in addition to the usual spate of ad hominems, politicians spell out their platform as ‘what I will do if elected,’ or ‘what I stand for.’ They intend to address multiple segments of the voting population with their statements. So, politicians will spit out terms like socialism, monetarism, liberalism, democracy, etc with some concern for theoretical reference because this will improve their perceived “integrity,” and not only for its emotional effect.


Matthijs Krul June 24, 2013 at 1:18 am

This is a book review, not a popular introduction to why capitalism sucks. I don’t really see the point of this criticism.


Thomas Weiß June 25, 2013 at 6:13 pm

(1) Nature might be a barrier for capital and a reason for the rate of profit to fall – as David Ricardo pointed out -, but Marx himself claims, volume III, against Ricardo, that capitalism can overcome these natural barriers, with chemistry (“Justus von Liebig”), for instance.
(2) It is enough to assume, that productivity of labour in department I and department II rises at the same rate. This makes possible a steady-state growth of the economy as described in bourgeois text books or by neo-Ricardian models, with a constant steady state rate of growth of employment, capital intensity, wages per worker etc..
(3) Finally, what is wrong with Michael Heinrich’s reasoning is, that he thinks that one can abstract from fixed capital. Taking long enough periods of observation makes all fixed capital “circulating”. (I you look at five year intervals the ovens of bakers are not anymore fixed but circulating capital, because they have a live span less than five years, so the reasoning of Michael Heinrich). Now Marx’s law is based on the dynamics connected with the competitive accumulation of fixed capital. If one abstracts from that, the law indeed becomes difficult to be defended, see the Okishio theorem, which Heinrich supports, for a proof against the law – Okishio, however, abstracted from fixed capital.


Arthur June 26, 2013 at 10:36 am

Hi Thomas, I haven’t read Heinrich’s book yet but will comment anyway.

1. Agree re nature. Marx was directly opposed to currently dominant green/Malthusian views.

2. Growth at same rate would mean organic composition not growing. Consider toy model with fixed labor force and static technology. BUT there are many different techniques, some more labor intensive than others. Initially, labor intensive techniques are used. The others are less profitable with low wages and high rate of profit. As accumulation proceeds, wages are driven up and profit rates are driven down and more labor intensive techniques are replaced with less labor intensive techniques. These all go together so you cannot have accumulation in this toy model without increasing organic composition and falling rate of profit. It is totally connected to transition to less labor intensive techniques EVEN WHEN THEY ARE NOT “NEW” TECHNOLOGY but have only become relatively cheaper because of changes in wages and rates of return. This is sufficient for a falling rate of profit. Actual increasing population and dynamic technology merely adds detail to this underlying necessity.

3. Above is the problem with Okishio, not abstraction from fixed capital. No direct connection between above and periodic crises. Periodic crises more closely related to fixed capital but better described in terms of relative compositions of the departments. You (and Heinrichs) should find the account in Pavel Maksakovsky’s “The Capitalist Cycle” very interesting:




Thomas Weiß June 26, 2013 at 2:25 pm

ad 2: to repeat, simple bourgeois or neo-ricardian steady state growth models with all variables growing with the same rate and some relations staying constant for that reason indeed assume, translated into labour values, that there is no rise in the organic composition of capital for the simple reason that the countervailing tendency of constant capital becoming cheaper balances the rise in the technical composition of capital. In addition, wages rise with labour productivity, so the rate of surplus is constant too.
I do not say that these models embody truth, but I say against Matthijs Krul and you, that such a scenario does not need strange assumptions. This does not rule out, that there are much better scenarios in terms of Marxist theory. By the way contra Matthijs Krul Heinrich never claimed to be the first one, he simply explains old stories and controversies to new readers of Marxism.


Arthur June 26, 2013 at 4:31 pm

The “steady state” model you describe DOES involve strange assumptions – basically a magical process of steady development with no mechanism.

The “toy” model I described has NO strange assumptions. It is based on a simplified abstraction (“toy model”) of an actual mechanism that must underly accumulation in the real word.


Thomas Weiß June 26, 2013 at 4:59 pm

Well, we might now not be talking anymore about Matthijs Krul book. You say: “As accumulation proceeds, wages are driven up and profit rates are driven down and more labor intensive techniques are replaced with less labor intensive techniques.” Well, that is the David Ricardo interpretation of the fall of the rate of profit due to rising wages – a view critisised by Marx, for whom some technical tendency for a growing technical composition of capital, which is not fully overcome by a cheapening of constant capital, therefore a rising organic composition of capital results. This is exactly, what Heinrich and predecessors like Okishio put into question.


Arthur June 26, 2013 at 6:31 pm

No, Ricardo had the opposite. His understanding of accumulation had land as a barrier. Wages pushed up and profits down with more labor intensive techniques due to declining returns to land. Marx and my toy version have capital itelf as a barrier – a direct connection between accumulation with less labor intensive techniques (higher organic composition) and lower rate of profit together with both higher profits and higher wages. No “magic”, simply the only way accumulation can occur when there are still less labor intensive techniques available but too expensive at current wages and rates of return (as is always the case – no market for capital investment without capital deepening).


Fred Welfare January 13, 2014 at 6:03 am

Hayek understood the entire process as calculated from the start: the diminishing rate of profit was built into the initial price which was structured according to region and temporal frame, certain groups will pay more, remaining product can be sold cheaper.


Fred Welfare January 13, 2014 at 2:26 am

There are two issues which were not addressed which seem critical to me: the role of the military and its budget, and the role of sexual reproduction. In Pat Buchanan’s late 1990’s, he ran for President on the Reform Party ticket which was conservative, monetarist economics, but opposed to military excursions and its bloated budget. Although actually supported by the Socialist Party and by Right to Life Party, he garnered less than 1% of the vote. Obviously, his position with respect to the military doomed him. This should lead to some explanation especially when the US military is as deeply implicated in American society and technological production. The second issue of sexual reproduction is simply why produce offspring who are condemned to one of the inferior social classes? Are the workers hoodwinked into selling their labor for lousy wages and into reproducing offspring who will also be subject to such conditions?


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