Ernest Mandel's Marxist Economic Theory (2 vols.) translated by Brian Pearce and published by Merlin Books, £4 4s, from Pioneer Book Service, 8 Toynbee Street, London E.1.
The publication of Mandel's work on Marxist Economic Theory in English is a valuable addition to our arsenal of theoretical weapons against capitalism. It is particularly welcome to British Trotskyists, where most of the little work that has been done in the direction of socialist economics has been at the hands of state capitalists or members of the Communist Party. Mandel reconstitutes the Marxist system in a historical framework that goes back to the beginnings of organised society and forward to an analysis of the transitional economies and of socialism. His method is a truly dialectical one—he explains what capitalism is by examining it in the context of what it is not. As he tells us, the great advantage of Marxian economics over other schools of economic thought is that it contains a dynamic synthesis of economic theory and economic history. This synthesis is completely lacking from bourgeois economics today, which has no past but which focuses all its attention on the brute task of keeping the system going. The method of a Marxist must be "genetico-evolutionary, critical, materialistic and dialectical, genetico-evolutionary because the secret of no 'category' (1) can be discovered without study both of its origin and its evolution, which is nothing else but the development of its inner contradictions, that is to say, the revelation of its true nature." The book flows quite correctly far beyond the narrow confines within which the bourgeoisie would pen economics, into the realms of anthropology, sociology and social psychology. In the introduction Mandel specifically states that he believes the correct method was not to rehash the quotes of the masters but to reconstruct Marx's ideas "on the basis of the scientific data of contemporary science". One of the great virtues of the work is that it is much more than a simple work of economic history. It is a theoretical work and a self-conscious one, considering its own methodology.
Any work on Marx's economics produced today must be considered in the light of how it copes with the major political developments since Marx's time. This century has seen the rise of revolution in the underdeveloped countries and the forcible removal of a large chunk of the world from the sphere of Capital. It will be seen from Mandel's book and more especially from the various critiques of it that only someone thoroughly grounded in the realities of internationalism will be equipped to undertake this task. To consider just the developed countries will lead one to revise Marxist theory in a petit-bourgeois nationalist direction. Only at the world historical level can a genuine theory of the proletariat be worked out, for any other approach will lead one to confuse what is essential with what is incidental in one's environment in the manner of the state capitalists. Mandel combats the Menshevik misinterpretations of Marx, which the world communist movement must accept a large responsibility for propagating, the crude theory of stages, where revolutionaries are displaced from the dynamic of history: "It remains true that the attempt we have made to 'de-Westernise' the material, except that relating to nineteenth-century capitalism, that is to say, to discover the common features of pre-capitalist economic categories in all the civilisations which have reached the stage of developed international trade, may—[illegible]... Nevertheless, [it is] indispensable, both because [illegible] essentially a Western public, and also because the popularisers of Marxism have brought a tremendous confusion into this sphere with their theory of the 'successive stages' that society is supposed to have passed through, or must necessarily pass through, in all parts of the world, a theory which was explicitly repudiated by Marx himself (see especially his letters to the Otechestvennie Zapiski, November 1877, and to Vera Zasulich, 8th March [illegible])."
The first volume of Mandel's work deals with the basic economic categories in the order of their social appearance. He traces the origin of the first surplus, the introduction of the division of labour, the use of money and trade through to the age of petty commodity production and capitalism proper. Despite the erudition evidenced by the length of the bibliographies attached to each chapter, the work remains eminently readable, even for someone whose prior knowledge of economics is somewhat rudimentary. An idea of the structure of the larger work can be gained by an examination of a pamphlet of Mandel's, An Introduction to Marxist Economic Theory). This pamphlet contains a section on neocapitalism which is particularly interesting and has the added advantage of being written several years after the larger work. Particularly important in the first volume is Mandel's treatment of the concept of surplus. He distinguishes the necessary product of a society from the surplus product. The real political question to be answered is how a society shall use its surplus, who shall it benefit. His section in Chapter 1 on "Is there an economic surplus?" (4) is a useful antidote to a lot of attempts at mystification on the part of the bourgeoisie as to the nature of the problems of the Third World. Central to Marx's ideas was an investigation into the nature of value. It is important not to confuse the physical properties of objects with their values. Mandel deals at length with the appearance of value and its nature. He follows this analysis through the two volumes, to situate the ideas of value and price in their historical context, to give an idea of the forces which held these phenomena in place and the situation in which it will disappear. In the chapter on "Money, Capital and Surplus Value" the reader should take note of the section on the Law of Uneven Development. "To reduce economic history to a series of stages or to the successive appearance of 'categories' is to make it excessively mechanical, to the point of rendering it unrecognisable. But to eliminate from historical study an allusion to successive stages of economic organisation and any reference to the progressive appearance of these 'categories' is to make it merely incomprehensible." (5)
Two especially interesting chapters in the first volume are Chapter 5 on the contradictions of capitalism and the final chapter on periodical crises. These two chapters between them contain much of the guts of Marx's system. The second volume brings the work into the present day, discussing the decline of the capitalist system, monopolies and imperialism and the appearance of the transitional economics. Mandel stands very firmly on the position that we do live in the age of wars and revolution. There can be no way out for the capitalist system and he is no friend of the people who attempts to pretend that there is. Progressively, it becomes harder for the capitalist to maintain his rate of profit. His absolute amount of profits may well go up, but it will become less and less worthwhile to invest. The source of profit is to be found in human labour because labour has a dual nature. It not only produces enough value to reproduce itself, but extra value, surplus value, which can be appropriated by the capitalist and turned into capital. Capitalists through competition will be forced to accumulate or be swallowed up by other capitalists. As they accumulate, however, the amount of depreciation or amount of value represented by reproducing their capital will continually increase. The result of this increase will be to lower the portion of price represented by living labour and the rate of profit must go down. There will be many factors which will delay the operation of this process. Capital will flow throughout the world, breaking down all boundaries in search of higher profits in the age of imperialism. Capital today, however, has lost a large portion of the world. It can no longer freely flow in and out of the workers' states. The system is at heart an anarchic system. It does not adjust in a rational manner, but by crises, when values are liquidated to reduce the concentration of capital. Extremely important is the attempt to keep clear the distinction between physical and value relationships. It is the latter, value relations, which are responsible for the dynamic of capitalism. The very anarchic nature of the system makes it so. In the era of monopoly capital "monopolisation" does not only intensify all the classic contradictions of capitalism, however—it also adds some new ones. To the fundamental class contradiction between the proletariat and the bourgeoisie there is added, in the age of monopoly, the contradiction between the colonial and semi-colonial peoples, on the one hand, whose poverty and economic backwardness constitute the main source of superprofits for the monopolies, and the big metropolitan bourgeoisies on the other." The capitalist system becomes increasingly a bigger fetter on the productive abilities of mankind and its parasitic character "explodes in the world's face in a new epoch of history, filled with convulsions: the age of capitalist decline, the age of war, revolutions and counter-revolutions." Since the second world war, crises have begun as sharply as the 1929 crisis, but capitalism through the intervention of the state in economic life has succeeded in reducing cyclical fluctuations (Chapter 14, "The Epoch of Capitalist Decline"). The choice for the state has been between crisis and inflation. Crisis would be politically untenable for capitalism, but on the other hand inflation itself creates grave hindrances to the normal functioning of the capitalist economy. The bourgeoisie is forced to turn to planning and to recognise the de facto socialisation of economic life. Its use of planning as an efficient agent of economic progress is impeded by its restriction within the confines dictated by the profit motive. In the long run "the slow devaluation of the currency brings about that very long-term stagnation that the system was initially trying to escape". (7)
Mandel sees the Soviet economy in a crisis too, but a crisis of a very different nature and origin to that affecting the capitalist economies. Bureaucratically centralised planning succeeded in creating the heavy infrastructure of the Russian economy, albeit with losses and wastage that need not have occurred. The Left Opposition favoured rapid industrialisation to be able to satisfy the peasants' demands for manufactured consumer goods. Having opposed this policy, supposedly in the interests of the peasants, after 1928 "the leading faction of the Bolshevik Party ... went from one extreme to the other ... Superindustrialisation of the country at the expense of the peasants was carried out on a scale that the Opposition had never conceived. Thereby the Soviet people were called upon to pay a terrible tribute in order to make rapid industrialisation possible, a tribute which could have been avoided." (8) Soviet planning, however, despite the bureaucratic distortions, is still real planning. "Elements of anarchy continue... but their role is precisely comparable to that of the elements of 'planning' in capitalist economy." The world capitalist economy is a whole and a crisis in one part will be reflected throughout the whole. The Soviet economy is exempt from these fluctuations. It still has some links with the capitalist market, but these are not essential to its operation. It is not linked with the capitalist pricing system in an organic fashion. The system of dead labour incorporated in the capitalist world system has been appropriated by the Russian people and their state remains a workers' state, although a very degenerated one. It will do so while the economy continues to be centrally planned. The real dilemma the bureaucrats face is that to build more than an infrastructure, to deal with complex modern industries such as computers and electronics, costs must be taken into account. The bureaucrats operate in their own caste interests. The central contradiction is between a noncapitalist mode of production and bourgeois norms of distribution. The only way forward is for a political revolution to put power in the hands of the workers with a system of universal workers' control, which could produce a real economic plan, reflecting the needs and desires of the Russian people. The bureaucrats, however, can only make one sterile turn after another in an attempt to prevent the rate of growth from stagnating and to fulfil the plan. The section on the Soviet economy can be best read in conjunction with Mandel's reply to Kidron's review in [illegible] (9) in a pamphlet called The Inconsistencies of State Capitalism which enters a detailed discussion of the nature of the bureaucracy and possible developments within it.
In Mandel's last chapter, he gives a history of economic thought, "The origin, rise and withering away of political economy". (10) This is a particularly useful section for comrades working in the academic sphere, who need to construct a course critique of social science courses. For the movement as a whole, one cannot stress too strongly the need for its day-to-day theoretical work to be thoroughly imbued with a grasp of the principles of Marx's economics. It is his economic system that gives Marxism its right to be considered as a science. It is in defence of that status that the Fourth International fights in its theoretical work against any petit-bourgeois tendency to emasculate Marxism by removing its true critical content, its world view, and to pragmatise it. Only a thorough-going internationalist can aspire to write a book about the real developments in the world economy. Mandel's book gives the lie to the neutral status which the bourgeois social scientists so much love to assume. Economists, like it or not, are committed economists, they serve one class or another. The proletariat fighting for power must have a world view of its role. It must appreciate what the forces of history are and what that role is. Mandel's book is a worthy contribution to the construction of that world view in the twentieth century.
David Kendall
(1) Mandel, Marxist Economic Theory, p.18.
(2) Ibid, p.20.
(3) Mandel, An Introduction to Marxist Economic Theory, 8/64. (plus 6d p&p.) from Pioneer Book Service.
(4) Mandel, Marxist Economic Theory, p.42.
(5) Ibid, p.91.
(6) Ibid, p.437.
(7) Ibid, p.542.
(8) Ibid, p.553.
(9) [illegible]. Kidron, Maginot Marxism, Mandel's Economics. See also 541.
(10) Mandel, The Inconsistencies of State Capitalism. 4/- (plus 6d p&p.) from Pioneer Book Service.
(11) Ibid, p.690.