One of the by-products of the current resurgence in the class struggle has been an increasing concern to develop and criticise Marxist Theory. Consequently, many old dogmas fostered by the left are beginning to wane. But theoretical battles are not won automatically; an intensive and deliberate struggle for the development of Marxist Theory is a prime necessity.
The International Socialism group has proclaimed two major shibboleths, the theory of state capitalism and the theory of the permanent arms economy. During recent months the latter theory has faced criticism from inside, as well as outside, the IS group. As testimony to the level on which the dispute has been conducted by the IS leadership, so far they have continually delayed publishing D. Yaffe's important article on the subject in their theoretical journal. Yaffe raises a number of significant points, but on the whole our analysis differs in a number of important respects.
Analysis of the theory has not only been inhibited by censorship. The failure of the IS leadership to produce an adequate and rigorous statement of their theory for over a decade and a half, despite the fact that they have preached on the role of arms from many a pulpit, impairs any full debate on the nature of modern capitalism.
POSTULATES OF THE IS THEORY
About fifteen years ago T. Cliff produced a short article on the economic effects of arms production.(1) His argument was clearly based upon the underconsumptionist notion of crisis, backed up by a quotation from Marx. According to Cliff, capitalist crises arise because a greater and greater proportion of the social income falls into the hands of the capitalist class; and this is devoted to the accumulation of capital. As this productive potential is amassed. after a period of time accumulation leads to the relative overproduction of consumer goods.(2)
The effect of the arms budget is to generate a number of workers' incomes, partly from the arms industry itself, and partly from the consumer and service industries required to meet this increased demand. This increase in purchasing power, Cliff asserts, temporarily alleviates the crisis of "overproduction" and prevents violent recessions in the economy.
Cliff provides a number of reasons why arms production, rather than any other government expenditure, is the most effective stabiliser of modern capitalism: it does not compete with private interests, it maintains the level of production of heavy industry which is otherwise more subject to severe fluctuations, it does not add to the productive capacity of capitalism or the output of mass consumer goods, it is an important factor in the defence and extension of capitalist markets, and finally all major countries are forced to enter the arms race and bear the economic disadvantages, as well as the advantages.
Having briefly expounded on the stabilising effects of arms production, Cliff proceeds to list the consequent economic and social difficulties. He suggests that arms production may stimulate an advance in production technique, which in turn would require a greater proportion of the national to be spent on armaments. In this situation the capitalist class would face the choice of either increasing arms expenditure and risking social unrest, or reducing it and falling into a slump. In addition Cliff suggests that the pressure of world competition could force the capitalist class to reduce arms expenditure.
Despite the fact that Cliff makes many sensible assertions, his theory is based upon the dubious notion of underconsumption; and it is not integrated into the tradition of Marxist economic theory. The rate of profit is not mentioned, or Marx's basic theory of capitalist crisis: 'the law of the falling tendency of the rate of profit'. It is not a Marxist approach that is evident from the work, it is permeated with J.M. Keynes' theory of effective demand. It was the latter economist, not Marx, who suggested that planned government expenditure could rid capitalism of severe slump and high unemployment.
Another statement of the theory was presented by M. Kidron only a few years ago.(3) Unlike Cliff, this writer tries to relate his theory to the rate of profit, although the underconsumptionist aspect still stands supreme.
The new argument that Kidron develops is concerned with the effect of arms production on the formation of the general rate of profit in the economy. (The general rate of profit is the Marxist term for the resultant rate of profit in the economy after it has been equalised in every sector.) In the third volume of Capital Marx argues that the general rate of profit is formed by considering the social capital as a whole, hence in Marx's model all sectors of production play a part in determining the general rate of profit. In contradistinction, Kidron adduces the arguments of L. von Bortkiewicz(4) and P. Sraffa(5) that the conditions of production in the "luxury" sector play no part in determining the general rate of profit, and as arms do not enter into the production of any other commodity, they can be considered as "luxuries". Kidron then asserts that the average organic composition of capital in the economy can increase as a result of arms production, without any decline in the rate of profit. (For a discussion of the concept of the organic composition of capital, see Appendix 1.) In this way arms production averts any crisis due to a rising organic composition of capital, which in other circumstances would cause a decline in the rate of profit, and capitalism is stabilised.
Kidron's theory is considerably confused, and as a result, a great deal of confusion has been perpetrated. Much of this stems from the inadequate development of Marxist economic theory, so we must devote considerable space to this aspect.
But first we shall deal with the real cornerstone of the theory —the notion of underconsumption.
THEORIES OF UNDERCONSUMPTION
Rosa Luxemburg was one of the first Marxists to develop a theory of underconsumption.(6) She argued that the capitalist system depends upon remnants of other non-capitalist forms of production for its survival. In particular these non-capitalist societies provide markets for goods produced in capitalist economies. As capitalism extends its own power and influence, especially through the use of militarism and war, it destroys the very elements upon which its survival depends. As all other forms of production are crushed, and capital gains universal power, the system breaks down as a result of its own inherent difficulties in the sphere of the circulation of commodities.
Her argument, however, has a dubious foundation. It is based upon her erroneous assertion that unadulterated capitalist reproduction is impossible, even in theory.(7) Her assertion flows from several serious mistakes: she makes some crucial arithmetic errors,(8) and, as Bukharin pointed out(9) she misunderstands the process of expanded reproduction and assumes that an increase in the value of labour-power does not affect the basic condition of expanded reproduction.
The central thread running through Rosa Luxemburg's analysis is that she shifts attention from the process of production and concentrates on the problems of circulation. Unlike Marx, who thought that the crisis of the capitalist system was rooted in its relations of production, she argues that the process of circulation is decisive. And this is the central element in all theories of underconsumption; they break the connection between production and circulation and regard them as independent processes.
The error is displayed in the crude underconsumption theory, which suggests that since the workers receive as wages only part of the new value they produce, the development of the market always falls behind the scale of production. Such an argument is not uncommon on the Marxist left. Proponents of this theory forget that the surplus can be disposed of by other means. The capitalists can purchase goods for their own use, or accumulate (invest) the surplus. The crude underconsumptionist view serves to demonstrate the existence of permanent overproduction and the impossibility of capitalist reproduction.
Perhaps the most popular version of the theory, however, is that presented by P.M. Sweezy.(10) He claims that the ratio 'rate of growth of output of consumption goods / rate of growth of means of production' remains approximately stable, whereas the capitalists invest in such a manner that the ratio 'rate of growth of consumption / rate of growth of means of production' steadily declines. It follows that there would be a tendency for consumption to lag behind the production of consumer goods, resulting in overproduction and crisis.
In addition, Sweezy produces a second, mathematical, argument for underconsumption, based on the work of Otto Bauer. His thesis rests on the assumptions that there is a steady increase in savings as a proportion of incomes, and that capitalists' income as a proportion of total income also increases.
What is the empirical justification for these assumptions?
Firstly, several sets of data indicate that the ratio 'rate of growth of output of consumption goods / rate of growth of means of production' has not remained stable, on the contrary it has clearly declined.(11) The output of means of production has grown at a much faster rate than the output of consumption goods. Sweezy's first formulation of a theory of underconsumption falls like a house of cards, as the first assumption is refuted by the facts.
Secondly, empirical evidence does not confirm the assumption that savings as a proportion of total income have increased.(12) Furthermore, this is a highly unrealistic and rigid assumption.
Lack of empirical verification, however, is not the only fault of underconsumption theory. It is also completely unsound from the methodological point of view.
There is no doubt that the phenomenon of unsalable stocks of goods is evident in all serious capitalist crises. But is there a long term trend towards the accumulation of unsalable stocks? The question must be answered in the negative, since, during a boom most commodities are in short supply. Production and consumption interact during the trade cycle; in part, one determines the other, whereas Sweezy and the other underconsumptionists characteristically break the ties between production and consumption.
Thirdly, if overproduction is associated with crises, that does not prove that underconsumption is their cause. In reality it is largely a result. Marx asserts repeatedly throughout Capital that capitalist crises are rooted in the [illegible] of production that constitute the essence of capitalist production. The whole revolutionary content of Capital rests on the assertion that capitalism contains its own cause of crisis: "The real barrier of capitalist production is capital itself."(14)
In the Marxist sense, capital is a social relation, and as underconsumption theory is not rooted in this relation it must be discarded, for methodological reasons, as the essential cause of capitalist crisis.
THE RELEVANCE OF THE TRANSFORMATION PROBLEM
We shall now turn to Kidron's major argument; that the arms sector of production plays no part in forming the general rate of profit. To consider this we must deal with the transformation problem.
A great deal of the confusion over the transformation problem arises from the fact that different authors have different views of what the problem actually is. All authors agree that it deals with the issue of comparing values with prices in circumstances where they cannot be equal. They all agree that for the purposes of illustration it is permissible to assume that the rate of profit is equal in every firm. But they cannot agree if it is justifiable, or even necessary, to assume that the economy is in equilibrium, and if so precisely what type of equilibrium?
Let us first consider Marx's solution: In the third volume of Capital Marx presents us with examples of different sectors of production with different organic compositions of capital. The crucial assumption that Marx makes is to consider the whole economy as "a single total capital".(15) This assumption seems reasonable, but Marx supplies no justification for it. In fact, elsewhere, Marx repeatedly asserts that capital cannot exist except in the form of a number of separate capitals. From Marx's assumption it follows the general rate of profit (the actual rate of profit formed after it has been equalised between sectors of the economy) is equal to the average rate of profit for the whole economy.
The prices of production are then formed by distributing the surplus value amongst the sectors of the economy in proportion to the size of their capitals, that is in proportion to the total constant and variable capital invested.
With these assumptions it follows that total value is equal to total price of all commodities. However, Marx supplies no reasons why this equality should hold. His assumptions must be regarded as being convenient, but not necessarily valid.
What is the snag in Marx's solution to the transformation problem? Let us consider the next production cycle, after prices and profits have been determined in the manner described above. The rate of profit, especially from the capitalists' point of view, will not be conceived of in terms of value but as a ratio between prices. Hence, during the next time period, the relative prices of production of different commodities will enter into the computation of the rate of profit. This refutes Marx's method of computing the rate of profit in terms of its average value composition. Marx's solution is not an equilibrium solution, for prices will change in a disproportional manner from one production period to the next.
E. Mandel(16) has put forward an example of the transformation of values into prices, based upon Marx's solution, which suffers from all the forementioned defects. In addition, the solution imposes arbitrary changes in prices, and the organic composition of capital, in the different sectors. Mandel, in defending Marx, has failed to supply an equilibrium solution to the problem.
L. von Bortkiewicz presented his solution in 1907.(17) Despite several inadequacies, his solution is essentially an equilibrium solution, because the prices of each unit of embodied labour remain constant. It is not necessary to deal with his solution in detail, but the important advance he makes is to define the rate of profit in terms of prices, whilst the rate of exploitation and the organic composition of capital remain defined in terms of values. Bortkiewicz's solution thus expresses the dichotomy and contradiction between value and price, an essential aspect of the Marxist analysis of capitalism.
An important corollary follows from Bortkiewicz's solution: the general rate of profit is not directly determined by the conditions of production in those industries which do not directly or indirectly contribute to the make-up of the real wage. In other words the organic composition of capital in the luxury and armaments industries do not directly affect the general rate of profit. From this Kidron concludes that the organic composition of capital in the armaments industry can increase without any decrease in the general rate of profit, and without creating the conditions for a crisis.
Before we examine Kidron's assertion, we must continue to discuss the validity of Bortkiewicz's solution. There are two important objections to the latter. Firstly, Bortkiewicz assumes that the economy is in simple reproduction, and secondly he excludes the cost of constant capital stock from his definition of the rate of profit. In reality, capital stock, as opposed to used up capital, or capital flow, is the largest single component of investment, and the largest single element forming the rate of profit.
A third objection, that in this solution total price does not equal total value, is based upon the same unsubstantiated and unproved assertion made in Capital. This objection can be dismissed on the grounds that the definition of the price unit is an arbitrary matter, what concerns us is the ratio between the prices of different commodities of value one unit. Also, in the real world, this assertion denies the possibility of general price inflation, without a similar increase in values.
Other writers, such as Mandel, argue that a solution to the transformation problem should contain the phenomenon of changing prices. But unless the prices all rise or fall at the same rate, or remain static, such a haphazard phenomenon cannot be included in an illustrative solution to the transformation problem for a static or expanding economy in equilibrium. However, the dynamic interrelationship between prices and values, in a situation of disequilibrium, is an important area where empirical and theoretical research is needed. The transformation problem, as we have interpreted it, covers the limited and abstract ground of economic equilibrium.
In 1948 J. Winternitz altered the Bortkiewicz transformation so that it also applied to expanded reproduction(18) thus removing one of its deficiencies.
Yaffe, Dobb(19), and May(20) have argued that none of the items in a reproduction scheme can be considered as independent of the others, and hence the conditions of production in all industries play a part in determining the general rate of profit. This is not true if constant capital stock is included in the scheme. The amount of constant capital stock in the luxury and arms sector is not dependent on the values in the other departments. In other words if the conditions of production in the other departments are defined, no feasible amount of constant capital stock in the luxury and arms sector will rule out the possibility of economic equilibrium. In general, the Bortkiewicz corollary is valid if his solution to the transformation problem is corrected.
Despite all this, Kidron's repetition of the corollary is completely irrelevant. If the general rate of profit is directly affected only by the conditions of production in those industries that are directly or indirectly involved in the production of the real wage, there is nothing to stop the organic composition of capital in those industries rising (or falling), independently of the conditions of production in the arms industry, thus causing a fall (or rise) in the rate of profit, even if an equilibrium state is maintained.
Kidron has not shown that the existence of extensive armaments production can inhibit or postpone a fall in the general rate of profit. On the contrary, new techniques of production brought into the arms sector, associated with a high organic composition of capital, are likely to diffuse into other sectors, as Kidron himself asserts(21) causing a more rapid decline in the rate of profit.(22)
ARMS PRODUCTION AND IMPERIALISM
The "Keynesian Revolution" in economic theory has been associated with a declared policy of successive British Governments since the Second World War to maintain unemployment at a low level by state expenditure. In practice, as in most of the developed capitalist countries, these expenditures have largely been devoted to armaments. For instance, in Britain 6.5 per cent, and in the USA 10 per cent, of the Gross National Product consists of military expenditures.
Cliff and Kidron offer no explanation of the motivation for this expenditure. This state of affairs can only be understood if we accept the view that since 1917, portion after portion of the world has been torn from the grip of capitalist imperialism. In these areas, non-capitalist states have been established without the scourge of capitalist overproduction and slump. The capitalist class feels threatened by the impending march of revolution which will purge these evils from more areas of the world. The maintenance of near full employment has become necessary, from the point of view of the capitalist class, to maintain their ideological dominance, and check the mass acceptance of socialist ideas.
The IS leaders suggest that the economic benefits of imperialism are expended, and that arms production has replaced imperialism as the new "stabiliser". Apart from the fact that their analysis of imperialism is not in accord with a critical analysis of the available data(23), the actual motivation for arms expenditure is ignored, instead they concentrate exclusively on the function of arms expenditure. Their methodology, therefore, bears a close resemblance to that of bourgeois social science.
Arms production is not unrelated to the historical development of imperialist capitalism, it is not a new twenty-year miracle cure for capitalism's problems. It is related to the desire to safeguard the world market from the challenge of the non-capitalist bloc and the colonial revolution. The dynamic of arms production is directly and inseparably related to imperialism.
In an attempt to bring Marxism 'up to date', Cliff and Kidron have erected a vulgar un-Marxist theory of underconsumption, and completely misunderstood the nature of the imperialist epoch in which they live. But if we reject their theory, the crucial role of arms production must not be ignored. This exposition would be inadequate if we did not examine the true role of arms in the development of modern capitalism.
ARMS PRODUCTION AND CRISIS
The recent phenomena of rapid price inflation, recurrent financial crises, and relatively high unemployment have led the IS leaders to understate the stabilizing effects of arms production. In 1968 Kidron regarded such elements of instability as a "smudge on the horizon".(24) In the lead article in International Socialism 49 (Autumn 1971) the "close of a prolonged period of stable and relatively peaceful conditions" is announced.(25)
Furthermore, an interesting change in the theory takes place. Whereas Cliff in his 1957 article(26) suggests that arms "may encourage a big advance in general technique and with it increasing pressure towards a slump", in International Socialism 46 we are told that "inventions become relatively more specialised and less useful for non-military purposes". As a result "the expansionist effect of the permanent arms economy declines over time".(27) On one hand we are told that arms production brings technological advances, (and presumably a rising organic composition of capital and a declining rate of profit) thus preparing a slump. On the other hand we are told, more recently, that after an initial impetus given to technological advance the effect wears off, restraining increases in productivity and producing a lower rate of growth. The conclusion is the same, but the theory regarding the cause is completely different. In characteristic fashion, IS theory accomplishes another zigzag, but pretends that the truth has always been known.
We suggest two reasons for this change in the theory. Firstly, the complete inability of the IS leadership to use their theory to develop a perspective for western capitalism, (witness Kidron's "smudge on the horizon" statement) has meant that they have had to alter the theory to fit the facts. And secondly, the inadequate state of their theory has led them to borrow the notion of the expansionist effects of technological advance in the immediate post-war period, from other, more eminent, Marxist economists.
What in reality, has been the effect of post-war technological innovation on the rate of profit? Unfortunately only a little empirical and theoretical research has been done, and a final answer cannot be given. However, S.H. Mage has produced some statistics for the US Economy which show a number of clear trends. This data, which is in accord with data from other sources, is partly reproduced in Appendix 2. Inspection of this data shows that there has only been a slight increase in the organic composition of capital since the War, but the rate of exploitation has declined significantly. As a result, there has been a fall in the rate of profit, mainly due to the decrease in the rate of exploitation.
It is evident that the technological advances in recent years have only promoted a slight increase in the organic composition of capital. Marx assumes, without explanation, that the advance of mechanisation and technology will bring a large increase in the organic composition of capital. This was true for the USA, at least up to 1919,(28) but it is true no longer. The reason for this, in bourgeois economic jargon, is that technical innovation has become more "capital-saving" and less "labour-saving".(29) In Marxist terms this means that the value of the constant capital involved in the production of one unit of a commodity decreases more than that of the variable capital. Hence "capital-saving" innovation can cause a fall in the organic composition of capital.
Despite many predictions and assertions, the increase in the productivity of labour has not enabled the capitalist class to increase the rate of exploitation. One thing above all has maintained this state of affairs: the existence of low unemployment levels.
There is no doubt that arms production has been the largest single direct cause of low unemployment. Furthermore, in providing a positive lower limit, or 'floor', to investment, arms production eliminated severe economic fluctuations in the past twenty years. The forces leading to depression have been checked by state expenditure: State financed incomes set a lower limit to consumption, and state promoted investment maintained a level of economic growth. By deliberate policy, an attempt was made to counterbalance any sudden reduction in private investment by an increase in investment in the state sector.
However, whilst reducing the severity of economic fluctuations, state intervention has not eliminated the trade cycle altogether, or much reduced the extent of the drop in production at the onset of a recession. Mandel has shown that in the first nine months of every periodic recession in the USA since the Second World War, industrial production dropped between 7.4 and 13.1 per cent, whereas in 1929, in the first nine months after the Great Crash, the drop in industrial production was 15.9 per cent.(30)
The continued existence of the trade cycle is largely a result of the delay in processing and producing economic data for government use. For instance, it may be several weeks before the state perceives an important drop in private investment, by which time the crisis has already gathered momentum.
In preventing severe crises arms production has also reduced the extent of the boom. For economic slump creates the very conditions for economic recovery. Unemployment tends to inhibit the struggle of the working class for better wages and conditions, and it is usually associated with a rise in the rate of exploitation and a corresponding rise in the rate of profit. The unextensive use of constant capital stock during a recession tends to lower interest rates and eventually provide another spur to economic recovery and boom.
In addition, by lowering the rate of exploitation and restricting the amount of surplus value available for accumulation, state expenditure has lowered the upper limit, or ceiling, to the rate of growth. (See Appendix 1.) The truncation of boom and slump has reduced the difference between the maximum and minimum rates of economic growth.
Arms production has also given rise to sustained high rates of currency inflation. An increase in armaments expenditures can increase the amount of purchasing power, by employing more workers, without creating an additional supply of commodities on the open market. Total income increases without a corresponding rise in the number of goods. In such a situation prices are likely to rise.
Inflation is also encouraged when the production of means of production and consumer goods fails, whilst the level of arms production is maintained. In this situation prices tend to rise because total income is declining less rapidly than the output of goods destined for the open market. As government policy usually ensures that state investment will actually increase whilst production in general declines, the inflationary effects can be exacerbated.
A highly interdependent economic system, and low unemployment in the past, have oiled the wheels of inflation set in motion by the increase in arms expenditure. The recent recession, and the increasing militancy of the working class, have not allowed the wheels to stop.
In a situation where cyclical variations are not allowed to reach their full span, the existence of persistent inflation can only lead to economic stagnation, punctuated by frequent currency crises and recessions. High rates of investment are discouraged by high interest rates, rising prices, and economic uncertainty. Arms production can only be continued at the expense of the forces working towards the recovery from stagnation. The reduction of arms production would bring the system near the abyss of severe crisis.
Mandel writes: "The dilemma confronting the state in the age of declining capitalism is the choice between crisis and inflation. The former cannot be avoided without intensifying the latter."(31)
We can start to understand the nature of the current crisis if our analysis combines the following elements: Arms production, the continuance of muffled cyclical variations, unabating inflation, and the existence of a confident working class emerging from twenty years of economic boom.
Unlike the pronouncements of the IS leaders, such an analysis will not be used to cover every eventuality. In the 1950's the theory of the permanent arms economy was used to explain the boom, in the 1970's it is used to explain the recession. Without recourse to factual data, and a concrete examination of the development of modern capitalism, such a theory is a void, a sect-badge, and an impediment to the development of a Marxist understanding of the world in which we live.
G. Hodgson
March 1972.
APPENDIX I.
A Note on the Fundamental Quantitative Ratios
We shall let,
v = variable capital,
s = surplus value,
c = constant capital flow, i.e., used up constant capital,
k = constant capital stock
The rate of exploitation is usually defined as s/v, but it is preferable, for mathematical reasons, to define it as s/(s + v). We shall let
e = s/(s+v)
where e is the rate of exploitation.
Definitions of the organic composition of capital abound, such as k/v and c/(c + v), but these are dependent on the real wage. If we interpret the organic composition of capital as 'stock of constant capital per man' in value terms, then
q = k/(s+v)
where q is the organic composition of capital. Another useful ratio would be
r = c/(s+v)
this we shall denote by the letter r.
The rate of profit, according to Marx's definition(32) is given by the following equation
p = s/(k+c+v)
where p is the rate of profit, as long as we assume that the turnover period is unity. It follows that [illegible]
Three more variables are defined as follows:
g = the rate of growth,
sa = accumulated surplus value,
a = sa/s = the rate of accumulation.
Now sa = (k + c + v)g. It follows that sa = ap.
As the maximum magnitude of the rate of accumulation is unity, when all the surplus value is accumulated, the maximum rate of growth is equal to the rate of profit in value terms.
APPENDIX II.
Data for the US Economy
The following data was prepared by S.H. Mage. The value definitions for c and q are the same as Appendix 1. The rate of profit, p, is not the general and actual rate of profit, as it is computed in value terms, but it displays a close correspondence with the latter. The actual rate of profit is denoted by p'.
Year e% q p% p'%
1900 [illegible] 3.67 10.6 12.9
1905 37.9 3.16 12.0 13.9
1910 40.9 3.18 12.9 15.8
1915 37.9 3.51 [illegible] 12.7
1920 29.6 3.65 8.1 9.6
1925 29.9 3.95 7.4 9.4
1930 30.9 4.47 6.9 9.0
1935 22.7 4.92 4.5 6.5
1940 25.6 4.09 6.3 9.6
1945 23.0 2.64 8.7 [illegible]
1950 19.8 3.45 5.7 7.9
1955 21.2 3.64 5.8 8.6
1960 19.7 4.20 4.7 6.9
It is likely that the high values of the organic composition of capital in 1930, 1935, 1940, and 1960 are attributable to underutilisation of constant capital stock. On this basis the slight upward trend in q is even less significant.
REFERENCES
1. T. Cliff, Perspectives of the Permanent War Economy, in: A Socialist Review, London 1965, pp.34-40.
2. Ibid., p.37.
3. M. Kidron, Western Capitalism Since the War, London 1968.
4. See P.M. Sweezy, The Theory of Capitalist Development, New York 1968, pp.115-125 for an effective summary.
5. P. Sraffa, The Production of Commodities by Means of Commodities, Cambridge 1960.
6. Rosa Luxemburg, The Accumulation of Capital, London 1963.
7. Ibid., pp.93-170.
8. Ibid., p.122.
9. N. Bukharin, Der Imperialismus und die Akkumulation des Kapitals, Wien-Berlin 1926, p.20. See also P. Sweezy, op. cit., pp.202-207.
10. P. Sweezy, op. cit., pp.162-189.
11. See, for instance, W.H. Shaw, in: Historical Statistics of the USA, and W.S. and E.S. Woytinsky, World Population and Production, New York 1953, pp.415-416. S. Kuznets, Capital in the American Economy, Princeton 1961, pp.91-110.
12. See S.H. Mage, The Law of the Falling Tendency of the Rate of Profit, Columbia University 1963, (otherwise unpublished), and Appendix 2. See also J.M. Gillman's data in The Falling Rate of Profit, London 1956, which is in accord with Mage's if unproductive expenditures are excluded from surplus value, in strict compliance with the Marxist definition.
13. K. Marx, Capital, Vol.3, Moscow 1962, p.245.
14. Ibid., p.154.
15. [illegible]
16. F. Mandel, Marxist Economic Theory, Vol.1, p.327.
17. See P. Sweezy, op. cit., pp.115-125.
18. J. Winternitz, Values and Prices. A Solution to the So-Called Transformation Problem, in: The Economic Journal, June 1948, pp.276-280.
19. M. Dobb, in Science and Society, No.3, 1943, p.274.
20. K. May, Value and Price of Production: a Note on Winternitz's Solution, in: The Economic Journal, December 1948, pp.596-599.
21. M. Kidron, op. cit., p.42.
22. See E. Mandel, The Inconsistencies of State Capitalism, p.6, for a slightly similar argument.
23. See H. Magdoff, The Age of Imperialism, New York 1969.
24. M. Kidron, op. cit., p.36.
25. International Socialism 49, p.1.
26. T. Cliff, op. cit., p.40.
27. International Socialism 46, p.3. See also IS 49, p.1.
28. J.M. Gillman, The Falling Rate of Profit, London 1956.
29. M. Blaug, Technical Change and Marxian Economics, in: Marx and Modern Economics, edited by D. Horowitz, London 1968.
30. E. Mandel, Marxist Economic Theory, pp.531-532. Chapter 14 is an excellent analysis of modern capitalism.
31. Ibid., p.532.
32. See, for example, Karl Marx, Capital, Vol.3, Moscow 1962, p.224.