On the irrelevancy of Andrew Kliman

by Jehu

Andrew Kliman writes about the relevance of Marx’s “Capital” today; in it he highlights five aspects of the book he thinks continue to make it relevant. According to Kliman, the continuing relevancy of Capital depends on five things:

First, Capital is a “stripped down” description of the capitalist mode of production, not a complete and final description of capitalist society. Second, the book not only critiques bourgeois economics but many of the most popular alternatives offered by radicals of its time. Third,  capitalism, as described in Capital, is an autonomous, self-acting, process in which “those in power” aren’t really in control of the process. The fourth point is that Capital explains a process where the ‘rules’ of commodity production continue to hold in for the total national capital, even if these rules are violated in particular cases. The fifth and final point is that Capital shows technological improvement tends to reduce the profitability of investment.

Since Andrew Kliman is almost always wrong about everything he discusses of Marx’s theory, it is no surprise to me that he is wrong about the book, Capital, as well. Kliman completely misses the true significance and relevancy of Capital, because he really has no idea why the book remains relevant today.

In first place, Capital, unlike any other book on the mode of production, explains in detail Marx’s theory that capitalism is, as Marx puts it, “only a historical mode of production corresponding to a definite limited epoch in the development of the material requirements of production.” Which is to say, capitalism has a definite shelf-life, a limit beyond which it, as a blind process, cannot continue indefinitely. This limitation is not determined by any external force, but arises solely from the process of capitalist production itself.

In answer to the persistent question of some Marxists, Yes, the collapse of capitalism is inevitable and requires no action on the part of the working class. The idea, so popular among some Marxists, that the demise of capitalism requires a proletarian political revolution to bring it down is a myth story whose persistence must indeed be explained but which was never a part of Marx’s original theory.

How Kliman botched the transformation problem

One of the more interesting points that illustrates the continuing relevancy of Marx’s theory is explained by the so-called ‘transformation’ of labor values into capitalist prices of production. Of this problem, Kliman writes:

“Because of the long-standing myth that his account has been proven logically inconsistent, as well as the technical, mathematical character of the alleged proofs of inconsistency and of the bewildering array of so-called “solutions” to “the transformation problem”––i.e., efforts to “correct” the alleged inconsistency––the topic is frequently mocked and dismissed as abstruse and unimportant.”

Kliman’s lack of understanding of Marx’s theory is on full display here.

There are actually two questions here that Kliman incorrectly treats as one. First, there is a long standing debate over whether Marx successfully demonstrated how simple labor value are transforms into capitalist prices of production. Most people who have given serious attention to this issue, among them, the former SYRIZA finance minister, Yanis Varoufakis, as well as mainstream economists like Nobel Prize winner Paul A. Samuelson, argue Marx did not successfully demonstrate this; while a very small group of Marxist economists like Kliman argue Marx did, in fact, successfully demonstrate it.

However this silly debate conceals a second, more important question: Did Marx ever intend to demonstrate how labor values are transformed into capitalist prices of production? I think Marx never intended to demonstrate this transformation, but always intended to make another, more important, point; namely, that the formation of capitalist production prices violate the law of value, of simple commodity production and exchange.

This question takes me back to my first point: If Marx’s fundamental argument in Capital is that capitalism has a limited shelf-life, that the mode of production leads ultimately to its own destruction; and if this destruction arises solely from the operation of the capitalist mode of production itself; and, finally, if the capitalist mode of production is simply a form of commodity production, Marx has to demonstrate conclusively how the capitalist mode of production works to undermine all commodity production, including its capitalistic form.

The collapse of capitalism is inevitable

Thus, contrary to Kliman, what Marx does in chapter 9 of volume three is to show that the inevitable collapse of capitalism is initially expressed in the growing incompatibility of capitalist prices of production with the simple labor values of commodities. While it is completely true, as Kliman asserts, “that in the economy as a whole, the total price of all the products is just equal to their total value”, it is also true that once capitalistic commodity production arises this is, of necessity, no longer true for the production prices of any commodity. The moment capitalistic production stands on its feet, the production prices of commodities no longer equal the labor values of the commodities.

Thus, Kliman is completely wrong to assert, “Nothing fundamental has changed.” What has changed is that, with the emergence of capitalist production, prices of commodities can no longer be determined by their labor values. In other words, from its inception the capitalist mode of production progressively undermines commodity production and, thus, its own premise.

To put this in more concrete, modern, terms, the collapse of the Bretton Woods agreement in 1971, and of the gold standard in general, was already prefigured in the divergence of simple labor values from capitalist prices of production at the inception of the capitalist mode. Marx could, therefore, predict with 100 percent certainty that production on the basis of exchange value (i.e., simple commodity production) would collapse.

Capital remains relevant today because it remains the only theory that can explain what happened in 1971; and why what happened in 1971 was both inevitable and a forewarning of the final collapse of the entire mode of production.