Marx and Keynes : The Limits of the Mixed Economy

Bibliography
Baran, P. A., The Political Economy of Growth, New York, 1960. Berle, A. A., Economic Power and the Free Society, New York, 1957. Berliner, J. S., Soviet Economic Aid, New York, 1958. Bernstein, E., Evolutionary Socialism, New York, 1961. Beveridge, W. H., Full Employment in a Free Society, New York, 1945. Böhmm-Bawerk, Karl Marx and the Close of his System, New York, 1949. Bucharin, N., Ökonomik der Transformations Periode, Hamburg, 1922. Burns, A. F., The Frontiers of Economic Knowledge, Princeton, 1954. Clark, J. M., Alternative to Serfdom, New York, 1960. Crosser, P. K., State Capitalism in the Economy of the United States, New York, 1960. Denian, J. F., The Common Market, New York, 1960. Deans, V. M., New Patter... (From : Marxists.org.)

Epilogue
Marx did not envision an intermediary stage between private-enterprise capitalism and socialism. His rather clean-cut differentiation between feudalism, capitalism, and socialism made for a certain “orderliness” and “simplicity” in his revolutionary expectations. He recognized, however, that his history of the rise of capitalism pertained solely to Western Europe, and he opposed any attempt to turn it into “a general historical-philosophical theory of development valid for all nations, no matter what their historical conditions might be.” Marx, as well as Engels, allowed for courses of development different from those in Western Europe, and for a shortening of the road to socialism for pre-capitalist nations, in the wake of successful proletarian revolutions in the West. They recognized the state-capitalist tendencies in developed capitalist nations as indications of the coming socialist revolution without fore... (From : Marxists.org.)

Chapter 22 : Value and Socialism
Lenin’s Marxism did not express the practical necessities of the modern international, anti-capitalist class struggle, but was determined by conditions specific to Russia. Russia required not so much the emancipation as the creation of an industrial proletariat, and not so much the end of capital accumulation as its acceleration. The Bolsheviks overthrew Czarism and the Russian bourgeoisie in the name of Marx and by revolutionary means, only to become themselves a dictatorial force over the workers and peasants. And this in order to lead them, eventually, by way of intensified suppression and exploitation, into socialism. Lenin’s Marxian “orthodoxy” existed only in ideological form, as the false consciousness of a non-socialist practice. When dealing with the questions of the socialist organization of the economy, Lenin’s proposals were therefore almost exclusive of a pragmatic type, and no attempt was made to relate them to Marx... (From : Marxists.org.)

Chapter 21 : Marxism and Socialism
Although often proclaimed as an established fact, the conjunction of free enterprise and government planning does not really produce a “mixed” economy. The combination of automatic market relations and conscious determination of production cannot be more than a side-by-side affair. In the course of development, one must come to dominate the other; this means the maintenance of either a competitive or a planned economy. But to avoid the transformation of the mixed economy into state-capitalism, as we have seen, it is not enough to curtail its domestic development, for it is no longer possible to consider the national in isolation from the world economy. The general trend toward state-capitalism must be halted because the continuous expansion of the one system implies the contraction of the other. And in fact the cold war which agitates the world relates not to an evolving struggle between capitalism and socialism, but to a divergence of interests between pa... (From : Marxists.org.)

Chapter 20 : State-Capitalism and The Mixed Economy
While Marx’s theory of accumulation covers the mixed economy, it seems to lose its validity for the completely-controlled capitalist economy, i.e., state-capitalism or state-socialism as represented by the so-called communist societies of the Eastern power bloc, where government decisions and economic planning determine production, distribution and development. These societies are not the product of a slow transformation from a “mixed” to a state-directed economy but are the direct outcome of war and revolution. In practice, they have continued and extended the state-directed war time economy; theoretically, they regard their activity as the realization of Marxian socialism. This is somewhat plausible because they adhere to an “orthodox” interpretation of Marxism which sees in private property relations the main, or only, condition of exploitation. Actually, the conditions which Marx expected to result in the “expropriation of capit... (From : Marxists.org.)

Money and Capital
The Keynesians see the economy as a money economy and tend to forget that it is a money-making economy. In their view money appears as a mere instrument of manipulation for turning insufficient into sufficient social production. An excessive monetary growth by way of credit expansion and deficit-financing may lead to inflation, just as credit contraction and too little money tend to be deflationary. To avoid both excesses, there must be the “right” quantity of money; and it is the government’s function to arrange for this “right quantity.” Fiscal policies are in a way also monetary policies, as they merely allocate the “right quantity” of money in the direction most conducive to economic stability a... (From : Marxists.org.)

Value and Price
In order to stay in business, every capitalist entrepreneur must strive for the largest possible amount of surplus-labor; for only by achieving this maximum can he maximize the profits he can realize through market prices. This profit maximum is only partly determined by his own exertions in maintaining or raising the rate of exploitation; it is co-determined by similar exertions on the part of all other capitalists. To increase the profitability of any particular capital, the profitability of total social capital must be in creased, for otherwise there would be no way of realizing the increased appropriation of surplus-labor as profits in the market. Since surplus-labor in the form of commodities falls outside the capital-labor relationshi... (From : Marxists.org.)

Accumulation and the Falling Rate of Profit
Marx was not particularly interested in demonstrating the viability of anarchic capitalism. His concern with the law of value relates to his “ultimate aim to lay bare the economic laws of motion of modern society.” The best points in Capital, Marx wrote to Engels, “are 1) the twofold character of labor, according to whether it is expressed in use-value or exchange-value (all understanding of the facts depends upon this); and, 2) the treatment of surplus-value independently of its particular forms of profit, interest, groundrent, etc.” The twofold character of labor-power is, of course, the equivalent of the social relations of capital production as a production of surplus-value. And the independent treatment of surpl... (From : Marxists.org.)

Capitalism in Crisis
Because of the fetishistic character of capital production, the capitalist system in all its phases and in all its details may in a way be considered to be in a “permanent” condition of crisis. Depression is a precondition for prosperity; prosperity comes to an end in a new depression. They are, so to speak, two sides of the same coin. Since capitalists operate as individual concerns in a social production of world-wide scope, and are not able to comprehend the real possibilities and limitations of the “system as a whole,” over-expansion in some spheres of production, or in some nations, may lead to over-expansion in other industries and nations and may finally affect the world at large. Both the force of competition... (From : Marxists.org.)

The Imperialist Imperative
Marx’s model of capital accumulation represents a closed homogenous system in which the rising organic composition of capital results in a fall of the rate of profit and therewith in the decline of capital expansion whenever the conditions of production do not allow for a sufficient rise in the rate of exploitation. But capitalism is not a closed system: it is able to slacken the rising organic composition of capital through its outward extension and to better its rentability through importation of profits from abroad. It is the value-expansion of the existing centralized capital, however, which determines the size as well as the character of the world market, and which limits the capitalization of underdeveloped nations to serve the ... (From : Marxists.org.)