Marxian economic theory applicability, true or false?

Topics: Capitalism, Neoclassical economics, Economics Pages: 6 (2518 words) Published: April 27, 2014
Marxian economic theory applicability, true or false?
Marx has always been an arguable economist as well as person since first known by the world. Lots of commentators have discussed about Marx’s work. Here I will focus on the two of those economists, Mark Blaug and Fred Moseley. Generally speaking, the two of them have opposite thoughts over the validity of Marx’s work: Blaug mostly holds negative critiques about the theory while Moseley considers himself as a Marxist and disagrees. In Fred Moseley’s Heterodox Economic Theories: True or False? Moseley starts with his critiques in response to some of Blaug’s work regarding Marx. He goes on and records Blaug’s response back to him. The conversation goes back and forth. It seems that the two economists largely interpreted the ideas in a way that would fit into their existing point of view. Although the core thought remains for both of them: Blaug doesn’t approve of the validity of Marx’s theory and Moseley believes in the opposite, the debate does seem to make an effort for both of them to view Marx in a broader way. Moseley bases his critique on Blaug’s general appraisal of the empirical validity of Marx’s theory. According to Moseley, Blaug approaches the question of validity with two questions. The first question is: “does Marx's theory provide definite predictions which follow as logical deductions from the premises of the theory, so that the theory can in principle be falsified by contrary empirical evidence?” (Moseley, Marx's economic theory: true or false? P.89) and the second one is: how well do Marx’s conclusions correspond to the empirical evidence? Blaug in his appraisal holds opinions against both questions. Summary of Blaug’s appraisal

In Moseley’s paper, he summarizes that Blaug breaks down the first question with a couple of separate points, mainly the falling rate of profit and the impoverishment of workers. Other than these two points, Blaug also has some arguments about increasing severity of unemployment, increasing concentration of capital, and percentage of labor force that are wage-laborers. Marx’s prediction about periodic depressions happening in capitalist society is also mentioned as a part of an answer for the first question. Blaug starts his criticism of Marx’s falling rate of profit theory by saying that Marx misses clarifications for him to develop this law. Blaug also has two other criticisms that were widely spread and goes further from them: the composition of capital isn’t proved to increase because of technological improvement; there is no proof from Marx that composition of capital increase faster than surplus value. And base of this, he argues that value rate of profit should be separated with price rate of profit, and might have different fate. He thus states that the explanation given by Marx for the falling rate of profit is “simply untenable” and Marx doesn’t provide a definite prediction concerning the trend of the price rate of profit (Moseley, Marx's economic theory: true or false? P.90) Although listed as one important component of Moseley’s opinion, Blaug doesn’t seem to talk much about the impoverishment of workers. The ambiguity of absolute verses relative impoverishment acts as the main critique here in his paper. In the following paragraphs of this paper, Moseley summarizes Blaug’s arguments about other predictions Marx has made. Basically, Blaug seems to be discrediting Marx for giving intuitive definite predictions on inherent technological changes and conflicts between capitalists and workers. As for the second question, “Blaug argues that most of Marx's conclusions not only do not follow logically from his premises, but also have been contradicted by the empirical evidence.” “Blaug also suggests that later Marxists have repeatedly reformulated Marx's theory in order to justify its continued acceptance in spite of contradictory evidence.” (Moseley, Marx's economic theory: true or false? P.91-92) Finally, beyond those...
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