Reviewed by Hans G Despain
Jonathan Sperber’s new biography on Marx is interesting, notwithstanding the Introduction, for the first 383 pages. Sperber brilliantly presents Marx’s journalistic and political activities, although it can be argued Marx’s politics ideas are inadequately developed. Marx’s relationships are judiciously portrayed, offering a glimpse of Marx’s personality. Sperber addresses several events, including Marx’s relationship with his father and mother, the social standing of his wife’s family, the “beauty” of Jenny, Marx’s “racism”, etc., etc., that are at odds with other portrayals of Marx. Sperber sometimes suggests the historical evidence is contrary to popular portrayals, and other times the evidence is inclusive. There is value here in the new accuracy of Marx’s personal biography, not much else.
There are numerous reviews of Sperber’s book, primarily praiseful. In particular John Gray (New York Review of Books) and David McLellan (Marx and Philosophy Review of Books) provide excellent overviews of book. They praise when due, and provide important criticism. However, each praises an aspect of the book that is an acute flaw.
Gray claims “[i]n pointing to the formative intellectual role of positivism in the mid-nineteenth century Sperber shows himself to be a surefooted guide to the world of ideas in which Marx moved.” I strongly disagree. What Sperber develops is an overly-polarized, consequently misleading, contrast between positivism and Hegelianism. For example, Sperber claims, the Communist Manifesto offers an example that “leaps off the page” of Marx’s “transition from Hegelian to positivist forms of representation” (391) after 1848. It is not clear what Sperber means by positivism, indeed he never actually defines it. But his use of the term simply indicates evidence, data, science (409), and a teleological belief in progress (397).
Sperber quotes a “Hegelian passage” from Marx, concluding: “In this passage, Marx was presenting an intellectual program quite different from the positivist conception of knowledge as empirically obtained through scientific procedures” (409). Throughout Sperber’s book, Hegelianism is assumed to be non-empirical and opposed to scientific procedures. “We might imagine nineteenth-century philosophy and social theory as placed along a line” on one end is Hegelianism and its “distrust” of empirical evidence and on the other end positivism with its “priority on scientific method and a scientific form of empiricism” (417). According to Sperber, Marx couldn’t consistently choose between the two. A rather dull-witted polarization and mischaracterization of Marx’s philosophy.
More vulgar still is Sperber’s treatment of Hegelianism, with Marx interpreted merely “another worshiper of the cult of Hegel” (52). Sperber asserts Hegelianism is “notoriously complex and convoluted” (49), “arcane, vague, and terribly abstract” (51). The reader should beware that Sperber has little if any sympathy for continental philosophy. Less a “surefooted guide”, Sperber does a hatchet-job on the continental philosophy developed by and informing Marx’s scientific investigations.
Consider this gem: “Marx, one could say, invented the working class for political reasons: to realize the aspirations emerging from his frustrating encounters with authoritarian Prussian rule” (126). Sperber here claims that the capitalist working class is not a historical emergent phenomenon, but an invention of Karl Marx to achieve subjective personal aspirations. Let us hope this is a rather unhappy Freudian slip of the keystroke by Sperber, a historian with expertize of the nineteenth century.
He also writes in the introduction any “attempt to update Marx, to make his ideas more relevant by adding to them or reinterpreting them in light of psychoanalysis, existentialism, structuralism, post-structuralism, or elements of any other intellectual movement” are “useless pastimes” (xvii). Sperber seems to be ignoring the process of scientific development as building from, and in criticism of, past science. Perhaps Sperber believes Marx and/or Marxian social researchers are not carrying out science?
Sperber’s commentary on Marx’s political economy troubled me even more than his commentary on Marx’s philosophy. Further, we have Marx’s foremost biographer, David McLellan, praising Sperber’s “ account of the economics of the three volumes of Capital (and the difficulties therein) is one of the best summaries that I have come across.” I would like to demonstrate McLellan’s comment to be overly generous.
Biographers, generally, should be given leeway respecting theorists’ ideas. Sperber however is claiming that Marx’s political economy lacks relevance for the twentieth and twenty-first centuries (actually he even suggests limited relevance for the nineteenth-century). Sperber fails to accomplish this task, in part because he has not fully followed and understood Marx’s political economy.
Sperber’s summary of Marx’s (mature) political economy is far too brief, a mere ten pages (427-37). Sperber has not interpreted Marx as developing a dynamic theory, but instead claims Marx provides only “static snapshots” (435) (thus, not understanding the dialectical relationships of, for example, abstract labor, money, credit, expansion, productivity/technology, concentration, centralization, overproduction, disproportionality, uneven growth, crisis, unemployment, etc., etc.).
Sperber claims that Marx maintained unemployment caused the business cycle, but the “causation on this point was not entirely clear, and it seems more logical to turn cause and effect around” (433). To claim the business cycle causes unemployment is radiantly tautological. Marx certainly never claimed unemployment caused the business cycle.
In addition to the ten pages of political economy, Sperber provides eight pages of dates and book titles of Marx’s political economy (419-27), eighteen pages addressing the three contemporary issues: (1) the falling rate of profit, (2) the so-called transformation problem, and (3) the issue of ground rent (437-54). The remaining pages address Marx’s comments on corporations and service sector workers (454-6), reviews of Capital, comparisons to the Historical School and the 1870s marginal utility theory, concluding with Böhm-Bawerk’s critique of Marx’s system (456-63).
The economic chapter is pivotal to Sperber’s overarching project of the limited relevance of Marx as “more usefully understood as a backward looking figure” and not the “surefooted and foresighted interpreter of historical trends” (xiii). While Marx’s journalism and political activity are historically embedded and intended for a nineteenth-century audience, Marx’s social theory, political economy and philosophy can be, and are, argued to be a different matter. Thus for a thesis that is interested in showing that Marx’s relevance is historically limited, the focus on journalism and political activity and the neglect of Marx’s understanding of capitalism is peculiar.
Thus, there should be an immediate questioning of why Sperber spends the bulk, more than half of the chapter, on the issues of the falling rate of profit, transformation problem, and ground rent. After all, volume one of Capital is full of historical data suggesting future trends concerning inequality, crisis, concentration and centralization of capital, technological change, struggles over the conditions of work, etc., which Sperber all but ignores.
Sperber’s justification is that his topics of choice are addressed in an 1868 letter of Marx to Engels as the crucial issues to be developed in later volumes of Capital. The issues are in the letter. However, Sperber’s interpretations of these issues demonstrate that he has failed to fully understand the political economy of Marx.
Sperber’s interpretation of the falling rate of profit (FROP), labor theory of value (LTV), and ground rent is that of Classical Political Economy of Adam Smith and David Ricardo, not Marx. Marx believed these theories to have important insights, but to be incomplete, and consequently misleading in projecting Smith’s “steady-state” capitalism. Likewise, the Ricardian version of the labor theory of value projected subsistence wages of agricultural workers, zero profits, and massive rents for the most fertile land. Marx believed these to be theoretically wrongheaded.
Marx’s versions of the FROP, LTV, and ground rent aim to demonstrate this as developed in Capital. All of these ideas are certainly hotly contested within Marxian economics. Sperber’s choice of issues has very much depended on post-Marx misinterpretations. I do not know which ones, because Sperber references are almost exclusively to Marx. However, his choice of topics is quite revealing. Instead of developing analysis from a wealth of interesting theoretical insights from Marx, he chooses to develop those that are most often misinterpreted and hence the easiest straw-men within Marxian political economy to critique. This is not an accident, Sperber did not home in on these topics from his own reading of Marx, but contemporary critiques. Thus, Sperber fails on his own mission to understand Marx in his own historical context.
It is very difficult and wrongheaded to argue the first three chapters of Capital are concerned with a price theory. Moreover, Marx’s theory of exploitation and analysis of the distribution of surplus value do not depend on the so-called labor theory value. I do not have the space in this review to explain the irrelevance of the transformation problem to Marx’s historical analysis. But Sperber has a clue to this point when he praises Böhm-Bawerk for pointing out, for Marx, labor time does not determine prices (461). Thus, the question becomes why spend time in a biography on the so-called transformation problem?
Prices are not important to Marx’s LTV, not even as a “first approximation.” This was important for Adam Smith, and leads to an internal contradiction within his work. In the pages on distribution Smith says profits and wages are a function of class struggle, and rents are a matter of political power as a function of the historical feudalistic hangovers and enclosures. However, in the pages explaining the prices of other goods, Smith claims price to be a function of the costs of production (wages, rent, profits), Smith’s “adding-up theory” of price. For Marx this is a strange theory, because Smith’s theory of distribution is class struggle, but his theory of prices is not. But there is a greater contradiction. Smith argues that overthrowing mercantilist monopoly power and establishing competition will minimize the power of the mercantilist class, whereby class struggle is made benign. Marx argues that capitalist competition will at best shift the class struggle; otherwise competition intensifies the class struggle. Marx demonstrates this throughout Capital and never does the issue of “transformation” (value to price) become relevant.
In volume three of Capital Marx’s analysis of FROP is left incomplete, but does emphasize six countertendencies. However, the primary countertendency to FROP is found in volume one, namely the process of centralization. The theoretical and empirical evidence for FROP is overwhelming. Sperber is simply wrong to say “there was no proof of the tendency of the rate of profit to fall” (443). Indeed it is one of the best established of empirical phenomenon, accepted by both orthodox and heterodox economics. However, Marx is not predicting “steady-state” capitalism as did Smith. Nor did Marx believe as did Ricardo that the rate of profit in agriculture would tend toward zero and rents absorb all surplus-value.
Marx’s assumption of a stable rate of surplus value, simply does not hold empirically, nor does Marx maintain a stable rate of surplus value in volume one. Absolute surplus value and relative surplus value are highly variable. There is a strong tendency for FROP, but it does not bear the weight that Classical Political Economy / Sperber place on it. Instead, Marx maintained that FROP determines the structural dynamic toward the concentration and centralization within industries, and an impetus for technological innovation displacing large segments of the labor force and creating unemployment. FROP generates its countertendencies, especially centralization of industries, or the tendency toward oligopolization. What a topical issue in this “too-big-to-fail” era.
Marx’s theory of crisis does not rest as heavily on FROP as Sperber suggests. Instead, more important according to Marx are the tendencies toward overextension of credit, overproduction, and the disproportionalities between sectors, due to the “anarchy of production.” FROP does determine a system dynamic for Marx, but not necessarily crisis. In his early political writings, Marx does often assert economic crisis will generate a revolution. However, as he begins to theorize this more rigorously from the late 1850s forward, he no longer asserts revolution, but a highly problematic macroeconomic dynamic.
Finally, regarding ground rents, Sperber concludes, Marx depended on Malthusian arguments and is a backwards looking economist (454). This is impressively obtuse. Sperber claims the number of pages Marx spends on ground rent indicates its importance to him; however, Sperber points out, agricultural economics was rapidly diminishing in importance, even during Marx’s lifetime. I agree with Sperber, Marx considered ground rent important, but not because he was a “backward looking economist.”
Let’s consider four forward-looking reasons Marx has interest in ground rent.
First, it was hopelessly confused between a capitalistic and feudalistic analysis. Marx wanted to establish that agricultural rent could no longer be understood under assumptions of feudalistic institutions.
Second, in addition to fertility, and in contrast to Malthus and others, capital productivity/technology could determine differential rents.
Third, under capitalism rent is determined by competition, hence there was/is a tendency for rents to reflect absolutely the fertility of land and capital productivity. However, this Ricardian outcome is hardly the end for Marx. As profits and rent tend toward zero in the least productive land, the result is centralization and monopolization of real estate, neither a Ricardian nor Malthusian outcome, but quite Marxian and real world.
Fourth, the lesson hardly ends at agricultural rents. Marx suggests something quite prophetic, with great contemporary relevance. The “laws” of capitalist production impose a tendency towards what contemporary economists call “rent-seeking behavior” whenever possible. In Marx’s own words: “When rent exists, differential rent always appears and always follows the same laws as it does in agriculture. Whenever natural forces can be monopolized and give the industrialist who makes use of them a windfall profit, whether a waterfall, a rich mine, fishing grounds or a well-situated building site” monopolization is attempted by means of politics or economics (Marx, Capital, volume III, Chapter 46). In volume one, Marx argues this is hardly unique to natural resources. Centralization is the logical outcome of economic competition itself. In a phrase, competition generates a lack of competition. An internal contradiction of the system. I wonder, would Sperber accept the relevance of “rent-seeking behavior” to contemporary political economy regarding mergers and acquisitions, “political lobbying” (U.S.), cronyism (e.g. Russia), or nepotism (e.g. China).
Sperber’s book is a success regarding Marx’s journalism, political activities, personal and family relationships. Unfortunately, Sperber has far less success regarding Marx’s philosophy and political economy. Given more space we could also demonstrate the book’s weaknesses in grasping Marx’s sociology and theory of history.
2 September 2013