‘Maurice Dobb: Political Economist’ reviewed by Hans G Despain

It is difficult to think of a more capable political economist to learn Marxian economics from than the late Maurice Dobb (1900-1976). Dobb made major contributions in Marxian economic history, theories of monopoly capital, theories of crises, economic development and growth, penetrating criticisms of neo-classical theory, economic analysis of Soviet economic development, hundreds of pamphlets and popular articles to increase socio-economic literacy, and much more. There is a new and impressive intellectual biography of Maurice Dobb written by a talented and highly capable young historian called Timothy Shenk. This book deserves a wide audience, and hopefully will help to bring the talents and insights of Maurice Dobb to another generation of Marxian political economists.

From 1919, following the publication of his Economic Consequences of Peace, until his death in 1946, John Maynard Keynes and his theories dominated the economics department of Cambridge University. Although Keynes himself never directly engaged Marxian political economy, his students and colleagues did. It can be argued that the indirect effect of Marxian political economy was significant.

For Keynes a gap would manifest in capitalist development between aggregate income and consumption. As the saving propensities increased for wealthier members of society, investment opportunities would need to be ever more abundant, or there would manifest an increase in unemployment. In other words, in capitalism there emerge tendencies toward redundancy of workers, or an increase in un(der)employment.

There are important parallels between the Keynesian story and Marxian reproduction schemes, of volume two of Capital (summarized in chapter 25 of volume one of Capital), which are less than merely coincident. We know for sure that Maurice Dobb, a Cambridge colleague of Keynes, had earnestly studied the Marxian reproduction schemes. Although the unfinished manuscripts which constituted volume two of Capital are theorized as “balanced” or crisis-free development, Dobb would insist this would only happen as a miraculous accident. Instead, the point of volume two of Capital according to Dobb is to illustrate that the normal state of capitalist accumulation consists in disproportionalities between sectors. According to Marx and Dobb, in a capitalist world dominated by credit money, disproportionalities would become chronic and reoccurring, manifesting socio-economic crises of varying severity.

Dobb’s posthumous career hardly turns on whether his reading and teaching of Marxian reproduction schemes had an influence on the development of Keynesian economics. We know for sure that Dobb’s influence on the tradition of “Post-Keynesian economics” was momentous and decisive (219). But more important than this, Dobb’s commitment was to develop a modern Marxian political economy.

Dobb was far less triumphant than Keynesians in the ability of policy-makers to mend, let alone overcome, the internal contradictions of capitalistic crisis and unstable economic development and growth with monetary and fiscal policy.

Maurice Dobb is arguably the most of important (English-speaking) Marxian political economist of the twentieth century. Dobb’s influence on the development of Marxian political economic thought is breathtaking. At the same time, there did not exist an intellectual biography in monograph form until now, with the publication of Timothy Shenk’s book Maurice Dobb: Political Economist.

Shenk’s book deserves a wide audience. The book will be appreciated and celebrated for its judicious presentation of the intellectual biography of Dobb, its cogent research, and also for Shenk’s ability to understand Marxian political economy and leftist politics. Indeed, perhaps the book’s greatest strength is Shenk’s weaving of Dobb’s Marxian political economy with Dobb’s political activity as a lifelong member the Communist Party of Great Britain (CPGB) (this latter important aspect of Shenk’s book is not developed in this review, but to repeat it is an important strength of the book; see for example 68-77, 158-62, 33-6, and 1-2).

Shenk presents this intellectual biography in chronological fashion, weaving each intellectual pursuit of Dobb with his lifelong commitment to emancipation from the tyranny of capitalistic crisis, and chronic underdevelopment of the majority of nations during the post-imperialistic and post-colonial era of capitalist development (140-1). Dobb did not develop full theories to explain the world’s chronic underdevelopment, as would world-system theorists with their notion of core versus periphery capitalistic nations, but Dobb never tired of pointing out that capitalistic development and growth had only succeeded in limited ways and highly unique historical circumstances, while failing to develop underdeveloped regions and nations far more often. Dobb insisted that socialistic planning was a viable and far more realistic alternative for the majority of the underdeveloped nations (171-4).

Early in Dobb’s academic career he felt great sympathy for the economics of Alfred Marshall (37). This sympathy of Dobb towards Marshall provided Dobb one of his greatest strengths as a theorist, namely a deep understanding of mainstream economics. This deep understanding provided Dobb with the ability to construct penetrating immanent critiques of neo-classical economics, best illustrated in his 1969 book Welfare Economics and the Economics of Socialism: Towards a Commonsense Critique (185-92), but also in his last book Theories of Value and Distribution since Adam Smith: Ideology and Economic Theory, especially in his chapter on the so-called “Jevonian Revolution” (207).

Dobb believed that Marshall’s marginal economics was an accurate depiction of contemporary economic life as long as the institutional physiology of capitalism was relatively stable. Marxian political economy, in Dobb’s interpretation, was an argument for why the institutional physiology of capitalism would be characterized by instability and crisis (168). In other words, one could say that according to Dobb marginal economics was a special case of stable development, and Marxian political economy the more general theory of instability, or boom and bust development.

Shenk underappreciates Dobb’s theorizing of capitalistic crisis. In 1937, Shenk maintains that Dobb’s Political Economy and Capitalism succeeded in challenging only various interpretations of Marx, but not in “constructing a coherent theory of crises” (86). I would disagree with this characterization. Rather, Dobb is constructing a Marxian theory of crisis that resists reductionism to, for example, the falling rate of profit or underconsumption. Dobb’s point is that capitalistic crises are complex and historically contingent phenomena dependent on the specific institutional physiology of society.

In his 1937 book, Dobb argues that capitalism is characterized not by competition between small businesses, but by monopoly-like economic power (Dobb 1975, 182-269). He argues in his chapter on “Trends in Modern Economics” (Dobb 1975, 127-84) that even mainstream theory (Marshall very early on) had come to recognize monopoly capital. In his most famous book, Studies in the Development of Capitalism (1946) Dobb begins to model a highly coherent theory of crisis based on the institutional physiology of monopoly capital, whereby the rate of profit is rising and instability high (see Dobb 1963, 321-34). According to Dobb, Keynesian aggregate demand management was highly limited in its ability to address the severity of capitalistic instability (see Dobb 1963, 378-86).

Even if Shenk is correct that Dobb does not have a cogent theory of crisis in 1937, by 1946 Dobb had constructed a modern form of Marxian crisis theory. Moreover, in 1962 Dobb released a small book titled Capitalism Yesterday & Today (see 41-89, especially 65-74) that articulates a Marxian theory of crisis based on the reproduction schemes of Marx’s volume two of Capital. Finally, in his last book, Theories of Value since Adam Smith (1973), Dobb summarizes Marx’s notion of crisis (see Dobb 1973, 161-4), and articulates a modern Marxian theory of unstable development based primarily on Marx-Keynes-Kalecki (see Dobb 1973, 211-46, especially 221-5).

Shenk’s presentation of Dobb’s historical analysis of Russian and Soviet development is very well done and important (49-59, 114-25, and 174-9). In these pages, Shenk demonstrates that Dobb had a great appreciation of Lenin (50-4), but that he was not critical enough of the brutality of Stalin (120, also 158). But Dobb’s overarching aim in his studies of Russian and Soviet development is to show that planned industrialization had been a remarkable economic success (49-56, and 115-22). Dobb would teach a generation of Western economists about Soviet development (56-9 and 122-5). These were invaluable contributions.

Of course Dobb is most famous for his Marxian interpretation of economic history as best articulated in Studies (100-15). Shenk does a masterful job of summarizing the historical importance of this book for Marxian political economy, and recapitulating the “Transition” debate, initiated by Paul Sweezy’s critique of Dobb, which would ensue over the next several decades (146-55). Studies is not merely economic history, but a demonstration of the “fruitfulness” of a Marxian interpretation of both feudalism and capitalism (101). In the first six chapters Dobb is performing a Marxian interpretation of feudalism and the rise of the bourgeois and working classes. The early chapters of Studies and the transition debate are rightly seen, to this day, as some of the most celebrated achievements in Marxian political economy.

In later chapters, the character of Studies shifts (108). These chapters deserve as much attention as do the early chapters on feudalism and the transition to capitalism.

Shenk attributes this shift to the “formidable” amount of historical data and complexity of the historical circumstances (108). I interpret this shift as Dobb’s attempt to develop a political economy of contemporary capitalism, informed by the historical origins of its emergence. The accomplishments of the last two chapters are under-acknowledged. As Shenk points out, Dobb underscores an “epoch of monopoly capitalism” after World War I (110). This is more than merely an echo of Lenin’s Imperialism the Highest Stage of Capitalism (101), it was a theoretical extension and development of the role and dominance of monopoly capital in the dynamism and instability of contemporary capitalism.

Dobb argued in Studies that merchant monopolies emerged in feudalism, and initiated the formation of a new “bourgeois” class that was in a stable economic alliance with feudal nobility (albeit also a cultural antagonism). The important point here is that monopoly merchants were a conservative force that tended to stabilize the feudal order. The really revolutionary way to capitalism did not originate from extension of trade or monopoly merchants, but from a feudal economic crisis (in 1946, Dobb is unsure of the exact sources of the feudal crisis; this analysis would be picked up by Dobb’s students, such as Rodney Hilton and others).

The feudal crisis was a manifestation, rather, of traditional peasant revolts. But there was a twist; over several decades, thousands of peasants had been emancipated from strong feudal obligations. These “freemen” hired desperate serfs and peasants during the feudal crisis. During this sixteenth century crisis, the monopoly merchant element began to align itself with the revolutionary forces of “freemen” and want-to-be freemen.

Thus, in Dobb’s historical version, the monopoly merchant element is a parasitic element: first on feudalism, then opportunistically aligning itself with revolutionary democratic forces in sixteenth century England, and by the late eighteenth century once again becoming a parasitic, conservative force within the bourgeois order. This parasitic monopoly-like economic element would become the primary political force by the late nineteenth century (see Dobb 1963, 266-81). It increased its power and influence into the twentieth century (see Dobb 1963, 322-34), and has continued to increase in economic and political power into the twenty-first century.

Shenk does a nice job of emphasizing the cumulative accomplishment of Dobb’s Theories of Value and Distribution since Adam Smith (1973) (203-11), though, in my opinion, Shenk misplaces the accent. In Theories Dobb offers a defense of classical political economy in general, and Marxian political economy in particular. The basic thrust of the argument is that classical political economy maintained that distribution of income and wealth is not merely the function of supply and demand, but historical modes of primitive accumulation and institutionalized systems of power. So for example, Adam Smith maintained that rent was not determined by market forces but by the monopoly privilege of the landowning class, indeed a type of feudal hangover. Likewise, the shares of wages and profits were not only internally antagonistic, but radically a function of power relations (Smith’s version of the class struggle). David Ricardo would maintain that wages were more a function of technology and land fertility, not supply and demand of workers. John Stuart Mill believed that forces of supply and demand determined prices of consumption goods, but the costs of production were determined by institutional and political conditions.

The quintessential classical political economist was, for Dobb, Karl Marx. Marx, of course, maintained that wages and profits were a function of class struggle, not merely supply and demand. Moreover, volume three of Capital shows that rent-seeking activity would also become a key feature of capitalism, not merely in agricultural production (as it was for Smith), but in any industry whereby political privilege and power could be established and institutionalized (today economists call this rent-seeking political activity). In short, for Dobb and the classical political economists, distribution is a function of “value” (in its economic, social, and philosophical meaning). Moreover, distribution of wealth and income is a trans-market phenomenon, not merely a function of choice and exchange.

Shenk claims that Dobb’s thrust in Theories is a Sraffaian interpretation of economics (204). I believe this to be misguided. Rather, Dobb understood Sraffa as providing a formal modeling of classical political economy. For Dobb, as Shenk rightly underscores, Sraffa was a return “back to Marx with a vengeance” (205). In this classical picture, distribution of income is not derived from circles of exchange, rather, prices of consumption goods are derived from conditions of distribution, and distribution is not derived from the structure of prices (see Dobb 1973, 261).  

In the end, Shenk does an impressive job of outlining the economic theories and political activities of Maurice Dobb. This is a highly recommended book that is very well researched and just as well written. I extend my gratitude to Timothy Shenk for his accomplishment, and urge once again a wide readership. 

23 March 2014