Marx and Non-Equilibrium Economics.

• Author: Dugger, William M.

Counting the two editors, ten economists have contributed to this volume, some to more than one chapter. The volume includes a foreword and introduction by the editors, 11 chapters, bibliography, and index. Although there is no contributors section, my guess is that the contributors are academics, mostly in the early stages of their careers. Each of their chapters can stand alone and each is an original contribution first published in this volume. Nonetheless, they all fit together as a whole because they all address a common theme.

Before opening the book, I braced myself for a long and dreary encounter with academic quibblings and hairsplittings over what did Marx really mean, really? But I was pleasantly surprised to find a fresh, frank defense of Marx's explanation of what moved capitalism and why. The contributors argue, in their treatments of several different issues, that Marx's analysis of capitalism is not logically unsound as claimed by his critics. Instead, the logical inconsistency arises only when Marx's analysis is forced into a general equilibrium framework of simultaneous equations in which markets instantly clear and Say's Law holds. Since Marx designed his analysis to deal with a word of disequilibrium - of boom and slump - one should not expect it to make sense in an equilibrium framework of no boom and no slump.

As I understand them, the contributors to this volume argue that Marx analyzed the clashing class interests and the booming and busting of capitalism by moving it through successive periods of production and circulation and by theoretically summarizing the movement in each sequential period with a few simple equations. Then he analyzed capital accumulation with a few additional, expanded equations. He also used a series of tables in which he traced out the sequential movements of his system through successive time periods. Furthermore, he looked at the system as a whole through his famous "two equalities," which basically explained that for the economy as a whole the total value of commodities produced is equal to the total sum of money received by capitalists as they sell their output and that the total profit realized by all capitalists is equal to the total surplus value created. Last, using his system of successive periods, he showed that the rate of profit for the economy as a whole would decline as accumulation proceeded. But the critics of his system reduced it all down to a set of general equilibrium...