When I was flailing about, looking for something on which to blog, someone suggested a commentary on Volume Three of CAPITAL. I went back and took another look at Volume Three, and although there are, as one might expect, a number of interesting passages [to which I had appended lengthy marginal notes in my copy], it does not call to me as a project. There are two things in Volume Three worthy of extended commentary. The first, on which I have written at some length in UNDERSTANDING MARX, is Marx's attempt to resolve once and for all the problems with the Labor Theory of Value that are not handled in Volume One. Marx has a brilliant idea, which however does not quite work. To summarize the matter succinctly and, I fear, somewhat mysteriously for those of you who are not true devotees of Marx's economic theory, his solution works in the special and important case in which the economy is embarked on a balanced growth path of the sort analysed by John von Neumann in a famous theorem, but it does not work in the more general case in which here is luxury production and consumption.
The other topic is the famous claim that as a capitalist economy develops and substitutes capital for labor, there is a tendency for the rate of profit to fall. The point of the claim is that there is, built into capitalism, a self-defeating thrust toward crisis. Alas, on this one, Marx was just plain wrong. The Japanese economist, Okishio, proved in a 1960 theorem [I think that is the correct date] that in a capitalist economy equilibrated by a single economy wide profit rate, an capital-intensive innovation in production that temporarily yields a super-profit for the entrepreneur who has introduced it will, when it has been adopted throughout the economy by all other producers in the same sector, result in an unambiguous rise in the rate of profit.
Why is Volume One such a coruscatingly brilliant work, quite unlike anything ever seen before or since, whereas Volumes Two and Three are somewhat pedestrian and tedious, illuminated to be sure by flashes of genuine insight but hardly worthy of the intense study that is so rewarding to readers of Volume One? There are several reasons, I think. First of all, it is in Volume One that Marx gives full voice to his penetrating insight into the mystifications and false consciousness of capitalist economy and society. This material, found essentially in the first ten chapters of the book, is, I say with absolute confidence, far and away the most brilliant philosophical, sociological, psychological, and economic analysis ever attempted. There is simply nothing else in the eighteenth, nineteenth, or twentieth centuries to compare with it. The second reason is that for a variety of expository and analytical reasons, Marx chooses to restrict himself in Volume One to the special case of Equal Organic Composition of Capital in which Ricardo's Labor Theory of Value actually holds true. This enables Marx at one and the same time to acknowledge what is of enduring value in Ricardo's theory and also to focus on the deep, underlying problem of which Ricardo was not even aware, namely, Why is there profit at all in a capitalist economy? To this day, sophisticated mathematical economists are incapable of recognizing, let alone dealing with, this fundamental question. The third reason is that although Marx was a brilliant intuitive economic theorist -- one of the two or three greatest economic theorists of all time, according to Michio Morishima -- he did not have the technical tools to carry his analysis forward in a successful fashion beyond the point that he was able to reach by intuition alone. It is this failing on his part that led Nobel Laureate Paul Samuelson, in an infamous and disgracefully snide crack, to refer to Marx as a "minor post-Ricardian autodidact." [As I have remarked elsewhere, I have always thought that Samuelson, the author of the most successful elementary Economics text ever written, was offended at the thought that Marx might arrive at important truths without having taken Introductory Micro.]
My two books on Marx say at length what I think of his theories, and it would be otiose to repeat here what I put on paper there. So I am afraid that I as still left casting about for something to blog about.