LFC makes the following comment: “Prof. Wolff has said that one of his aims is to "put the irony into the equations," but where is the irony here? I get the mocking language ("moneybags") and the element of mystification, but mockery and mystification aren't the same as irony. So where is it?” Once again, I am afraid that by rushing through my ideas too quickly I have neglected to include essential points, so instead of the next episode in this soap opera I will directly address LFC’s question. That will actually set things up for what I wanted to say next.
The central ironic utterance whose true meaning Marx seeks to expose is the phrase “free market.” In the era preceding the development of capitalism there was a complex network of constraints on economic activity. Guilds controlled the actions of master artisans and of the apprentices and journeymen in their establishments. Where a cabinetmaker could ply his trade, what prices he could charge for what he produced, what he paid to those working under him, these and many more aspects of economic activity were regulated by a mesh of laws, customs, and guild regulations. It was the elimination of these constraints that unleashed the enormous productivity of capitalism.
Thus the actions of entrepreneurs were free in the sense of being freed from traditional and other constraints. The workers too were free, or at least so it was said by the theorists and apologists of the new economic order. The workers were free to travel wherever they wished in search of work. They were free to bargain for wages in any way they wished, demanding more, refusing to accept the job that paid less, moving from city to city and from employer to employer without legal or other constraint. So it was that Marx described the marketplace as “an Eden of the innate rights of man… (where) alone rule Freedom, Equality, Property and Bentham.”
Thus far the apparent or superficial meaning of the phrase “free market.” But although the superficial meaning applied truly to the capitalists it was for the workers bitterly ironic. The deeper meaning was that the workers were indeed free – they were freed of the land on which they grew their food or tended their sheep. They were indeed free – they were freed of the tools of their labor. They were indeed free – they were freed even of the skills which they had acquired over long years of practice, for those skills were now built into the machines that they or their children tended. The workers were freed of everything save their capacity for labor and having nothing else with which to get their food, clothing, and shelter they were thus compelled to accept the wages offered by entrepreneurs or starve. Their “freedom” was in fact slavery – wage slavery as it came to be called.
But Political Economy perpetuated the myth that workers, like their employers, were free men and women engaging freely in the production of commodities which they then freely brought to market and freely offered at any price they freely chose. Indeed, this myth was endorsed by the legal system, for just as the law forbade entrepreneurs to join together forming a “combination (of entrepreneurs) in restraint of trade,” so the workers were forbidden to join together into unions which the law construed also as “combinations (of entrepreneurs) in restraint of trade.”
There are other ironies in the standard descriptions of capitalism, including one that will play a central role in my mathematical analysis of the situation but it is this characterization of capitalism as a Free Market system that is the central unconsciously ironic utterance of all classical and neoclassical economic theory. In Capital, especially in the early chapters, Marx struggles first to give voice to and then to expose as meretricious the myth of the free market.
I hope that these remarks begin to respond to the question posed by LFC. In the next one or two chapters of this saga I hope to enrich and deepen these insights and connect them up with the modern mathematical reinterpretation of the classical and Marxian Political Economy.