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Smith’s “Perfect Liberty” and Marx’s Equalized Rate of Surplus-Value

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  • Jonathan F. Cogliano

    (Department of Economics, New School for Social Research)

Abstract

Marx’s theory of surplus-value is fundamental to his innovations in the theory of value and Classical Political Economy. When Marx’s theory of surplus-value is considered in the context of the long-period method, the dynamics of surplus-value and its importance to Marx’s overall framework can be properly presented. This approach reveals that Marx’s use of an equalized rate of surplus-value across sectors of production in Volume III of Capital is not merely a convenient assumption. The equalization of the sectoral rate of surplus-value is in fact one of the central tendencies of Marx’s framework, and is elevated to the level of an economic law by Marx. The reasoning behind Marx’s use of an equalized rate of surplus-value is the mobility of labor found in Adam Smith. This reasoning, when combined with the long-period method, reveals that the rate of surplus-value across sectors is subject to the same turbulent dynamics and equalization process as the rate of profit, and should not be deviated from when applying Marx’s vision.

Suggested Citation

  • Jonathan F. Cogliano, 2011. "Smith’s “Perfect Liberty” and Marx’s Equalized Rate of Surplus-Value," Working Papers 1108, New School for Social Research, Department of Economics.
    • Handle: RePEc:new:wpaper:1108
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    File URL: http://www.economicpolicyresearch.org/econ/2011/NSSR_WP_082011.pdf
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    References listed on IDEAS

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    1. Gérard Duménil & Duncan Foley & Dominique Lévy, 2009. "A Note On The Formal Treatment Of Exploitation In A Model With Heterogenous Labor," Metroeconomica, Wiley Blackwell, vol. 60(3), pages 560-567, July.
    2. Dong‐Min Rieu, 2008. "Estimating Sectoral Rates Of Surplus Value: Methodological Issues," Metroeconomica, Wiley Blackwell, vol. 59(4), pages 557-573, November.
    3. Dong‐Min Rieu, 2009. "The ‘New Interpretation’: Questions Answered And Unanswered," Metroeconomica, Wiley Blackwell, vol. 60(3), pages 568-570, July.
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    Cited by:

    1. Jonathan F. Cogliano & Roberto Veneziani & Naoki Yoshihara, 2022. "Computational methods and classical‐Marxian economics," Journal of Economic Surveys, Wiley Blackwell, vol. 36(2), pages 310-349, April.
    2. Duncan K. Foley, 2020. "Socialist alternatives to capitalism I: Marx to Hayek," Review of Evolutionary Political Economy, Springer, vol. 1(3), pages 297-311, November.
    3. Jonathan F. Cogliano, 2017. "Surplus Value Production and Realization in Marxian Theory - Applications to the U.S., 1987-2015," Working Paper Series 2017-01, Dickinson College, Department of Economics.
    4. Noe Wiener, 2018. "Measuring Labor Market Segmentation from Incomplete Data," UMASS Amherst Economics Working Papers 2018-01, University of Massachusetts Amherst, Department of Economics.

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    More about this item

    Keywords

    Karl Marx; Long-Period Method; Rate of Surplus-Value; Mobility of Labor; Adam Smith;
    All these keywords.

    JEL classification:

    • B12 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Classical (includes Adam Smith)
    • B14 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Socialist; Marxist
    • B51 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Socialist; Marxian; Sraffian

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