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Reclaiming Marxs Capital A Refutation of the Myth of Inconsistency

Marxist Analysis · 2026-05-13

Core Argument

The central thesis of this article is that Marx's economic theory — specifically the labour theory of value, the transformation of values into prices of production, and the law of the tendency of the rate of profit to fall — is logically consistent and theoretically valid. The article argues that the widespread acceptance of Marx's supposed errors by both bourgeois and Marxist economists rests on a fundamental misreading of Capital, one that treats capitalist production as a simultaneous, equilibrium system rather than a dynamic, temporal process. The claim is that once Marx is read correctly — through the lens of the Temporal Single-System Interpretation (TSSI) — the alleged inconsistencies vanish, and Marx's laws of motion stand as coherent explanations of capitalist crisis.

Theoretical Grounding

The article grounds itself firmly in the tradition of value theory developed in Marx's Capital, particularly Volume 3's transformation problem and the law of the tendency of the rate of profit to fall. It draws on the work of Andrew Kliman and the broader TSSI school, which emerged from the debates of the 1970s and 1980s as a defence of Marx against the neo-Ricardian critique associated with Piero Sraffa and the Japanese Marxist economist Nobuo Okishio. The article situates itself against the grain of much 20th-century Marxist economics — including Paul Sweezy, Michael Kidron, and Andrew Glyn — who accepted that Marx's value theory required correction. The theoretical tradition here is one of orthodoxy reclaimed: not a fundamentalist refusal of critique, but a rigorous demonstration that the critiques themselves rest on non-Marxian assumptions about simultaneity and equilibrium. The article implicitly rejects the neo-Ricardian turn in Marxist economics, which substituted a wage-profit trade-off for Marx's law of the falling rate of profit as the primary explanation of crisis.

Conjunctural Relevance

The article was published in 2007, on the eve of the global financial crisis. While it does not directly address the conjuncture of 2007, its argument is profoundly relevant to the period. The crisis that erupted in 2007-2008 was fundamentally a crisis of profitability — a fact that mainstream economics struggled to explain but that Marx's law of the tendency of the rate of profit to fall could illuminate. The article's defence of Marx's crisis theory against the Okishio theorem and the neo-Ricardian alternative is therefore not merely academic. It provides the theoretical foundation for understanding why capitalism entered a period of stagnation, financialisation, and eventual crash after the long post-war boom. The article implicitly argues that those who abandoned Marx's falling rate of profit in favour of wage-led explanations were left without a coherent theory of crisis — a gap that became painfully obvious in 2008. The article's relevance extends to the present conjuncture, where debates over the causes of secular stagnation, the limits of monetary policy, and the return of inflationary pressures all hinge on whether one understands capitalist crisis as rooted in the internal contradictions of value production or in external shocks and policy errors.

Where the Argument Continues

The article is a review of Andrew Kliman's Reclaiming Marx's Capital, and the argument continues most directly in that book itself. For readers seeking deeper engagement, the TSSI tradition is developed in the work of Alan Freeman, Guglielmo Carchedi, and the journal Critique of Political Economy. The article also points to Michael Roberts' own empirical work on the rate of profit, which applies the theoretical framework defended here to concrete data. The debate with the neo-Ricardian position is further elaborated in the pages of In Defence of Marxism, particularly in articles by Mick Brooks and others that engage with the legacy of Sraffa and the Okishio theorem. The article does not develop the empirical case for the falling rate of profit — it explicitly leaves that to others — so the argument continues in the empirical literature on profitability, including Roberts' The Long Depression and the work of the International Working Group on Value Theory.

Connections

  • Andrew Kliman, Reclaiming Marx's Capital — the book under review, the definitive TSSI defence of Marx's value theory.
  • Alan Freeman and Guglielmo Carchedi (eds.), Marx and Non-Equilibrium Economics — a key collection developing the temporal interpretation.
  • Michael Roberts, The Long Depression — empirical application of the falling rate of profit thesis to the post-2008 period.
  • Paul Sweezy (ed.), Karl Marx and the Close of His System by Eugen von Böhm-Bawerk & Böhm-Bawerk's Criticism of Marx by Rudolf Hilferding — the classic text that introduced the transformation problem debate to English-speaking Marxism.
  • Nobuo Okishio, "Technical Changes and the Rate of Profit" — the original statement of the Okishio theorem.
  • Piero Sraffa, Production of Commodities by Means of Commodities — the neo-Ricardian foundation that many Marxist economists adopted.
  • Mick Brooks, "Marx's Economics and Lord Desai's 'Revenge'" — a companion piece on marxist.com that engages with similar themes.

Key Quotes

  1. "Kliman shows conclusively in his book that Bortkiewicz's 'correction' of Marx's 'error' is wrong. There is no need to transform the values of the inputs into the production process based on prices of the outputs. That is logically and temporally wrong."

  2. "If you make a pair of trousers and price them according to the cost of the textiles and something for the wear and tear of the machinery and for the labour time involved, you don't then reprice the labour time or the machines you used according to the price of trousers you have just made."

  3. "Okishio's theorem, ostensibly a correction of Marx, made a similar mistake to Bortkiewicz. If a new technology increases the productivity of the labour force, it lowers the value of labour time in the production of commodity. According to Marx, that will lower the value or price of production and tend to lower profitability, other things being equal."

  4. "You cannot reduce the cost of production using the new prices achieved with the new technology because you have already spent it at the old prices. The new prices only apply to the next round of production. The process of production is not simultaneous, but temporal."

  5. "Marx assumed from the start that the prices of inputs to production would differ from the prices of the output."

  6. "Kliman is not saying that Marx is empirically correct. It may not be that the rate of profit under capitalism does fall as the organic composition of capital rises, or the organic composition of capital may not rise under capitalism. Marx's law of motion of capitalism may not fit the facts to explain economic crisis. That is the job of others to show or not."