Karl Marx and the close of his system

[Title Page and Table of Contents]: Title page and table of contents for the volume, listing contributions by Böhm-Bawerk, Hilferding, and Bortkiewicz, edited by Paul Sweezy. [Editor's Introduction by Paul M. Sweezy]: Paul Sweezy introduces the three works in this volume, providing historical context for the debate between the Austrian School and Marxism. He outlines Böhm-Bawerk's career as a founder of marginal utility theory and his critique of Marx's 'contradiction' between Volumes I and III of Capital. Sweezy also details Rudolf Hilferding's political and intellectual life, emphasizing his defense of the social and historical nature of Marxian value. Finally, he introduces Bortkiewicz's mathematical correction of Marx's transformation of values into prices, arguing that while Marx's specific method was flawed, the core of the system remains theoretically significant. [Karl Marx and the Close of His System: Introduction]: Böhm-Bawerk introduces his critique by noting the immense influence of Marx's work despite its difficulty. He highlights the long-awaited publication of Volume III of Capital, which was expected to solve the apparent contradiction between the law of value (labor-based) and the reality of equal profit rates on unequal capital compositions. [Böhm-Bawerk: The Theory of Value and Surplus Value]: Böhm-Bawerk summarizes the foundational Marxian theories of value and surplus value from Volume I of Capital. He explains Marx's deduction that labor is the 'common factor' in exchange value and defines the concepts of constant and variable capital. He concludes by showing how different organic compositions of capital, under the law of value, would lead to different profit rates, setting the stage for the 'contradiction' found in Volume III. [Böhm-Bawerk: The Theory of the Average Rate of Profit and of the Price of Production]: This section details Marx's solution to the profit rate problem as presented in Volume III. Böhm-Bawerk explains how Marx moves from 'values' to 'prices of production' through the equalization of profit rates via competition. He uses Marx's own tables to show that while individual prices deviate from values, the total surplus value is redistributed among capitalists as an average profit based on total capital invested. [Böhm-Bawerk: The Question of the Contradiction]: Böhm-Bawerk argues that Volume III flatly contradicts Volume I. He examines four Marxian arguments intended to save the law of value: (1) that total price equals total value, (2) that labor still governs price movements, (3) that the law holds in 'primitive' pre-capitalist conditions, and (4) that value indirectly regulates production prices. He rejects all four, asserting that Marx's 'average' is a mathematical abstraction that fails to explain why individual exchange ratios deviate from labor time. He specifically critiques the historical claim of a pre-capitalist 'pure' labor value exchange as improbable and unsupported by evidence. [Böhm-Bawerk: The Error in the Marxian System—Its Origin and Ramifications]: Böhm-Bawerk traces the root of Marx's error to his initial 'dialectical' deduction of value. He critiques Marx for excluding non-labor goods (natural resources) from his analysis and for the circular reasoning used to reduce skilled labor to 'multiplied' unskilled labor. He argues that Marx's method of abstraction in Volumes I and II ignored the very factors (capital investment and time) that he was forced to reintroduce in Volume III, leading to a 'demoralized' and confused final argument in the tenth chapter of the third volume. [Böhm-Bawerk: Werner Sombart's Apology]: Böhm-Bawerk critiques Werner Sombart's defense of Marx. Sombart suggests that Marx's value is a 'fact of thought' rather than an empirical reality. Böhm-Bawerk rejects this, asserting that an 'aid to thought' must still be adequate to the facts it seeks to explain. He contrasts the 'objective' Marxian method with the 'subjective' psychological method of the Austrian School, concluding that Marx's system is a 'house of cards' built on hollow dialectics that will eventually be replaced by more scientifically grounded socialist theories. [Hilferding's Criticism of Böhm-Bawerk: Preface and Value as an Economic Category]: Hilferding begins his rebuttal by identifying the fundamental difference between the psychological school and Marxism: the former starts from the individual, while the latter starts from society. He argues that Böhm-Bawerk's critique of Marx's 'dialectic' deduction fails because it treats value as a natural property rather than a social relationship. Hilferding explains that 'value' is an economic category expressing the social bond in an atomized society based on the division of labor. He also provides a theoretical explanation for the reduction of skilled labor to unskilled labor, viewing skilled labor as a 'multiple' of unskilled labor because it incorporates the labor of training and education. [Hilferding: Value and Average Profit]: Hilferding defends the transition from value to price of production. He argues that the law of value is not 'revoked' but 'modified' by the capitalist mode of distribution. He critiques Böhm-Bawerk for confusing value with price and for ignoring the role of constant capital. Hilferding maintains that the total surplus value produced by the working class determines the total profit available for distribution among capitalists, and that the law of value remains the only way to determine the magnitude of this total profit. He also addresses Sombart's historical objections, arguing that the equalization of profit rates was a long historical process resulting from the development of capitalist competition. [Hilferding: The Subjectivist Outlook]: In the final section, Hilferding contrasts the 'subjectivist' psychological outlook of the Austrian School with the 'objectivist' Marxian outlook. He argues that the psychological school repudiates economics as a social science by reducing it to individual mental states. For Marx, the law of value is a law of social motion that reveals the antagonistic class structure of capitalism. Hilferding concludes that the psychological school's 'suicide of political economy' is the final bourgeois response to scientific socialism, which correctly identifies the historical and social nature of economic life. [Appendix: Bortkiewicz on the Transformation of Values into Prices]: Bortkiewicz provides a mathematical correction to Marx's transformation of values into prices. He points out that Marx failed to transform the 'input' (constant and variable capital) into prices, only transforming the 'output.' Using a three-department model (means of production, workers' consumption, and luxury goods), Bortkiewicz develops a system of equations to correctly determine the average rate of profit and prices of production. He demonstrates that the rate of profit depends on the organic composition of capital in the departments producing means of production and wage goods, but is independent of the department producing luxury goods for capitalists. [Index of Names]: An alphabetical index of names mentioned throughout the text, excluding the primary authors and critics.