Marx’s category of surplus value

In the large body of work that has explored the relationship between the systems of Marx and Keynes,5 there is no established understanding of the role played by the multiplier. This can be illustrated by some of the more recent attempts to interpret the multiplier from a Marxian perspective. Two main topics of concern are (1) the role of the multiplier in the reproduction schema and (2) the way in which Marx s category of surplus value relates to the structure of the multiplier. The following brief consideration of this recent literature provides the backdrop to a full critique, in which some of its limitations will be addressed. 

The role of Marx s category of surplus value can therefore be identified in a macro scalar multiplier without the restrictive assumption of a one-good model. This scalar multiplier captures the inter-departmental structure of the reproduction schema without constant capital being assumed away. A formal model of aggregate demand in the reproduction schema is developed, which retains the simplicity of the Keynesian multiplier together with Marx s value categories. 

Whichever interpretation is correct, Kalecki s silence on the labour theory of value leaves open the theoretical possibility that its relevance can be fruitfully explored. To relate Kalecki s model of reproduction to Marx s theory, a reconfiguration is required of the definition of profits. The problem, as we have seen, is that Kalecki s model requires a gross definition of profits that is different from Marx s category of surplus value. The Kalecki principle has not been precisely demonstrated in the context of Marx s reproduction schema, in which surplus value is the key category of analysis. 

Although it has been shown that Nell s (2004) model of the circulation of money bears some resemblance to Marx s system, two key issues remain to be resolved. First, in adopting the Kalecki schema of intersectoral flows (Table 4.1), Nell narrowly associates accumulation with the production of means of production (capital goods). There is no mention of the accumulation of consumption goods, which are placed at the centre of Marx s reproduction schema. Second, the role of Marx s category of surplus value is obscured in the Kalecki table. As demonstrated in Chapter 3, for the... 

The result, obtained in Chapter 2, that Marx s category of surplus value can be identified as a constituent element of the Keynesian scalar multiplier, can also be derived for the Leontief matrix multiplier. Starting with the input-output identity... 

Following the interpretation of the Kalecki principle in Chapter 3, profits and investment are defined in net terms. This approach is consistent with Marx s category of surplus value, in contrast to the gross definition of profits adopted by Kalecki. 

On this interpretation b represents the labour-output ratio (L/y) multiplied by the consumption per unit of labour ratio (B/L).7 This expression, it can be argued, represents the value of labour power - the labour embodied in the commodity bundle required to reproduce each unit of labour. Since the propensity to consume is a pure number (money/money), decomposition makes it possible to show that it is identical to the value of labour power (labour/labour), which is also a pure number. An examination of equation (2.1), therefore, reveals that the value of labour power itself (not its monetary expression) appears as the core component of the Keynesian income multiplier. This represents a more revealing insight into the structure of class relationships, with Marx s theory of surplus value directly represented in the denominator of the multiplier. Since the component b is the value of labour power, the denominator —b is the share of surplus value, the proportion of labour time extracted as surplus value. This interpretation of the multiplier penetrates beneath the surface of monetary economic categories as considered by De Angelis, to the Marxian labour categories. 

Lianos (1979) provides an accessible insight into how the multiplier can be located in the reproduction schema. By focusing specifically upon Department 1 he states, it is convenient to assume a one sector economy (ibid. 407). Only information from Department 1 of the example used by Marx (Table 2.2) is included in the Lianos reproduction schema, as shown in Table 2.3. The key modification which enables a translation to Keynesian economic categories is to interpret all value added, variable capital plus surplus value, as net income (T,) for Department 1. Assuming away for the moment the problems associated with Adam Smith s dogma, this income is net of constant capital. The net income of the one-good economy is 2,000, consisting of 1,000 units of variable capital and 1,000 units of surplus value. 

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