Writing to George Bernard Shaw, during the composition period of the General Theory, Keynes justified his dismissal of Marx by claiming that the Theory “will largely revolutionize – not at once but in the course of the next ten years – the way the world thinks about economic problems. There will be a great change, and, in particular, the Ricardian foundations of Marxism will be knocked away.”
At the moment I’m reading Keynes’s Essays in Biography. His discussion of Ricardo and Malthus’s corresondence is interesting – Keynes writes: “If only Malthus, rather than Ricardo, had been the parent stem from which nineteenth-century economics proceeded, what a much richer and wiser place the world would have been today!” That sentence follows several long passages from Malthus’s side of the correspondence, which Keynes sees as articulating ideas neglected by the subsequent tradition. For example:
We see in almost every part of the world vast powers of production which are not put into action, and I explain this phenomenon by saying that from a want of the proper distribution of the actual produce adequate motives are not furnished to continued production… [I]f it be true that an attempt to accumulate very rapidly will occasion such a division between labour and profits as almost to destroy both the motive and the power of future accumulation… must it not be acknowledged that such an attempt to accumulate… may be really prejudicial to a country.
Now here’s part of one of Keynes’s earlier footnotes:
Marx, criticising Malthus, had held that over-population was purely the product of a capitalist society and could not occur under Socialism. Marx’s reasons for holding this view are by no means without interest, being in fact closely akin to Malthus’s own theory that ‘effective demand’ may fail in a capitalist society to keep pace with output.
Quite so. It’s a large mistake to see the foundations of Marxism as ‘Ricardian’, in this sense, or to think that a knocking away of such foundations is also the invalidation of Marx. (I haven’t read Ricardo, I should add, or the modern neo-Ricardians, and Keynes may well be being unfair about Ricardo too.) Marx’s discussion of crises, of overproduction, of the economic imperatives that move capital from industry to industry (driven not by the pull of ‘equilibrium’, but constantly refreshed disequilibriums) – all this is much closer to the Malthus of ‘effective demand’ than to the caricatured ‘long termism’ Keynes attacks, in the General Theory and elsewhere.
Although, of course: central to Marx’s critique is the way in which the logic of capital subjects our lives to the imperatives of production, valorisation, accumulation. Whereas Malthus is clear about the final purpose of his economic theorising:
I expressly say that it is my object to show what are the causes which call forth the powers of production; and if I recommend a certain proportion of unproductive consumption, it is obviously and expressly with the sole view of furnishing the necessary motive to the greatest continued production… [A]n increase of unproductive consumption among landlords and capitalists may… sometimes be the proper remedy for a state of things in which the motives to production fail.