The terms neo-Marxian, post-Marxian and radical political economics were first used to refer to a distinct tradition of economic theory in the 1970s and 1980s that stems from the Marxian economic thought. Many of the leading figures were associated with the leftist Monthly Review School.
In industrial economics, the Neo-Marxian approach stresses the monopolistic and oligarchical rather than the competitive nature of capitalism. This approach is associated with Michał Kalecki, Paul A. Baran and Paul Sweezy.
Theorists such as Samuel Bowles, David Gordon, John Roemer, Herbert Gintis, Jon Elster and Adam Przeworski have adopted the techniques of neoclassical economics, including game theory and mathematical modeling, to demonstrate Marxian concepts such as exploitation and class conflict. The neo-Marxian approach integrated non-Marxist or "bourgeois" economics from the post-Keynesians like Joan Robinson and the neo-Ricardian school of Piero Sraffa.
Polish economists Michał Kalecki, Rosa Luxemburg, Henryk Grossman, Adam Przeworski and Oskar Lange were influential in this school, particularly in developing theories of underconsumption. While most official communist parties denounced neo-Marxian theories as "bourgeois economics", some neo-Marxians served as advisers to socialist or Third World developing governments.
Despite being an orthodox Marxist economist, Maurice Dobb was also associated with this current.
Big business can maintain selling prices at high levels while still competing to cut costs, advertise and market their products. However, competition is generally limited with a few large capital formations sharing various markets, with the exception of a few actual monopolies (such as the Bell System at the time). The economic surpluses which result cannot be absorbed through consumers spending more. The concentration of the surplus in the hands of the business elite must therefore be geared towards imperialistic and militaristic government tendencies, which is the easiest and surest way to utilise surplus productive capacity.
Exploitation focuses on low wage workers and groups at home, especially minorities. Average earners see the pressures in drive for production destroy their human relationships, leading to wider alienation and hostility. The whole system is largely irrational since though individuals may make rational decisions, the ultimate systemic goals are not. The system continues to function so long as Keynesian full employment policies are pursued, but there is the continued threat to stability from less-developed countries, throwing off the restraints of neo-colonial domination.
Position on the labor theory of value
Baran introduced the concept of "economic surplus" to deal with novel complexities raised by the dominance of monopoly capital. With Paul Sweezy, Baran elaborated the importance of this innovation, its consistency with Marx's labor concept of value and supplementary relation to Marx's category of surplus value.
According to Baran's categories, "[a]ctual economic surplus" is "the difference between what society's actual current output and its actual current consumption" and hence is equal to current savings or accumulation. "Potential economic surplus", in contrast, is "the difference between that output that could be produced in a given natural and technical environment with the help of employable productive resources, and what might be regarded as essential consumption". Baran also introduced the concept of "planned surplus"—a category that could only be operationalized in a rationally planned socialist society. This was defined as "the difference between society's 'optimum' output available in a historically given natural and technological environment under conditions of planned 'optimal' utilization of all available productive resources, and some chosen 'optimal' volume of consumption".
Baran used the surplus concept to analyze underdeveloped economies (or what are now more optimistically called "developing economies") in his The Political Economy of Growth.
- Baran, P. and Sweezy, P. (1966). Monopoly Capital: An essay on the American economic and social order, Monthly Review Press, New York.
- Jonathan Nitzan and Shimshon Bichler. Capital as power: a study of order and creorder. Taylor & Francis, 2009, p. 50.
- Samuel Bowles, "Post-marxian economics: Labour, learning and history", Social Science Information, Volume 24 (3): 507, SAGE – Sep 1, 1985.
- Richard D. Wolff and Stephen Cullenberg, "Marxism and Post-Marxism", Social Text 15 (Fall 1986), 126–135.
- Barry Stewart Clark, Political economy: a comparative approach, ABC-CLIO, 1998, p. 67.
- Baran, P.A. & Sweezy, P.M. (2012). "Some Theoretical Implications". Monthly Review. 64 (3).
- Baran, Paul A. (1957). The Political Economy of Growth. New York: Monthly Review Press. pp. 22–23, 41–42.
- Marxist Economics Courses, Links and Information
- Marxian Economics (archive from Schwartz center of economic policy analysis)
- Marxian Political Economy
- The Neo-Marxian Schools (archive from Schwartz center of economic policy analysis)
- A Marxian Introduction to Modern Economics
- International working group on value theory
- An outline of Marxist economics, Chapter 6 of Reformism or Revolution by Alan Woods
- The End of the Market A website containing a critical evaluation the idea of the market-clearing price which affirms Marx's theory that in capitalism profitability would decline
- The Neo-Marxian Schools ("Radical Political Economy")