Simon Clarke’s Marx, Marginalism, and Modern Sociology is, for starters, an excellent history of bourgeois economic understandings of capitalism. Clarke weaves the ‘trinity formula’ — a formalized rubric consisting of wages, rent, and profits — throughout his analysis as a means by which the economists, from classical to vulgar to marginalist, may be understood. Beginning with Adam Smith’s foundational understanding of the trinity as corresponding likewise to ‘revenues’ realized by distinct social classes of labor, landlord, and capitalist, through Ricardo’s reluctant labor theory of value application to a pseudo-Smithian redux, cost of production theory, and finally the marginalist ‘revolution’ which abandoned entirely the Smith-Ricardian trinity, deemed too political and implicitly ‘socialist’, in favor of an abstract model of capitalist markets predicated on the total sovereignty of the rational individual, utterly divorced from the Comtean pre-political mewlings about moral rectitude or the responsibility of social institutions to engender rationality in those individuals.
There is a broad history of political economics here, told chronologically moving from thinker to thinker, in which the insurgent bourgeois and their political economy rather rapidly shifts from radical broadside against feudal authority to apologia for the new ruling class; from an assurance of the ‘real’ value and existence of the landlords to their consideration as a dead weight around the neck of the ‘sterile’ capitalist class, and finally up to the separation of politics and economy altogether (see: Ellen Wood) in the 1860s and 70s and the appropriate calving off of economics as a naturalized and naturalizing science, with sociology left to pick through the ruins in futility. This new economics (or marginalism) set about busily establishing a framework in which production and exchange itself were necessarily external to the question of market functioning precisely because it is these categories, truly so central to the capitalist mode of social metabolism, which invited political injunction on the part of the working class. Clarke is explicit: for him, sociology only gains a true disciplinary existence when Max Weber establishes the limit of sociological inquiry:
[He] rejected the primacy accorded by the economists to economic rationality as an ethical ideal, insisting that political, religious, moral or aesthetic criteria provided just as valid a 'basis for evaluation, and correspondingly provided just as valid an orientation of social action. Sociology could become an autonomous discipline because it would study forms of social action that could not be comprehended by economics: it could embrace all those phenomena that could not be reduced by the dogma of self-interest.
This said, sociology nevertheless ratifies that exact same dogma of self-interest, or the abstract, classical idea that selfishness in a capitalist system necessarily produces a generalized social good by default.
Clarke’s analysis particularly shines in detailing the precise utility of positivism and a sort of ‘cult of growth’ which, explicit in capitalism’s fledgling years, ultimately had to be given up in the course of its development. Positivist views pervaded classical political economy, functioning as a mandate for the continued expansion of the global market, albeit veiled in exhortation about freedom and the correctness of Reason, of Burke’s laws of capitalism, nature, and God (all the same thing). What Clarke points out is that at a certain point, shockingly early in capitalism’s historical development, the delirious panglossic lip service which accompanied capitalist universalization actually was revealed as a weakness, or more specifically, was identified as a political project. Early socialists were able to critique positivism along with a critique, using Ricardo’s theory of value, that labor was not receiving its just share of its produce (losing revenues to rent and stock). As such, the Rationality and perfection of the capitalist system, especially the prevailing view at the time which rejected, ignored, or moralized about the inevitability or even possibility of capitalist crisis, quite readily became revealed as utter farce to even an as-yet-undeveloped labor radicalism. Subsequent theories, recognizing the untenability in Ricardo’s LTV (which was, of course, later extended by Marx, who funnily enough thought Ricardo himself to be a bore), quickly attempted to formulate reasons why labor could and should not receive the totality of its produce, and why wages must remain where they were (subsistence levels, to be clear), such as Malthus’ wage-fund theory and theory on the problems of underaccumulation. What was needed was a more flexible economics, which could accommodate reforms and absorb critique and crisis in a way that the staid theory of classed revenues and the primacy of production could not.
Positivism, as well as its precondition of growth/expansion in extremis, was rejected by the early marginalists, such as Jevons, who moved away from value in favor of the modeling of price. But even this was not the true intention of their project; at bottom, the newfound focus on price allowed for if not the rejection than the diminution of the trinity formula, as price subsumed the three revenues underneath a new heading in which the individual revenue contributions were wholly accounted for and exhausted, and additionally seemed to fall out of the aether, with no possible origin in either labor-time or production costs. Ultimately, modeling price made it entirely possible to ratify the ‘total’ rationality of market-level distribution in which production and consumption (as well as circulation!) were completely outside the actual functioning of the market (as least in early marginalist models). Price was likewise based on a heavily modified, so-called ‘subjective’ theory of value, itself based on the definition of ‘utility’. On page 190, Clarke clarifies: “[t]he price an individual will be prepared to pay for a good will correspond not to the total utility of that good, but to the utility of the marginal unit of the good that is acquired”. Continuing, Clarke writes (brackets mine):
More sophisticated developments of marginalism recognized the role that costs had to play in the determination of prices by recognizing that factor supplies [that is, commodity input into the total economic system] were not fixed. The prices of the factors of production are then determined by the interaction of demand and supply. The demand for each factor will be dependent on its marginal productivity, which is the monetary expression of its marginal contribution to utility [individual utility/subjective usefulness]. Since factors will be used in the most productive outlets [markets or regions] first, the marginal productivity of each factor will decrease as relatively more of that factor is used [supply outstrips demand]. Thus the demand for the factor will be a decreasing function of its price.
Thus, human society is subtly yet utterly reconceptualized. As Clarke notes, the intensive focus on the isolated and utterly rational abstract individual in marginalist theory leads onward to an aggregative view of social institutions and phenomena as consolidations of individuals or Simple Facts which may be thought of as necessary and quietist “technical instruments” instead of contingent formations within a particular historical set of social metabolic relations. In fact, the dilation on the individual is so extreme it ultimately creates a psychological (or ‘behavioral’, to use contemporary terminology) framework, but one which cleverly (or stupidly) avoids making any psychological or moral claims, other than this creature blindly and monomaniacally seeks to fulfill needs and extract utility and use from objects, like Gordon Pask’s tortoises following their lights, a being with no soul in a playpen of necessary and irresistible desideratum.
Finally, Clarke throws down an interesting but intriguing gauntlet halfway through the book, remarking on contemporary Marxist political economy’s tendency to defend a Ricardian theory of classical political economics, and indeed to see him and his (especially later) work as part and parcel of this tradition, instead of, of course, a critique of political economy. Clarke spills much ink over this precise issue, likely owing to his own centering of the young Marx (of the 1844 Manuscripts and the obscure Comments/Notes on James Mill (which I must read)) and his account of alienation and alienated labor as prefiguring private property, which completely upends not only political economy up until that time but also Proudhon’s and Engels’ critiques from inside political economy. Clarke is convinced that Marx’s study of political economy allowed him to upend it from without. I’m inclined to agree.