Marxist studies are taken more seriously in the French-speaking than the English-speaking world. In France there are a number of scholars who are prepared to use the methods and concepts of Marxism for investigating the development of contemporary society with intelligence, flexibility of approach and complete intellectual integrity without committing themselves to any party line or to sterile sectarian polemics. (This is not to say there are none such in English-speaking countries; but they are rare.)

One very important French Marxist is Jean Marchal, whose Deux Essais sur le Marxisme I reviewed for the Economic Journal (September, 1956). The second of the two essays, on the distribution of the national income, is particularly valuable. Now we have a two-volume Traité d’Economie Marxiste by the Belgian Ernest Mandelfootnote¹, which is a serious and important work, showing that Marxist theory can be used as a framework for the exposition of the economics of today.

This work illustrates both the strength and the weaknesses of Marxian economics. One of the great strengths of Marxist economic theory is its sociological basis. In his first chapter, Mandel brings out the importance in any and every society of the distinction between necessary and surplus labour, necessary and surplus product. In any and every society a certain portion of the social product is necessary for keeping the individuals composing the society alive and capable of productive work (and of carrying out other necessary social functions) and for replacing them by a new generation. Any product over and above this is surplus product. This is the part of the social product that is available for various purposes, other than bare existence. According to the social structure (Marx’s “relations of production”) the surplus product is used for promoting social growth (growth in numbers, growth in social complexity); for the development of religion, art and science; and for the pomp and luxury of a ruling class (or classes). In exceptional cases some of the surplus product may provide for the ordinary members of society (or some of them) a level of existence above bare subsistence. In other words, the disposal of society’s surplus product is a key to social evolution. Mandel brings out very clearly the application of this concept to pre-history, history and anthropology.

In further chapters, the author applies Marxian methods very successfully to the development of economic institutions—to the beginnings of market economy in the peasant-and-craftsman stage (“Simple commodity production”), the growth of pre-industrial commerce, credit, money, and the growth of modern industry (capitalist production). He devotes a chapter to agriculture and to various forms of land tenure. Then monopoly capitalism and imperialism. In the case of the two latter his examples are drawn mainly from pre-1938 experience: he does not seem to allow sufficiently for the big changes that have taken place in these aspects of capitalism since the war. He gives some very good examples of the organized restriction of output by cartels, etc., before the war: but does not seem to allow for the present phase (especially noticeable on the Continent and in North America) of increased productivity. Without being unduly impressed by the various “economic miracles” held up for our admiration one can’t help feeling that the restrictionism of the nineteen-thirties has been left behind (except perhaps in Great Britain). Similarly, he does not allow for the fact that imperialism has been assuming new (and much more subtle) forms in this age of the cold war, Marshall Aid and “de-colonization”. He has a chapter called “The Epoch of the Decline of Capitalism”, in which he relies too much upon the pre-war record, and does not give capitalism enough credit for its remarkable post-war recovery and its new-found vigour. (Again Great Britain is a partial exception.)

Mandel devotes a chapter to periodic crises. Here, like nearly all economists, the complexity of the subject defeats him. Even Marx, although he foreshadows nearly every subsequent theory of crises (including Keynes), never really saw the wood apart from the confusion of the trees. Finally, there are some good chapters on the Soviet economy, the economy of the period of transition, and the economic system of a (fully) socialist society.

Mandel’s book also shows (but not so strongly as other Marxist works) the weakness of Marxian economics.

To use modern terminology, economic theory is concerned with two aspects of economic life: one (now called micro-economics) with the detailed adjustment between the smallest units of economic activity (individuals, households and firms); the other (now called macro-economics) with the inter-relations of large aggregates (national income as a whole, consumption, investment, exports, imports, etc.). Broadly speaking, one can say that the conventional demand and supply analysis (including imperfect competition) is micro, while employment theory is macro. The classical economists (Smith and Ricardo) were interested in both; but, especially Ricardo, they had a leaning towards macro-economics. Marx’s interest was emphatically on the macro side. But the bourgeois economists who followed the classicals (whom Marx called “vulgar economists”, not because he disapproved of their table manners, but because he thought they “vulgarized” economics—distorted it and corrupted it so as to make it acceptable to the successful business-men of the mid-nineteenth century) were more and more concerned with micro-economics. The revolution in economic thought made by the marginal-utility theorists of the ’70s (Jevons, Walras and the Austrian School) was almost entirely on the micro side. Marshall was mainly a micro theorist. Only with Keynes was there a return of interest in macro-economics.