For if it is rash to walk into a lion’s den unarmed, rash to navigate the Atlantic in a rowing boat, rash to stand on one foot on the top of St Paul’s, it is still more rash to go home alone with a poet. A poet is Atlantic and lion in one. While one drowns us the other gnaws us. If we survive the teeth, we succumb to the waves. A man who can destroy illusions is both beast and flood.

Virginia Woolf; ‘Orlando: A Biography’.1

Since the publication of the Volume I of Marx’s Capital one hundred forty seven years ago (in September, 1867), economists have been trying to (some even claiming to) find an answer to Marx and have been miserably failing in this task. Yet the tradition is being zealously maintained.

During the last decades of the nineteenth century (particularly from 1870s to 1890s), feverish attempts were made to clear the economic field of any trace of the classical theory of labor value, and particularly of Marx’s theory of surplus value. What remained after this clearing was ‘pure economics’ secured within the circles of a few schools – the Austrian School (Carl Menger, Friederich von Wieser, and Eugen Böhm-Bawerk), the Mathematical School (Léon Walras and William S Jevons), the Americal School (John B Clark), and the Cambridge School (A Marshall and Arthur C Pigou).

In the 1920s, in an attempt to find an answer to Marx, German economist Werner Sombart enunciated the theory of social pluralism explaining the evolution of society through co-existence of systems, with each newly emerging systems joining the foregoing one, rather than superseding it. He was just advancing upon another German economist Adolf von Wagner’s theory of mixed economy.

In the 1940s, Joseph Schumpeter was very much engaged with Marx while writing his ‘Capitalism, Socialism and Democracy’. And in the post-Second World War period, American economists John Galbraith, Pitirim Sorokin and the Dutch economist Jan Tinbergen advocated the theory of convergence maintaining that the evolution and inter-penetration of capitalism and socialism will result in the emergence of a so-called universal society, combining the best features of the two socio-economic systems. No need to add that Marx was very much in their minds while they were contemplating on convergence.

However, it is not necessary to go into that history. But it will be quite unfair not to mention John Maynard Keynes in this regard. Keynes finds his answer to Marx in the person of ‘the strange, unduly neglected prophet Silvio Gesell (1862-1930)’. He writes:

“Gesell was a successful German merchant in Buenos Aires who was led to the study of monetary problems by the crisis of the late eighties, which was especially violent in the Argentine. .. He returned to Switzerland in 1906 as a man of some means, able to devote the last decades of his life to the two most delightful occupations open to those who do not have to earn their living, authorship and experimental farming. .. The first section of his standard work was published in 1906 (at Les Hauts Geneveys, Switzerland) under the title ‘Die Verwirklichung des Rechtes auf dem vollen Arbeitsertrag’, and the second section in 1911 at Berlin under the title ‘Die neue Lehre vom Zins’. The two together were published in Berlin and in Switzerland during the war (1916), .. the English version .. being called ‘The Natural Economic Order’. In April 1919 Gesell joined the short-lived Soviet cabinet of Bavaria as their Minister of Finance, being subsequently tried by court-martial. The last decade of his life was spent in Berlin and Switzerland and devoted to propaganda. Gesell, drawing to himself the semi-religious fervor which had formerly centered around Henry George, became the revered prophet of a cult with many thousand disciples throughout the world. The first international convention of the Swiss and German Freiland-Freigeld Bund and similar organizations from many countries was held in Basle in 1923. Since his death in 1930 much of the peculiar type of fervor which doctrines such as his are capable of exciting has been diverted to other (in my opinion less eminent) prophets. Dr Buchi is the leader of the movement in England, but its literature seems to be distributed from San Antonio, Texas, its main strength lying today in the United States, where Professor Irving Fisher, alone amongst academic economists, has recognized its significance.

In spite of the prophetic trappings with which his devotees have decorated him, Gesell’s main book is written in cool, scientific language; though it is suffused throughout by a more passionate, a more emotional devotion to social justice than some think decent in a scientist. The part which derives from Henry George, though doubtless an important source of the movement’s strength, is of altogether secondary interest. The purpose of the book as a whole may be described as the establishment of an anti-Marxian socialism, a reaction against laissez-faire built on theoretical foundations totally unlike those of Marx in being based on repudiation instead of on an acceptance of the classical hypotheses, and on an unfettering of competition instead of its abolition. I BELIEVE THAT THE FUTURE WILL LEARN MORE FROM THE SPIRIT OF GESELL THAN FROM THAT OF MARX. The preface to the ‘The Natural Economic Order’ will indicate to the reader, if he will refer to it, the moral quality of Gesell. The answer to Marxism is, I think, to be found along the lines of this preface.2

Contrary to Keynes’ wishes, today no one (including Mr Piketty) remembers Gesell and his preface to ‘The Natural Economic Order’. Gesell is forgotten, but Marx still continues to preoccupy the minds of twenty-first century economists.

Marx’s long shadow is quite apparent in Thomas Piketty’s book from beginning to end. At every point, before propounding his conclusions, he remembers and cites Marx, but quickly backtracks. He strives hard to find an answer to Marx, but fails. He is not the first to do so, and not the last to fail. In the earlier parts of this critique, I have already dealt with the ‘Yes Marx No Marx’ syndrome of Mr Piketty, and hence, no further elaboration is needed.

However, one complaint remains, and very often mentioned in the book. He says, “He (Marx) no doubt lacked the statistic data needed to refine his predictions. He probably suffered as from having decided on his conclusions in 1848, before embarking on the research needed to justify them. Marx evidently wrote in great political fervor, which at times led him to issue hasty pronouncements from which it was difficult to escape. That is why economic theory needs to be rooted in historical sources that are as complete as possible, and in this respect Marx did not exploit all the possibilities available to him.” (Introduction) “To summarize: he (Marx) occasionally sought to make use of the best available statistics of the day (which were better than the statistics available to Malthus and Ricardo but still quite rudimentary), but he usually did so in a rather impressionistic way and without always establishing a clear connection to his theoretical argument.” (Introduction/Note 8) Further, “Despite important intuitions, Marx usually adopted a fairly anecdotal and unsystematic approach to the available statistics.” (Chapter Six)

Given the conditions under which Marx had to work, and even conceding that he might have missed some available data, anyone who has gone through his writings – Grundrisse, A Contribution to the Critique of Political Economy, three volumes of Capital, Theories of Surplus Value, etc. – will hardly agree with Piketty’s observations. Two facts are all too clear – one, Marx rigorously tried to collect and analyze all available statistics to the extent possible, and second, he critically and quite extensively examined almost all the currents of thought then existing. No book of his time comes even close to his voluminous works.

While describing the ‘History of the Ricardian Law of Rent’ (‘Theories of Surplus Value’, Part II), he studies and analyses the annual average prices of corn from 1641 to 1859 (quoting Sir Edward West’s ‘Price of Corn and Wages of Labor’, London, 1826). Moreover, in order to gain greater access to available data and literature, he got himself admitted to the Society of Arts and Trades (which was formed in 1754) in May 1869. It gave him access to the Society’s library, including the extremely large collection of works by the 17th-19th century economists. Many of them he used when working on Capital.

Marx’s economic writings contain very extensive critical examination of almost all the figures of classical political economy – William Petty, Boisguillebert, Benjamin Franklin, Anderson, Sir James Steuart, Condillac, Adam Smith, Sir F M Eden, Townsend, Wallace, Malthus, Bentham, Ricardo, James and John Stuart Mill, Wilhelm Thukydides, Roscher, George Ramsay, J B Say, Cobbett, Rodbertus, Hopkins, Sismondi, William Carey, Bestiat, etc.

And his great political fervor (in favor of the working class) was invariably accompanied with his relentless struggles against sectarianism.3 His political fervor did not cloud his vision to the extent that he could not see the objective facts and their historical sources. Contrary to Piketty’s observations, see what Bertrand Russel has to say about Marx in this regard, “.. He (Marx) was always anxious to appeal to evidence, and never relied upon any extra-scientific intuition.”4

Marx’s ‘Capital’ was met with a ‘conspiracy of silence’ and Kugelmann and Engels had to take considerable trouble to blow up this conspiracy. Kugelmann managed to publish anonymously a number of reviews by Engels in various newspapers. But soon, the book got organically linked with working class/socialist/communist movement.

Piketty’s book is an instant hit, a bestseller from the very start. I will not go into the marketing strategy of the publishers cashing in on the popular sentiment prevailing in the background of the ‘Occupy movement’ in the US and anti-austerity movements in Europe. Nothing can be more false and misleading than comparing Marx’s ‘Capital’ with Piketty’s ‘Capital in the Twenty-First Century’, and to call Piketty’s book Capital 2.0. To call him ‘Modern Marx’ or ‘Bigger than Marx’ is simply ridiculous.

The sound of the book that met with a ‘conspiracy of silence’ is still reverberating in the ears of 21st century economists. The fate of the book that is a blockbuster from the very start is at present anybody’s guess.

It was really rash for Mr Piketty to go home with Karl Marx while writing his book. In that case he should not have hoped to survive the teeth and to avoid succumbing to the waves.


  1. Virginia Woolf; op.cit.
  2. Keynes, John Maynard; ‘The General Theory of Employment, Interest and Money’ (1936), Chapter 23, ‘Notes on Mercantilism, The Usury Laws, Stamped Money and Theories of Under-consumption’. A Project Gutenberg of Australia eBook, February 2003. This eBook was produced by Col Choat: colc@gutenberg.net.au
  3. In his letter to the Lassallean Johann Baptist von Schweitzer (October 13, 1868), Marx wrote, “The sect seeks its raison d’être and its point d’honneur not in what it has in common with the class movement but in the particular shibboleth distinguishing it from that movement. ..Yet instead you, in fact, demanded that the class movement subordinated itself to a particular sect movement. Your non-friends concluded from this that you wished to conserve your ‘own workers’ movement under all circumstances.” Marx-Engels Collected Works, Volume 43; op.cit.
  4. Russel, Bertrand; ‘History of Western Philosophy’, George Allen and Unwin Ltd., London, 1967.

[This critique is divided in eight parts, tentatively titled as: i. Apocalypse and Exuberance; ii. Data and Dialectics; iii. Capital Social and Self-Expanding; iv. Wealth Inherited and Created; v. Century Twentieth and Twenty-First; vi. Yes Marx No Marx; vii. London Chicago Paris; and viii. Thank You Mr Piketty.]

October, 2014.



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