As a warning, this post has nothing to do with the US elections.
Right now, the undergraduate social theory class for which I am GSI-ing* is covering Marx’s Capital. Capital is a tough book for sociology majors, and graduate students, even in comparison to some of the rest of the quite dense canon. One reason it’s so dense, I think, is because most sociologists lack familiarity with both Hegelian thought and 19th century political economy.** Having read big chunks of Smith, Malthus, Ricardo, and Mill, for example, can make Marx a lot easier to swallow. Marx’s Labor Theory of Value is not quite so radical when lined up next to Smith and Ricardo, who said many of the same things, albeit with a very different political take.*** Economics soon shifted away from the labor theory, towards marginalism, and I wonder if Marx’s reputation suffered because of it. While Smith and Ricardo themselves are lionized by contemporary economics, their labor theories of value are downplayed or ignored in favor of other insights, while Marx’s is made central and used to critique him.
This leads to the post’s title question. How did Marx’s contemporaries viewed his work. Marginalism was on the rise by the 1870s, but it was not yet the only game in town. How did the Smithians, Ricardians and Millsians of the late 19th century view Marx? I assume they were mostly ideologically opposed to his take on things, although perhaps not uniformly, but what was their theoretical critique of Marx like?
Any recommended citations or primary sources would be much appreciated!
* Equivalent to TA-ing, but with a better union.
** I certainly did when I started graduate school in sociology.
*** Hence Samuelson’s derisive comment that Marx was a “minor post-Ricardian.”
A (Budding) Sociologist's Commonplace Book 
replicantreplica
/ November 7, 2012I’m currently working on a similar question for my history of economics project. I will let you know if I come across anything particularly relevant.
I really enjoy your posts and I think you and I have a great deal in common in our interests. Keep it up!
Best,
Chad
Ph.D. candidate
UC San Diego
Dan Hirschman
/ November 7, 2012Hm. First source I’ve found that comes close to addressing it directly is Brewer 1995 “A Minor Post-Ricardian: Marx as Economist” in History of Political Economy. Brewer suggests that Marx’s contemporaries basically just ignored him, and then attempts a rational reconstruction to show why. Brewer does do a nice job pointing out where some of the confusion modern readers have with Marx would have been clear for his contemporaries who were well-versed in Ricardo – but Brewer also argues that Marx has the same problems as Ricardo, in re: the theory of value, and worse in fact since Marx hinges more on labor as the sole source of value, so it made sense for his contemporaries to ignore him. Interesting.
andrew
/ November 7, 2012I think a lot of people don’t realize how similar a lot of Marxist theory is to generic rat choice or the libertarian Public Choice stuff
CharlieMcMenamin
/ November 16, 2012Can I suggest you talk to your academic library about ordering Karl Marx: Critical Responses (ed Roberto Marchionatti) Routledge, London, 1998.
Or just pop up to Amazon and buy it yourself: all four volumes for the bargain price of £831.25 (delivery free in the UK).
Me, I rarely leave home without a copy of at least one of the four volumes tucked under my arm…
Graham Peterson
/ November 23, 2012Gale Cengage Learning has a database, The Making of the Modern World which documents 8 zillion primary sources on liberal thought and political economy in minor pamphlets, letters, and texts you won’t get from reading the salient books. Michigan might have access; I don’t know.
“Marx’s Labor Theory of Value is not quite so radical when lined up next to Smith and Ricardo”
If you mean that a Lockean intuition that value derives originally in labor was common among 19th century political economists (and remains today), then yes. Marx tries (and fails) to derive a deductive theorem about the fundamental exploitation involved in all arbitrage. Marx avers that value comes originally and *only* from labor. Whereas Ricardo and Smith, just like the marginalists that came after them, recognized that labor was one, on a list of sources of value.
“Economics soon shifted away from the labor theory, towards marginalism”
Marginalism accounts for labor’s value — it does not discard it.
“While Smith and Ricardo themselves are lionized by contemporary economics”
Most contemporary economists haven’t read more than a few pages of Smith or Ricardo, nor do they ever talk about them.
“their labor theories of value are downplayed or ignored in favor of other insights”
Well yes, because: paragraph 2.
“I assume they were mostly ideologically opposed to his take on things, although perhaps not uniformly”
This is completely anachronistic. The classical political economists were extremely open to criticisms of markets, made a lot of them themselves, and bothersome questions on how markets worked and affected society motivated all of their work. This sort of “the ends (conclusions that markets are great) justified the means (assume markets are great)” accusation of ideology is wrong. If you’re looking for a historical derivation of the development of neoliberal thought, and willing to impose such large and incorrect assumptions on classical authors — you will surely find (an unconvincing) one.
It is not true now that all or even most contemporary economists are apologists for liberal trade policy and laissez faire et. al. Nor was it true in the 19th century that Mill, Smith, Ricardo, and Jevons and the other marginalists who followed were victorian apologists.
If you want a sort of Milton Friedman, free market pundit character to fit this story of ideology and politics in 19th century history – you will find one in Bastiat. But then you would be forced to account for how tiny of an impact Bastiat had on the history of economic thought. Anyway, very few notable political economists challenged Marx formally.
If you want theoretical critique of Marx’s work by his contemporaries — look at Joseph Proudhon.
Dan Hirschman
/ November 23, 2012Dear Graham,
Thanks for your comment. A couple responses:
1. Smith and especially Ricardo did not just assume that Labor was one of many sources of value. They assert that Labor is the source of value, or the most important source, or so on. It’s confused – or at least, was taken to be so for a hundred years in the secondary literature (see Hollander’s writings in the early 1900s on Ricardo). Ricardo was evidently troubled by the confusion, and the related problem of finding a stable unit of value to measure change over time, and never found a satisfying answer. Stigler takes on the issue in “Ricardo and the 93% Labor Theory of Value”), where he argues that Ricardo is responding to Smith, and in fact is advocating a cost-of-production theory of value, but one that for practical purposes assumes a stable wage rate.
But I would not agree that contemporary economists hold on to even a Lockean LTV. Value is gone from contemporary economics, replaced by utility. It’s a very post-modern position: things are valuable because they are valued; there’s not a sense of a foundation really. This reframing is important because it connects to why students encountering Marx’s economics for the first time perceive as big a shock as they do. Reading him after reading Mankiw, instead of after reading Ricardo, produces a much bigger gulf. Yes, Marx is pushing the LTV as a stronger analytical theory (and one that most later critics have found wanting, though not all) than Ricardo or Smith… but the three are much closer together in their problematics and analytical tools than any of them are to contemporary economics.
2. I agree completely that contemporary economists do not read Smith or Ricardo (nor Marx!). What’s interesting to me is that they still tend to revere Smith and Ricardo, while relying on a criticism of Marx that applies (at least to some extent) to them as well. I am thinking here of textbook expositions (which frequently invoke Ricardo and Smith as founding fathers, even if they do not engage with them heavily), The Worldly Philosophers, and such – not the graduate economics curriculum, say. Now, it’s totally reasonable to argue that the parts of Smith and Ricardo they value (especially Ricardo’s theory of comparative advantage) don’t rely on the LTV – but one can find insights in Marx that don’t rely on the LTV either (as many contemporary Marxians who reject the LTV do). Also, it’s worth noting that one of the things Smith is most praised for is pretty clearly something he did not believe (that a competitive market system perfectly organized economic activity through the “invisible hand”, cf. all of Gavin Kennedy’s recent writings, as well as Emma Rothschild and others).
3. I apologize if I sounded like I was searching for the roots of neoliberal ideology (whatever that means, cf. Mudge 2008) in classical political economy. I was very much not. I was, however, thinking of Rothschild’s Economic Sentiments, which traces how Adam Smith’s work became understood as “the employer’s creed”, and more generally how political economy had (at least in my limited understanding) a relatively conservative or reformist (and hence, anti-radical/revolutionary/Marxist) bent in the late 19th century. Yes, there was plenty of criticism of the failures of markets in the late 19th century – see, for example, the founding of the ASSA/AEA discussed by various historians of social science, with its focus on advocacy and reform, as well as the prominence of the German historical school and the beginnings of the institutionalist movement. But, at least in the US and UK, I do not believe there were a lot of political economists who self-identified as Marxists, nor revolutionaries of other stripes. That’s what I meant when I said that I imagined most of Marx’s near contemporaries would not have been in agreement with his work – not that they were complete right-wing reactionary pro-market ideologues, or anything of the sort.
4. Thanks for the Proudhorn suggestion. Do you have a particular text in mind?
Best,
Dan
Graham Peterson
/ November 24, 2012“Also, it’s worth noting that one of the things Smith is most praised for is pretty clearly something he did not believe (that a competitive market system perfectly organized economic activity through the “invisible hand””
The business press and politico bloggers praise Smith for the above. Economists do not, generally.
“I am thinking here of textbook expositions (which frequently invoke Ricardo and Smith as founding fathers, even if they do not engage with them heavily), The Worldly Philosophers”
Introductory textbooks and the most critical exposition of the history of economic thought in the popular press are not a good sample of what economists think. Nobody cares about Marx, Smith, or Ricardo in the economics department except to gather nominal quotations to dress the title page of a paper with — and even that — rarely.
“things are valuable because they are valued; there’s not a sense of a foundation really.”
And that is unnerving, but true. Looking for “real value” or “foundations” in the economy is a futile materialist exercise, not unlike looking for “real structure” and “foundations” in extra-economic institutions by leveraging biology. People do not like the idea that economic values are malleable, relative structures, any more than they like the idea that their heart-felt ethics and frames are malleable, relative structures.
And no, I don’t have a Proudhon book in mind. I wikied him the other day as I assailed the idea that property is unethical, and saw the bit about him and Marx becoming fast friends over their work and then falling out in a bitter disagreement later.