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This chapter argues that the Marxian theory of exploitation underlies the concepts of surplus and deficit industries that appear in Sraffa’s (1960) Production of Commodities by Means of Commodities. This is seen from archival research of the unpublished papers of Piero Sraffa housed at the Wren Library, Trinity College, University of Cambridge. There it is shown that the origin of these concepts lies in the Marxian theory of exploitation that Sraffa developed regarding the notion of the ‘pool of profits’ the Italian economist utilized over a 14-year period from 1942 to 1956. The chapter engages in an extensive textual study of the archival evidence and then presents a simple analytical model of these relations.

In theorizing the dynamics of social processes, dialectical thinking informs Marx's historical materialist inquiries and both – dialectics and historical materialist principles – inform his political–economic analysis. In conceptualizing empirical observations during this work, Marx (1973b, p. 101) assumes that the “concrete is concrete because it is the concentration of many determinations, hence unity of the diverse” and that “With the varying degree of development of productive power, social conditions and the laws governing them vary too” (Marx, 1992, p. 28). This methodological tack strives for the flexibility needed for analyzing patterns in long-term social development (the structure of history) as well as the logic of specific systems in their totality and flux (the history of structures).

This paper is a translation of the third and most important chapter of Keizaigaku shi (History of Political Economy) by the Japanese Marxist economist Samezō Kuruma (1893–1982), first published in 1948. Kuruma discusses in detail the achievements and limitations of the Classical school of political economy. He examines the fundamental ideas of Adam Smith and David Ricardo regarding the determination of commodity value and the source of surplus-value, and then looks at how these ideas are connected to production price and profit. Kuruma notes that Smith and Ricardo managed to arrive at the essential labor theory of value, but that neither could correctly apply this theory to adequately explain phenomena in the realm of competition – either abandoning the labor theory of value altogether to embrace a composition theory of value (Smith) or directly applying the theory to explain phenomena without grasping the intermediary processes of development (Ricardo). Kuruma's critique of Smith and Ricardo highlights the achievement of Marx in overcoming the limitations that ultimately led to the breakdown of the Classical school of political economy.

While many inconsistencies can be found in Marx's theory if one chooses a view of reality in which time is absent, these inconsistencies disappear if the view is taken that time is an essential component of that theory. The debate is thus between the simultaneist and the temporalist camp. This article sides with the temporalist approach but at the same time it argues that both sides have focused mainly on quantitative and formal logic aspects. This is the limit of the debate. The debate should move on from being only a critique and counter-critique of each other applying only formal logic to the issue of consistency to showing how and whether the different postulates (a time-less versus a time-full reality) and the interpretations deriving from them are an instance of a wider theory of radical social change. From this angle, simultaneism implies equilibrium and thus a view of the economy tending toward its equilibrated reproduction. Capitalism is thus theorized as an inherently rational system and any attempt to supersede it is irrational. This is simultaneism's social content. Temporalism, if immersed in a dialectical context, reaches the opposite conclusions: the economy is in a constant state of nonequilibrium and tends cyclically toward its own supersession. Capitalism is inherently irrational and any attempt to supersede it is rational. Simultaneist authors should now show how their approach to the issue of consistency fits into a broader theory furthering the liberation of Labor.

To choose a dialectical view of temporalism is thus to take sides for Labor.

The labor theory of value (LTV) offers a lucid and forceful example of a “theory” thought to stand outside “history.” Considered as an “objective” form of theorizing, the LTV seeks transhistorical truths about the relationship between humans and nature – whereby, as everyone knows, value in the world is produced by the fundamental force of human labor power. Marx is typically taken to have subscribed to some form of the LTV, and thus to have signed on to this form of theorizing. This article refuses to treat Marx as an analytic, ahistorical theorist who would either affirm or deny the LTV. Rather, I read Marx as a genealogist who excavates the story of labor and value within the specific historical context of an emerging capitalist social formation. This genealogical approach to Marx, and particularly to his less-often-discussed, Contribution to the Critique of Political Economy, shows plainly that Marx never subscribed to the LTV, but more importantly that he eschewed the form of theory that the LTV presumes. Rather than seeking to make transhistorical theoretical claims about the relation between labor and value, Marx meant to demonstrate to his readers something about the way in which a definite and concrete (historically situated) capitalist social formation establishes value. A capitalist social formation establishes its own specific value relations, by first constituting, and then dissimulating, a link between labor and value.

This paper discusses labor value and the rate of exploitation in the global economy using international input–output tables. Labor value is defined as the multiplication of the labor coefficient and Leontief inverse. Exploitation means that the amount of labor embodied in the received wage commodity is less than the amount of the labor actually sold. Therefore, the Fundamental Marxian Theorem, which states that the conditions for the existence of profit and those for the existence of exploitation are the same, should be modified to stipulate that the existence of profit requires exploitation in at least one country. In other words, exploitation may not exist in some countries (non-exploitation). In the context of international input–output tables, we introduce the concept of global labor value, which is the vector of embodied labor in various countries. In the empirical study using an international input–output table, we find that (1) there are non-exploitation cases in several countries. (2) During the time period 1995–2009, the rate of exploitation increased in Asian countries, namely China, Japan, Korea, and Taiwan, whereas the advanced countries other than Asia faced a decreased rate of exploitation.

For Marxists, the present controversies are rooted in Marx's own development and exposition of the labor theory of value, especially its presentation in Volumes I (Marx, 1954 [1867]) and III of Capital. As is well known, in Volume I, Marx begins with his analysis of commodities, emphasizing the role of human labor in both its concrete and abstract aspects, and from that he develops (1) the concepts of (exchange) value, of socially necessary labor time, and of its expression in the form of money and the distinction between value and price; (2) the concepts of capital and of surplus value; and (3) the concept of the commodity labor power. With these concepts, his analysis of capitalist production lays bare the nature of capitalist exploitation and links the phenomenon of profit to surplus value (i.e., the unpaid labor time of productive workers). In Parts I and II of Volume III, Marx, explicitly allowing for the interplay of many different capitals, endeavors to show how surplus value is converted into profit, how the rate of surplus value is converted into the rate of profit, how the general rate of profit is formed, and how the values of commodities are transformed into prices of production. He claimed that the transformation preserved the following equalities: total value=total prices; total surplus value=total profits; and, the rate of profit=the rate of surplus value. Marx's presentation of this material in Volume III is, unfortunately, quite rough, since this material is comprised of manuscripts that he had prepared prior to the publication of Volume I in 1867. These manuscripts were not, however, in a final, finished state, and unfortunately Marx never got around to getting them ready for publication.

This paper subjects to empirical testing the standard (based on the notion of vertical integration) method for the estimation of labor values and prices of production against an alternative one known as the Temporary Single-System Interpretation (TSSI), an approach that finds strong support among a new generation of researchers. Our empirical findings from the Canadian economy suggest that both methods give rise to estimates of labor values and prices of production that are surprisingly close to observed prices. Further examination however reveals that the TSSI contradicts some of the basic tenets of logical consistency of the theory that indents to vindicate. These results lend support to the standard Marxian theory, and the estimating methods associated with it constitute a fertile ground for further research.

This essay explores certain aspects of single product industry basic systems of the type Sraffa develops in Part I of Production of Commodities by Means of Commodities. It focusses on triangular trade as the simplest expression of the more general n-commodity case. Two elements of the framework are explored: (i) the relation of exchange between all commodities, conceived as the configuration of exchange which is applicable to the subsistence and surplus models, and (ii) the value/price expressions of labour time, applicable to the surplus model only, which posits the productivity of, remuneration to and extraction from living labour added to the system. This analysis complements and extends the Marxian reading of Sraffa’s notions of surplus and deficit industries first explored in Carter (2014b). The methodology of ‘given quantities’ in expositing the relations developed is adopted in this essay as it corresponds to the same method employed by Sraffa. This allows readers to easily move from the present essay to Sraffa’s book and importantly his archival notes which are now for all interested parties available as colour digital images on the Wren Library website.

These two books reflect very different attitudes to classical economics: O'Brien writes from a neoclassical standpoint, Napoleoni from a Marxist one. Two questions deserve consideration. Is anything worthwhile to be gained by devoting attention to the works of the classical economists (and of Marx)? Where, if we do turn to the classics, do they lead us?