The New Value debate and the birth of a paradigm

This article updates the paper ‘Mr Marx and the Neoclassics’ presented at the July 1996 conference of the History of Economics Society in Vancouver. It assesses the challenge presented by temporal analysis to both neoclassical orthodoxy and orthodox interpretations of Marx’s thought. It provides a rigorous value-theoretic account of the falling profit rate, of crisis, and of unequal world development rooted in an account of the value-price relation that conforms to Marx’s disputed expectations. This challenge represents a convergence of a number of different strains of thought. It involves a systematic reconsideration of the role of money and its relation to value. And it explores an alternative to the persistent dogma that economic movement may be captured by the mutations of a static or simultaneous equation system in which the only dynamic effects are the temporal evolution of its parameters. This alternative view reinstates the notion which Marshall and Walras sought to extirpate, of successive or temporal causation. The combination of these two insights has been variously termed the sequential nondualist or temporal approach (a term due to Gil Skillman). This revolution in thought, it is argued, goes beyond Marxist economics and offers a rigorous foundation for political economy as a whole. It has met powerful resistance. The conclusion drawn is that two exercises are needed: To enquire into the reasons this resistance, and to situate the ‘new’ theory – in actuality a reassertion of classical orthodoxy – in the general framework of the history of political economy.