Keynes on Marx versus his own approach

Keynes wrote very little on Marx although at one point he dismisses the labour theory of value as ‘‘out of date controverialising‘‘ and at another refers to Marx as a lesser figure than Sylvio Gessell, the German revolutionary Minister of Finance in the short lived Bavarian Soviet Republic in 1919 and former merchant and  monetary theorist. But there is an intriguing short passage in his collected works that offers an insight  as to what he thought of the great Hegelian of the nineteenth century.

Keynes compares Marx‘s notion of M-C-M‘ where M‘ exceeds M to the widespread view that the chain should read C-M-C‘.  Keynes writes as follows in a note in volume xxix, p.81, (CW Macmillan, Cambridge University Press for The Royal Economic Society, 1979.)


The excess of M‘ over M is the source of Marx‘s surplus value. It is a curiosity in the history of economic theory that the heretics of the past hundred years who have in one shape or another, opposed the formula M-C-M‘ to the classical formula  C-M-C‘ have tended to believe either that M‘ must always and necessarily exceed M or that M must always and necessarily exceed M‘, according as they were living in a period in which one or the other predominated in actual experience. Marx and those who believe in the necessarily exploitatory character of the capitalist system, assert the inevitable excess of M‘ ; while Hobson, or Foster and Catchings or Major Douglas who believe in its inherent tendency towards deflation and underemployment, assert the inevitable excess of M. Marx ,however, was approaching the intermediate truth when he added that the continuous excess of M‘ , would be inevitably interrupted by a series of crises, gradually increasing in intensity, or entrepreneur bankruptcy and underemployment, during which presumably, M must be in excess. My own (Keynes‘s argument) should at least …serve to effect a reconciliation between the followers of Marx and those of Major Douglas, leaving the classical economists still high and dry in their belief that M and M‘ are always equal !

This passage aside from its somewhat limited  interpretation of surplus value shows that Keynes was always keen to appeal to progressives to recruit them to the cause of establishing a revolution in economic thought in the midst of the Great Depression and that Marx had a large following among the young during times of crisis.



About haroldchorneyeconomist

I am Professor of political economy at Concordia university in Montréal, Québec, Canada. I received my B.A.Hons (econ.&poli sci) from the University of Manitoba. I also completed my M.A. degree in economics there. Went on to spend two years at the London School of Economics as a Ph.D. student in economics and then completed my Ph.D. in political economy at the University of Toronto. Was named a John W.Dafoe fellow, a CMHC fellow and a Canada Council fellow. I also was named a Woodrow Wilson fellow in 1968 after completing my first class honours undergraduate degree. Worked as an economist in the area of education, labour economics and as the senior economist with the Manitoba Housing and Renewal Corporation for the Government of Manitoba from 1972 to 1978. I also have worked as an economic consultant for MDT socio-economic consultants and have been consulted on urban planning, health policy, linguistic duality and public sector finance questions by the governments of Manitoba, Saskatchewan,the cities of Regina and Saskatoon, Ontario and the Federal government of Canada. I have also been consulted by senior leaders of the British Labour party, MPs from the Progressive Conservative party, the Liberal party and the New Democrats on economic policy questions. Members of the Government of France under the Presidency of Francois Mitterand discussed my work on public sector deficits. I have also run for elected office at the municipal level. I first began to write about quantitative easing as a useful policy option during the early 1980s.
This entry was posted in Uncategorized. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s