A Defense of the Fundamental Marxian Theorem
Introduction: The Fundamental Marxian Theorem 1 - the proposition that capitalist exploitation is a necessary and sufficient condition for the existence of profits - has been negatively appraised on several grounds. 2 Perhaps the most damning indictment is that the proof is tautological; “‘...profit is the source of surplus value’ is as formally valid as vice versa; ‘only if the profit rate R* can be positive… can the rate of surplus value r* be positive…’” (Samuelson 1974, 64). It will be argued that this claim is specious. The first section re-establishes the mathematical proof in Leontief/Sraffa-style notation. The analysis will proceed as follows: technical conditions of production → value magnitudes → complete prices → prices of production → generalized proof. The second section unpacks the rationale behind this procedure. Samuelson’s confusion comes primarily from not understanding Marx’s historical-logical method. There are valid, extra-mathematical reasons to assert that