Andrew Kliman's book seeks to reclaim Marx' "Capital" as a work of internal consistency and a valid, if not necessarily correct, exposition of the Marxist Law of Value. His main opponents in this, interestingly enough, are other Marxists, and the followers of Sraffa, both of which have done everything imaginable over the past century to propagate the myth that there is a "transformation problem" between prices and values in Marxist economic theory, and that Marx needs to be 'corrected' to fix this glaring oversight.

Kliman demonstrates irrefutably that these claims are false. He shows that, for each and every 'exposé' and each and every subsequent 'solution' proposed, the same errors are at the basis of the reasoning. All of the arguments about the transformation problem rest on either dualism between price and value, which Marx nowhere supports, or physicalism (which means that profit exists as physical surplus), which is false, or simultaneism (which means that input prices and output prices have to be equal during the same production period), which is also false, or usually a combination of these things. Even well-respected Marxist economists, such as Laibman and Moseley, have fallen into this trap, and this goes for non-Marxists who have written about Marxist economics equally (Robinson and Samuelson for example).

By destroying the basis of the physicalist, dualist, simultaneist critique of Marx, and substituting for it the temporal single system interpretation (TSSI) of Marx, which allows everything Marx says in "Capital" to make sense and to be internally valid and consistent, Kliman demonstrates that the "transformation problem" has been a problem on the part of some readers, not Marx, all along, and that the reports of the death of the Marxist theory of value have been greatly exaggerated.

All of this is done wonderfully and with iron logic. The one downside of this book, as with every book by Kliman and/or Freeman, is the pointless invective aimed at their opponents and the almost paranoid tone in which the lack of positive reception on the part of Kliman et al. is discussed. Even respected Marxist colleagues, who probably agree politically and scientifically with Kliman on 99.9% of all issues, are constantly portrayed as ignorant at best and malevolent and intellectually dishonest at worst, without any proof for this at all. Kliman and the other TSSI people would probably do better to be more respectful in their refutations of their opponents, because in that way they make it a lot easier for these opponents to change their stance without feeling humiliated about it. This would be beneficial for Marxism and all of economics as a whole, since the TSSI interpretation is most certainly correct.

As I wrote in my review of Kliman's other book (The Failure of Capitalist Production, which also deserves 5 stars), Kliman first came to my attention as someone who had addressed two long-term historical issues within Marxists economics. Most Marxists accept a lot of Marx's theories of capitalism, as outlined in Capital Vol I-III, but even the adherents recognized two potential fatal flaws in Marx's system. In no particular order, one is the transformation problem (TP), that is, the problem of explaining the transformation relationship between prices and value. Apparently Marx failed at this in Chapter 9 of Capital Vol III, which renders most of his system internally inconsistent. The second is the Law of the Tendential Rate of Profit to Fall (LTRPF). Marx claimed that surplus value derives from exploiting productive workers, and that particular firms tend to increase productivity and cut costs by laying off labor and replacing them with machines. At first this is advantageous for the capitalists, because his product is still valued at the socially necessary labor time required to make it, albeit for him there is far less labor costs than his competitors. Once all areas of an industry adopt the first industries cost cutting measures, and labor is severely reduced, then the source of surplus value is axed, and profit must fall. There are several measures by which capitalists tend to offset this trend though. Nonetheless, a Japanese Economist named Okishio showed that Marx's LTRPF was false. He showed that it was possible to lay off labor and raise profit.

Kliman's book serves to rescue Marx from both of these potentially devastating challenges to his theory. A friend of mine informed me that Kliman's title is too polemical, and suggested the following: "Concerning an Alleged Inconsistency in Marx's Capital." This is a good title too, but if Kliman is right about the degree to which the answer to these supposed problems has been suppressed and/or ignored, then the polemical title is justified too.

Kliman's primary thesis is that, like any author, Marx can be interpreted in many ways. Any passage, chapter, or entire book, can radiate different meanings to different readers. This is a problem that philosophers have finally begun to recognize and have started adopting hermeneutical theories of how best to read a text. Kliman, invoking the principle of charity, suggest that if an interpretation exist that renders a text INTERNALLY consistent (coherent), without resorting to subterfuge or blatant quote machinations, then that interpretation ought to be preferred to one that renders a text internally inconsistent (incoherent). In philosophy this principle is commonplace, perhaps in economics and other fields of academia, it is not. But if one is a Marxist and wants to give Marx the best possible reading, then the principle of charity is mandatory....(of course it should be mandatory even if you aren't a Marxist and despise Marx)

A little over a hundred years ago, a few economist, specifically von Borkiewicz, made the claim that Marx's theory was internally inconsistent. Sweezy adopted Borkiewicz's criticism, and hence forth Marx's Capital has needed serious amendments, and editing. By the 70's scholars started to refer to Marx's inconsistency in footnotes, and nonchalantly, without ever citing the initial sources and reasons for these claims. There's a good chapter on the history of this issue in Kliman's book, and historical references are made throughout the book. Kliman really seems to have studied the history of this debate in detail.

In dealing with these alleged claims of inconsistency, Kliman points to several economic models that deal with pricing of inputs and outputs in the production process, that lead to Marx's inconsistency; especially in relation to TP and LTRPF. The major problem with these theories is that they presume that Marx wanted input costs and output costs to be the same (simultaneous). But if one reads Marx as pricing inputs and outputs temporally, these economic models come out consistent and coherent. And this reading is not some abstruse reading, requiring genuflecting, and ambiguous quote mining; instead Kliman demonstrates that this reading is entirely consistent from Marx's 1861-63 notebooks, all the way through all three volumes of Capital. If one adopts the principle of charity, then we have two ways of reading Marx, inconsistently, or consistently, over the same quotes. And if one is true to the principle of charity, one must choose consistency.

The other issue, which goes a bit over my head, deals with Marx's price-value system. One can view price-value as distinct, parts of a dual system, or parts of a single-system. All readings are possible. Again, adopting the principle of charity, the single-system makes applying Marx's economic theories consistent.

Once temporal pricing and a single system are adopted (TSSI: Temporal Single System Interpretation), the issues raised by Okishio and those who see a transformation problem, are no longer issues. Marx's solutions are consistent and coherent. Kliman demonstrates theses points over and over again, employing rigorous logic and economic models, where he algebraically works out the issues at hand, showing mathematically, and logically, Marx is consistent.

Of course, someone reading this might have a suspicion that Kliman might be doing some Stalinist revisionism and whitewashing history to justify everything Marx every said. But Kliman is clear from the introduction onward that making Marx internally consistent does not mean that his system as a whole is actually applicable to the real world, and therefore true. Marx's theories can be made VALID (consistent), but proving that his system is SOUND (that his theory is actually true) is not the goal of this book. Kliman's main goal is to ensure that from here forward, economist stop referring to Marx as internally inconsistent, and suffering from problems he does not suffer from. Even bourgeois economist can do this, without thinking Marx's argument are sound, only valid; especially if they adopt the principle of charity.

Kliman's other book actually applies Marx's theories to the recent crisis, and makes them seem ostensibly sound, but again, that's not the point of THIS book.

I would not recommend this book to anyone who has never read Marx. It is not an introduction to his theories. This book is intended for those who have heard of Marx's inconsistencies, and are capable of grappling with Kliman's refutations (i.e., people with some economic background, or at least some level of understanding of Marx's texts).

Having twice given Kliman 5 stars, I look forward to his third book - whatever that may be. His logic is always brutally clear and consistent, and his style of argument leads little to no room for doubt. One does not have to be a Marxist or Marxists economist, to hence forth KNOW that a coherent reading of Marx exists, and ought to be espoused if one wants to retain some level of academic integrity.