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Karl Marx and the Close of His System; A Criticism
This historic book may have numerous typos and missing text. Purchasers can download a free scanned copy of the original book (without typos) from the publisher. Not indexed. Not illustrated. 1898 Excerpt: ... CHAPTER IV THE ERROR IN THE MARXIAN SYSTEMITS ORIGIN AND RAMIFICATIONS HE evidence that an author has contra dieted himself may be a necessary stage, but it cannot be the ultimate aim of a fruitful and well directed criticism. To be aware that there is a defect in a system, which may possibly be accidental only and peculiar to the author, requires a comparatively low degree of critical intelligence. A firmly rooted system can only be effectually overthrown by discovering with absolute precision the point at which the error made its way into the system and the manner in which it spread and branched itself out. As opponents we ought to study the beginning, the development, and the final issue of the error which culminates in self-contra Section I diction as thoroughly, I might almost say as sympathetically, as we would study the connection of a system with which we were in agreement. Owing to many peculiar circumstances the question of self-contradiction has, in the case of Marx, gained a more than ordinary importance, and consequently I have devoted a considerable space to it. But in dealing with a thinker so important and influential as Marx it is incumbent upon us to apply ourselves to the second and, in this case as I think, the actually more fruitful and instructive part of the criticism. We will begin with a question which will carry us straight to the main point: In what way did Marx arrive at the fundamental proposition of his teaching--the proposition that all value depends solely upon incorporated quantities of labour? "That this proposition is not a self-evident axiom, needing no proof, is beyond doubt. Value and effort, as I have stated at length in another place, are not ideas so intimately connected that one is forced immediately to adopt the ...
42 pages, Paperback
First published January 1, 1896
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About the author
Eugen von Böhm-Bawerk
98 books77 followersAustrian economist who made important contributions to the development of the Austrian School of Economics. He served intermittently as the Austrian Minister of Finance between 1895 and 1904. He also wrote a series of extensive critiques of Marxism.
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Displaying 1 - 11 of 11 reviews
September 8, 2016
just revisiting Bohm Bawerk's chapter on the fundamental error in the Marxian system: his theory of value and its support.
Bohm Bawerk just explodes it and it's such a pleasure to read. One can't help but laugh once Marx's dialetical prestidigitations are exposed...
Bohm Bawerk just explodes it and it's such a pleasure to read. One can't help but laugh once Marx's dialetical prestidigitations are exposed...
December 4, 2020
This book was first recommended to me over 2 years ago now, and I am very pleased to have finally read it. The copy I read contained the books by both Böhm-Bawerk & Hilferding, with an appendix article on the translation of values into prices of production.
Böhm-Bawerk does present what at first I found to be a pretty compelling critique of Marx’s economic works, providing the first articulation of the so called “Transformation Problem”. Hilferding’s response however is a thorough and merciless refutation of Böhm-Bawerk’s arguments, and I would be tempted to say should serve as required reading for anyone wanting to defend Marx’s work against economic criticism.
The appendix was an intriguing article but I do not think it added much to the overall book, with the exception of the last few paragraphs which touch, ever so slightly, on crisis theory.
All in all this is an excellent book and one I thoroughly recommend, both for the Marxist and the unconvinced.
Böhm-Bawerk does present what at first I found to be a pretty compelling critique of Marx’s economic works, providing the first articulation of the so called “Transformation Problem”. Hilferding’s response however is a thorough and merciless refutation of Böhm-Bawerk’s arguments, and I would be tempted to say should serve as required reading for anyone wanting to defend Marx’s work against economic criticism.
The appendix was an intriguing article but I do not think it added much to the overall book, with the exception of the last few paragraphs which touch, ever so slightly, on crisis theory.
All in all this is an excellent book and one I thoroughly recommend, both for the Marxist and the unconvinced.
Read
July 31, 2011Truly a definitive refutation of Marxism by one of the founders of the Austrian School. Particularly devastating is Böhm-Bawerk's use of the Marxian dialectic to demonstrate that beneath all the mumbo-jumbo abut "thinking socially" and "socially processes" the Marxists have advanced an argument that it is no more scientific than it would be argue that the facts of economic life are determined by Tinkerbell and her magic fairy dust. An added bonus is Hilferding's Marxit rejoinder to Böhm-Bawerk, a complete failure that merely evades all of Böhm-Bawerk's arguements while missing completely his shredding of the Marxian dialectic.
I find it noteworthy that Austrians tend to write their books in simple and straightforward language easily accessible by any reasonably educated person while the Marxists are forced into writing tense tomes in which enormous effort is expended to show that Marx is inevitably correct irregardless of how manifestly his predictions fail to accord with the observed facts of everyday reality. Another great benefit of this work is that it can easily read in one sitting, at least if one avoids the tedious and far more labor-intensive effort of slogging through the Marxian response.
I find it noteworthy that Austrians tend to write their books in simple and straightforward language easily accessible by any reasonably educated person while the Marxists are forced into writing tense tomes in which enormous effort is expended to show that Marx is inevitably correct irregardless of how manifestly his predictions fail to accord with the observed facts of everyday reality. Another great benefit of this work is that it can easily read in one sitting, at least if one avoids the tedious and far more labor-intensive effort of slogging through the Marxian response.
February 9, 2019
Böhm-Bawerk's polemic is the definitive Austrian/neoclassical critique of Marxian economic theory, and thus is essential reading for everyone who wants to understand Marx. However, Hilferding's reply is equally stimulating, and in my estimation strongly knocks down most of Böhm-Bawerk's objections. This volume is especially pertinent for those who want to understand the transformation problem and the relation between production price in Volume III of Capital and value in volume I. Paul Sweezy's introduction is excellent in setting the stage for the debate, so don't skip it.
January 24, 2021
This is really worth reading if not mostly for Hilferding's retort (especially his last chapter) to Bohm-Bawerk's critique of the transformation problem (on the equivalence between surplus value and profit). The critique by BB would only be good if his interpretation of value as determined largely by individual demand and consumption, as opposed to Marx's interpretation of value as determined by society and production, was right - a critique cannot start with a completely different set of canonical assumptions and object of study and then proceed to find logical faults which are caused only by changing both assumptions and object of study. It did fool me initially, so it was a good thing I read the retort by Hilferding. A redeeming aspect of BB's critique is his nice initial chapter on simply explaining the LTV, even if from a more subjectivist perspective.
Hilferding's retort is quite good not so much by disproving a few different arguments forwarded by BB but because of the last chapter, "The Subjectivist Outlook", where he explains why BB and Marx arrive to such different conclusions - they have different core assumptions and objects of study. Only by understanding this can a critique of Marx then be possible. The appendix, a paper by von Bortkiewicz, is an example of - to me - a good critique to Marx as it does not need to distort any of the core assumptions and is merely a correction of the mathematical formulation that Marx offers in the third volume.
The introduction by Paul Sweezy is also phenomenal and I would highly recommend not skipping it - he makes a weird criticism of the appendix for having "weird maths" but I didn't think they were weird - at most they were a bit convoluted.
Hilferding's retort is quite good not so much by disproving a few different arguments forwarded by BB but because of the last chapter, "The Subjectivist Outlook", where he explains why BB and Marx arrive to such different conclusions - they have different core assumptions and objects of study. Only by understanding this can a critique of Marx then be possible. The appendix, a paper by von Bortkiewicz, is an example of - to me - a good critique to Marx as it does not need to distort any of the core assumptions and is merely a correction of the mathematical formulation that Marx offers in the third volume.
The introduction by Paul Sweezy is also phenomenal and I would highly recommend not skipping it - he makes a weird criticism of the appendix for having "weird maths" but I didn't think they were weird - at most they were a bit convoluted.
August 18, 2020
I was planning to put off reading critiques of Marx until I'd finished my first set of readings of Marx himself but got impatient and found this. I found Marx's Value, Price, and Profit to be full of strange lapses in its premises (the labor theory of value) and utterly unconvincing on its chief points (the extraction of surplus value). But as I mulled over how I might go about framing an argument as to why the LTV is wrong, I kept getting hung up on the fact that it really isn't an empirical claim in the first place. It's not like debunking the Ptomelaic solar system, where you can point to a mountain of clear, physically intuitive evidence that the earth orbits the sun. It's just this whole set of small things that click into place when you have a better theory. So I was curious to see how the earliest marginalists had framed their arguments.
And mostly I was pretty satisfied. It's interesting to peel away a century+ of culture war in economics. Bohm-Bawerk is very respectful of Marx as a thinker and always views his work as a good-faith attempt to explain the facts of economics. He never impugns his motives or his politics. There is no mention of "capitalism" or "communism" or outcomes for workers or anything like that. It's framed completely as an internal debate within economics as an explanatory science. And he always makes an effort to give the best exposition of Marx's ideas as relevant, at least based on the ones I knew from VPP. Sometimes that means quoting Marx, or one of his followers, and sometimes it means paraphrasing him. Regardless, B-B's expositions generally do a much better job of isolating the testable implications of Marx's ideas, where Marx himself (at least as of VPP) seems to have little interest in that, laying each idea as a brick in a larger theoretical construct advanced on dialectical terms.
While Bohm-Bawerk focuses on the empirical implications of Marx's theories, he doesn't undertake to debunk them using data or experiment. He does allude in a few places to previous, widely accepted work, which has shown that Marx's headline conclusions aren't straightforwardly correct. In fact, this is where the book gets its title--it is responding not to Marx's original argument in Volume 1 of Capital, but to his Volume 3 attempt to account for the failure of his Volume 1 predictions to match empirical observations. It is, in other words, a response to the most complete (or "closed") version of Marx's system, in which he's attempted to answer all the big questions brought up by previous critics and set out the best possible version of his theory.
And he makes pretty sharp, precise work of it. I can't say every single one of the arguments here was clear enough for me to follow--some of them because Marx's points still aren't clear, sometimes because B-B's rebuttal wasn't--but they are mostly very satisfying; surprisingly so for such an old book. Perhaps more remarkable is that most of the responses draw very little if at all on alternative theories. They mostly argue in the same kind of observation-informed hypotheticals and logical implication-followings Marx uses himself. B-B simply shows that for all his effort, Marx has failed to advance an internally viable framework based on the Labor Theory of Value. Marx doesn't convincingly argue why labor should be the source of all value, and if it were, the rest of his statements can't be made logically consistent with that and even the most basic, accessible facts of economics available at the time.
His explanations make the shortcomings of Marx's logic--the way he argues through exclusion but fails to mention obvious candidates, the way he argues through hypothetical but fails to consider obvious cases unfriendly to his conclusions, the way he analyzes the complex present in terms of idealized and essentially inaccessible pasts--seem both damning and obvious, peeling back the obfuscatory quality of Marx's own writing. Though he often notes his respect for Marx as a thinker in general, he never pulls punches on how poorly-argued he finds many of Marx's specific claims (he almost anticipates the modern psychological finding that smarter people are more vulnerable to being misled because they're better able to convince themselves of things they want to believe). By the end, he's pretty well demolished, at least in the aspects that relate to objective economics (there are, again, no mentions at all of Marx's broader ideas about social science or history or communism etc).
And mostly I was pretty satisfied. It's interesting to peel away a century+ of culture war in economics. Bohm-Bawerk is very respectful of Marx as a thinker and always views his work as a good-faith attempt to explain the facts of economics. He never impugns his motives or his politics. There is no mention of "capitalism" or "communism" or outcomes for workers or anything like that. It's framed completely as an internal debate within economics as an explanatory science. And he always makes an effort to give the best exposition of Marx's ideas as relevant, at least based on the ones I knew from VPP. Sometimes that means quoting Marx, or one of his followers, and sometimes it means paraphrasing him. Regardless, B-B's expositions generally do a much better job of isolating the testable implications of Marx's ideas, where Marx himself (at least as of VPP) seems to have little interest in that, laying each idea as a brick in a larger theoretical construct advanced on dialectical terms.
While Bohm-Bawerk focuses on the empirical implications of Marx's theories, he doesn't undertake to debunk them using data or experiment. He does allude in a few places to previous, widely accepted work, which has shown that Marx's headline conclusions aren't straightforwardly correct. In fact, this is where the book gets its title--it is responding not to Marx's original argument in Volume 1 of Capital, but to his Volume 3 attempt to account for the failure of his Volume 1 predictions to match empirical observations. It is, in other words, a response to the most complete (or "closed") version of Marx's system, in which he's attempted to answer all the big questions brought up by previous critics and set out the best possible version of his theory.
And he makes pretty sharp, precise work of it. I can't say every single one of the arguments here was clear enough for me to follow--some of them because Marx's points still aren't clear, sometimes because B-B's rebuttal wasn't--but they are mostly very satisfying; surprisingly so for such an old book. Perhaps more remarkable is that most of the responses draw very little if at all on alternative theories. They mostly argue in the same kind of observation-informed hypotheticals and logical implication-followings Marx uses himself. B-B simply shows that for all his effort, Marx has failed to advance an internally viable framework based on the Labor Theory of Value. Marx doesn't convincingly argue why labor should be the source of all value, and if it were, the rest of his statements can't be made logically consistent with that and even the most basic, accessible facts of economics available at the time.
His explanations make the shortcomings of Marx's logic--the way he argues through exclusion but fails to mention obvious candidates, the way he argues through hypothetical but fails to consider obvious cases unfriendly to his conclusions, the way he analyzes the complex present in terms of idealized and essentially inaccessible pasts--seem both damning and obvious, peeling back the obfuscatory quality of Marx's own writing. Though he often notes his respect for Marx as a thinker in general, he never pulls punches on how poorly-argued he finds many of Marx's specific claims (he almost anticipates the modern psychological finding that smarter people are more vulnerable to being misled because they're better able to convince themselves of things they want to believe). By the end, he's pretty well demolished, at least in the aspects that relate to objective economics (there are, again, no mentions at all of Marx's broader ideas about social science or history or communism etc).
October 29, 2017
Karl Marx and the close of his system
This review is of the edition that contains besides Eugene’s work 2 appendices by Hilferding and another guy .Each is reviewed separately. The official book rating is for Eugene's work.
Eugene:
Eugene demonstrates that Marx using seriously faulty logic and a illogical adherence to the labor value theory he arrives at a faulty system of socio-economical thought, today called Marxism. Eugene deals only with Marx’s errors in political economy, and the impression twords the end witch I had and Eugene also had is that Marx was developing his theory with a specific motive in his head and with a ready made conclusion. That is a scientific proof that would prove that entrepreneurs and capitalists are pure exploiters of the laborers.
The arguments are in the book. He proves that Marx’s system is riddled with contradictions and absurdities.
Hilferding (1 star ):
Hilferding dose not quite engage in a systematic demolishion of Eugene's thesis. He instead rejects the methodology of the psychological school (today called austrian economics ) and attempts to fit Marx's thesis into a pure objective methodology, one that has a starting point the hysterical materialistic view of history. He dose not prove why Eugene and us must consider hystorical materialism and pure objectivism as the only valid method, and since Eugene dose not attack marxism in it's entirety but only on political economy; Hilfrerding may struck a point with people who are uncertain or are adepts of objectivist methodology and marxism. But still so his arguments strikes me as a rejection of evidence. He dweals in theoretical and rejects data from experience.
Marxim in order to be destroyed must be disproved in it's entirety, not only political economy. The madd will to prove Marx is evident in them just as it is in the third author whose work plunges even deeper in meaningless mathematics and theoretical models with no connection to reality.
August 4, 2025
This book was one of the first to change my mind. From a marginalist standpoint, it brilliantly dismantles Marxism’s labor‐theory‐of‐value by rejecting the notion of “intrinsic” value. Without an objective measure of value, Marx’s entire theory of exploitation collapses into incoherence—and Böhm‐Bawerk shows that those supposed “surplus values” rest solely on outdated classical‐economist assumptions. In exposing these hidden fallacies, the critique reveals why a subjective, margin‐based approach to value decisively undermines Marx’s core arguments.
November 26, 2023
"Karl Marx and the Close of His System" is a critical examination of Marxian economics by Austrian economist Eugen von Böhm-Bawerk, first published in 1896. In this work, Böhm-Bawerk engages with the economic theories of Karl Marx, offering a systematic critique of the key concepts underpinning Marx's analysis.
Böhm-Bawerk begins by dissecting Marx's labor theory of value, a cornerstone of Marxist economics. He contends that the theory, which asserts that the value of a good is determined solely by the labor time necessary for its production, is flawed and inconsistent with the subjective theory of value. Böhm-Bawerk argues that the value of a good is not derived solely from the amount of labor invested but is also influenced by consumer preferences and market conditions.
A significant aspect of Böhm-Bawerk's critique is his exploration of the concept of exploitation as presented by Marx. He challenges the notion that profits result from the exploitation of labor, arguing that profits are a legitimate return on capital and entrepreneurship. Böhm-Bawerk asserts that the labor theory of value fails to explain the complexities of profit determination in a market economy.
Furthermore, Böhm-Bawerk examines Marx's theory of surplus value and the inevitability of the capitalist system's collapse. He argues that Marx's predictions of the imminent demise of capitalism are unfounded and explores the economic mechanisms that contribute to the stability and resilience of market economies.
The Austrian author exposes Marx's fundamental failure to understand the workings of the capital market and its relationship to value. The Marxist system runs in one direction, and facts go in another; Without private markets, there is no price calculation. The theory of value presented by Marx, embodied in the cost of labor production, is just another confusing premise with counter-producing results in real-life situations. One solution to measure value may seem valid on paper, however, in practice, it will eventually produce opposite results in its relationship to market value. The close of his system is a criticism of a fallacious dialectical that doesn't work in the real world.
In essence, the book is a comprehensive and systematic critique that challenges the foundational principles of Marxian economics. Böhm-Bawerk's work has been influential in shaping debates about the viability and coherence of Marxist economic theory. The book remains a significant contribution to the history of economic thought, providing a thorough examination of the weaknesses and inconsistencies in Marx's analytical framework.
"his system is not in close touch with facts. Marx has not deduced from facts the fundamental principles of his system, either by means of sound empiricism or a solid economic-psychological analysis, but he found it on no firmer ground than a formal dialectic. This is the great radical fault of the Marxist system at its birth."
Böhm-Bawerk begins by dissecting Marx's labor theory of value, a cornerstone of Marxist economics. He contends that the theory, which asserts that the value of a good is determined solely by the labor time necessary for its production, is flawed and inconsistent with the subjective theory of value. Böhm-Bawerk argues that the value of a good is not derived solely from the amount of labor invested but is also influenced by consumer preferences and market conditions.
A significant aspect of Böhm-Bawerk's critique is his exploration of the concept of exploitation as presented by Marx. He challenges the notion that profits result from the exploitation of labor, arguing that profits are a legitimate return on capital and entrepreneurship. Böhm-Bawerk asserts that the labor theory of value fails to explain the complexities of profit determination in a market economy.
Furthermore, Böhm-Bawerk examines Marx's theory of surplus value and the inevitability of the capitalist system's collapse. He argues that Marx's predictions of the imminent demise of capitalism are unfounded and explores the economic mechanisms that contribute to the stability and resilience of market economies.
The Austrian author exposes Marx's fundamental failure to understand the workings of the capital market and its relationship to value. The Marxist system runs in one direction, and facts go in another; Without private markets, there is no price calculation. The theory of value presented by Marx, embodied in the cost of labor production, is just another confusing premise with counter-producing results in real-life situations. One solution to measure value may seem valid on paper, however, in practice, it will eventually produce opposite results in its relationship to market value. The close of his system is a criticism of a fallacious dialectical that doesn't work in the real world.
In essence, the book is a comprehensive and systematic critique that challenges the foundational principles of Marxian economics. Böhm-Bawerk's work has been influential in shaping debates about the viability and coherence of Marxist economic theory. The book remains a significant contribution to the history of economic thought, providing a thorough examination of the weaknesses and inconsistencies in Marx's analytical framework.
"his system is not in close touch with facts. Marx has not deduced from facts the fundamental principles of his system, either by means of sound empiricism or a solid economic-psychological analysis, but he found it on no firmer ground than a formal dialectic. This is the great radical fault of the Marxist system at its birth."
September 21, 2018
Although a very niche book as a whole in the field of economics, it is an interesting read for those of us that are attracted to that specific corner of literature. The concepts of collectivism versus individualism are going to continue to be an intellectual battle between political, philosophical and economic thinkers for as long as these things exist.
This book zooms in very, very narrowly on that conflict and unless you are specifically interested in what this book brings to that intellectual battlefield it is very easy to jump over this book completely. But, if you do you will do yourself a disservice in my opinion. More on that later.
The main author, Eugen von Böhm-Bawerk, is one of the people responsible for the foundation of Austrian School of economics that his student Ludwig Von Mises spearheaded and developed in America. This is an important fact to look at when you consider what that school of economics do today and this book in particular highlights where the Austrians got their stance against socialism and state interference from. Not from Von Böhm-Bawerk solely, of course, but he was an important piece in the puzzle.
"Karl Marx and the Close of His System" is Von Böhm-Bawerks attempt to not only dismantle the arguments Karl Marx puts forth in his famous "The Capital", but also to point out where Karl Marx is opposing himself in his books. As an added bonus to the book, its editor Rudolf Hilferding has added a section of the book that tries to argue back on behalf of Karl Marx which makes this particular edition of the book a wholesome experience and real candy for us economy-nerds that want to watch (or read as it where in this case) intellectuals duke it out.
No matter your stance on the "socialism versus capitalism" debate, this book has something for both sides to enjoy, which is quite a unique experience. The language used is a little dated, but the message within is timeless.
If you would like to read more of my thoughts on the book and check out my favorite quotes from it, you can check it out on my blog here.
This book zooms in very, very narrowly on that conflict and unless you are specifically interested in what this book brings to that intellectual battlefield it is very easy to jump over this book completely. But, if you do you will do yourself a disservice in my opinion. More on that later.
The main author, Eugen von Böhm-Bawerk, is one of the people responsible for the foundation of Austrian School of economics that his student Ludwig Von Mises spearheaded and developed in America. This is an important fact to look at when you consider what that school of economics do today and this book in particular highlights where the Austrians got their stance against socialism and state interference from. Not from Von Böhm-Bawerk solely, of course, but he was an important piece in the puzzle.
"Karl Marx and the Close of His System" is Von Böhm-Bawerks attempt to not only dismantle the arguments Karl Marx puts forth in his famous "The Capital", but also to point out where Karl Marx is opposing himself in his books. As an added bonus to the book, its editor Rudolf Hilferding has added a section of the book that tries to argue back on behalf of Karl Marx which makes this particular edition of the book a wholesome experience and real candy for us economy-nerds that want to watch (or read as it where in this case) intellectuals duke it out.
No matter your stance on the "socialism versus capitalism" debate, this book has something for both sides to enjoy, which is quite a unique experience. The language used is a little dated, but the message within is timeless.
If you would like to read more of my thoughts on the book and check out my favorite quotes from it, you can check it out on my blog here.
June 13, 2021
I went over Bohm-Bawerk's work after more than 10 years and the only criticism I can make is that he wasted his time and precious mind for trying to refute the all-time stupidest economic idea of surplus value.
Displaying 1 - 11 of 11 reviews