Marx, Kantorovich, and Novozhilov: What Is Wrong With Stoimost’?

The program adopted at the 22nd Party Congress in October 1961 stated that prices must reflect socially necessary labor costs. Soviet economics held that it is these costs that form value. Meanwhile, Robert Campbell published an article under the title “Marx, Kantorovich, Novozhilov: Stoimost’ Versus Reality” supporting the view that Kantorovich and Novozhilov had revived Soviet economics. However, they had to reject the Marxist theory of value. In the opinion of many Soviet scholars, these economists withdrew from Marxism, which was not a positive contribution to economics. This article analyzes problems concerned with the content of the theory of value, whether it was adequately understood by Soviet economists and whether Kantorovich’s and Novozhilov’s approaches were compatible with Marxism. In fact, they developed interesting concepts of objectively determined valuations and differential costs. These indicators were to be used in the process of setting prices. Both Kantorovich and Novozhilov sincerely believed that their approaches were in line with Marxism. In his works, Novozhilov criticized Campbell’s article. This article attempts to prove that Marx did not complete the theory of value and, in fact, came to a dead end. With this in view, it would be incorrect to blame scholars for withdrawing from such an incomplete theory. The article studies the questions of correlation between Kantorovich’s and Novozhilov’s approaches and of their mutual estimation of each other’s thinking. In addition, the article demonstrates differences and similarities in the concepts of these outstanding economists. Although in correspondence with Canadian historian Vsevolod Holubnychy, Novozhilov tried to prove that his theory of differential costs was developed independently of Kantorovich’s works, this statement seems to be incorrect. The article also marks the influence of Kantorovich’s and Novozhilov’s ideas on the development of the concept of economic reform. The Appendix includes fragments from correspondence between Novozhilov and Holubnychy and excerpts from Campbell’s letter addressed to the author of this article. These excerpts contain quite a just rejoinder to critical remarks by Novozhilov concerning Campbell’s article.

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