Volume one is the only volume completed by Marx. Engels completed volumes two and three from Marx's notes after Marx's death. Volume one seems to be the most significant.

Capital seems to be one of the most misunderstood books around. The book is a critical analysis of the flaws of capitalism. There's nothing in this or the other volumes about how a communist society would actually work, or centralized state planning. Lots of people seem to think those are what Capital is all about, but it doesn't mention them.

This volume starts off with long, detailed and somewhat repetitive explanations of Marx's economic theory, which is all based on what we now call his "labour theory of value". He then applies this theory to actual problems of capitalism in his own day, with a lot of horrific detail on exactly how exploitative nineteenth century capitalism was. Finally he applies the theory to history, showing how modern capitalism emerged from the eras of feudalism and primitive accumulation.

The big problem is the labour theory of value, which has been abandoned by pretty much all non-Marxist economists, and some self-identified Marxist economists too.

Most mainstream modern economists use Alfred Marshall's Marginalist theory of value. As an example, imagine an apple farmer and chicken farmer. The apple farmer is bored with eating apples and wants more protein in his diet. The chicken farmer is bored with eating chicken and wants more fibre in his diet. So they trade a bag of apples for a chicken. The chicken farmer values an extra (marginal) bag of apples more than an extra (marginal) chicken. The apple farmer values an extra (marginal) chicken more than he does yet another bag of apples. So, the trade has made them both better off in terms of what they each value at the margin. Marginalist value is not universal: different people can attach different values for the same thing.

Marx uses a Labour theory of value. In this the chicken has an objective value: the labour taken to raise and fatten it. The bag of apples has an objective value, the labour taken to plant, prune and harvest it. When they trade, there is no creation of value, either one of them wins and gets more value than the other, or the trade is perfectly fair and neither of them is better off. In an efficient market, the "exchange value" of each good at the market is the same as the labour value.

Marx is less convincing about this than I expected. He makes occasional references to a different kind of value "use value", which is more like the Marginalist idea. Marx would acknowledge that the apple farmer getting a marginal chicken increases his personal "use value". However he basically dismisses "use value" as a kind of illusion and concentrates on "exchange value" instead. To a modern reader familiar with marginalist value, it looks like he's brushing under the carpet one of the most important things in economics.

Because he doesn't believe in trade increasing value, lots of economic transactions become exploitative in his theory. With the labour theory of value, a capitalist employing a worker must be exploiting him, extracting undeserved "surplus value" from the worker.

Without the labour theory of value, it's not that exploitation necessarily vanishes. (Unless you assume a perfectly efficient market and all economic actions to be individual and voluntary). Some modern Marxists like John Roemer have derived Marx-like conclusions using modern economic models. But the inevitability of exploitation vanishes. With a marginalist theory of value, the possibility emerges of a more benevolent capitalism, in which the capitalist and the worker have a mutually beneficial relationship. The capitalist's expensive plant benefits the worker who can produce more than he would alone, as well as the capitalist benefiting from more labour he could do alone. Moreover, the worker as consumer benefits from cheaper goods and services provided by other worker-capitalist alliances.

This kind of capitalism is not inevitable either. With a marginalist theory of value, it's still possible that workers could end up exploited and facing ever-shrinking wages and ever-longer hours. But it's also possible that they can have a decent, steady or improving standard of living. It depends on how much competition there is, how effective the workers are at negotiating wages, and what the regulatory environment is like.

Another thing that seems strange is that Marx almost completely ignores the consumer side. If a capitalist under competitive pressures squeezes the price of his goods lower, either by exploiting his workers or by technological change, the consumer benefits by those lower prices. If the worker in the factory is also a consumer, he might conceivably benefit more from his lower prices, than he is harmed by his lower wages. But Marx doesn't really address discuss consumers here, which again seems a strange and conspicuous omission to a modern reader.

Marx doesn't seem to be particularly in favour of women in the workplace. He complains about "the excessive addition of women and children to the ranks of the workers", talks about "moral degradation" and quotes a source on how women farm workers are "tainted with a customary immorality"

Another thing I found surprising was that Marx never mentions a "final crisis of capitalism". This volume talks about a series of recurring crises of capitalism, survivable because of the "reserve army of labour", the body of long-term unemployed that Capital can call upon in booms and discharge workers to in crises.

The third volume of Capital, completed by Engels from Marx's notes after Marx's death, does talk about a tendency for the rate of profit to fall, though this can be offset by a list of "countervailing factors". The idea that there is an inevitable final crisis of Capitalism seems to come from later Marxists, who interpret this third volume of Capital in such a way that the tendency of the rate of profit to fall will inevitably override the "countervailing factors". Other Marxists disagree, saying the "countervailing factors" can keep acting indefinitely. Some Marxists claim Marx dabbled with the idea of a final crisis of capitalism in his early notes, but rejected it on further thought. (Marxists debate)

As a reading experience, Capital is pretty heavy going, with a lot of theory and some grinding repetition. The first few chapters of theory are particularly bad, but it gets more interesting when he gets into reporting the actual horrors of capitalism.

Marx's habit of insulting people he disagrees with seems a bit distasteful too, especially when they seem to be right. The tone reminded me a bit of Ayn Rand, though the influence must go the other way. The overall method: create a dubious but intuitive statement, repeat it dozens of times, insult everyone who thinks differently, then act like it's proven, seems similar.

This book has dated in more or less the opposite way to Burke's "Reflections". Burke's underlying principles, like gradual incremental change being better than revolution, have held up well. Burke's specific examples, like the defence of monarchical power, the hereditary peerage and restricted voting, seem pretty ludicrous today. Marx's specific examples seem relevant today: the capitalist urges to lengthen the working day, create worker insecurity through constant change, exploit workers and damage health. However his underlying principles: like the labour theory of value, aren't really plausible today.

Overall, I'm glad that I've read it. But as economics, it really seems fundamentally flawed by modern standards. The problems with the labour theory of value alone make it essentially worthless as a means of deriving any conclusions. But quite aside from that, the lack of discussion of consumers would make it highly questionable. The most useful part of the book are the accounts of how brutal capitalist exploitation was in the nineteenth century.

Theatre
Saw The World of Extreme Happiness at the National Theatre's Shed. Play set in modern China, about a girl from a farm who goes to the big city determined to make a success of herself.

Very good play. Powerful but with very funny moments. Excellent performances all round, especially Katie Leung as the star, but also Chris Lew Kum Hoi as her dim but enthusiastic brother and Junix Inocian (I think) as the cynical senior janitor. Good set design too, with realistic dirt and flashing neon standing in for Shenzhen.

I did think the ending was a little over the top, would have liked to see something smaller scale than the big speech. Also a bit frustrating that you don't get to know anything about whether the speech had any real impact on the company or the world, given that the brother is presumably lying about the great revolution.

Overall though, excellent play, well worth seeing.

Review, review, review.

What I'm Watching
Haven't had time to diarize on TV much, so here's a quick roundup.

Last ever episode of The I.T. Crowd. Liked it, didn't try to go too far over the top like some final specials: felt like a normal episode but wrapped things up a bit at the end.

Agents of SHIELD. Only watched the first episode so far. Seemed slick enough but a bit underwhelming, was a bit full of CSI-like cliches. Most pilots are pretty terrible as they're all about introducing the characters though, so might give it another shot. Was surprised by how much reference there was to the Marvel movies, might be a bit baffling if you haven't seen any.

Harlots, Housewives and Heroines was a three-part documentary series on women in the Restoration period. Had a few slightly cringey populist gimmicks like giggling references to sex, but underneath it was some pretty solid information on a fairly specialized period. Basically Lucy Worsley argues that the Restoration was a kind of Weimar-ish interregnum which allowed women more freedom, and society more licentiousness, as people were released from the Puritanism of the Commonwealth period. She does acknowledge that the Commonwealth did allow women more freedom in business though. If everyone is either a Cavalier or a Roundhead I'm definitely signing out an iron helmet, but even so thought it was an interesting series.

King Alfred and the Anglo-Saxons: another solid three-parter on the Anglo-Saxon kings of England. Particularly good on the powerful ruler of Mercia Queen Aethelflaed, and how Aethelstan essentially unified England for the first time. Informative, but again I feel like there's a worrying jingoism somehow getting into popular history. The Danes are always called "Vikings", and it's implied that they were invaders, though by this point they'd been settled for generations, and the Anglo-Saxons were themselves Germanic invaders. Conflicts between the Danes and the Anglo-Saxons are a bit like conflicts between English and Spanish settlers in America: more a case of invaders fighting each other than invader-versus-native. Also some of these wars were because of Aethelred's incompetent attempts at genocide: the Anglo-Saxons weren't exactly peacelovers either.

Ancient Greece: The Greatest Show on Earth was an OK 3-parter on Greek drama. Quite informative, goes beyond the familiar Athenian drama into Hellenistic drama in part 2 and Romanized drama in part 3. Not that convinced by attempts to link drama and democracy though. We tend to bundle up the Democracy and Philosophy and Art and Drama as they were all happening at the same time, but a lot of the time they were pretty hostile, with philosophers and dramatists opposed to each other, and a lot of hostilty to democracy.

Caligula with Mary Beard was a single show, partly rehabilitating the notorious dictator, pointing out that a lot of his misdeeds were exaggerated. He never made his horse a Consul, and Beard thinks he probably just said something like "This consul's so useless my horse would make a better job of it", which was exaggerated by his enemies into an actual plan. Also had an interesting digression into the priest of Nemi, who could be replaced by anyone who managed to kill him, providing an escape route for escaped slaves. Seems to be an interesting rare real example of a popular fictional trope. She makes this into an analogy for the emperors, who were killed and replaced in a a similar way in this period. Still, Caligula probably wasn't exactly a nice chap.

The Other Pompeii: Life and Death in Herculaneum was another single show. Herculaneum was a small town near Pompeii, buried more thoroughly and with more intact artefacts and buildings. Interesting show despite having been there. There's very little information on what Roman life was like for everyday people in a small town, rather than Senators in Rome. There seems to have been a lot more social mobility than I expected, with freed slaves living in nice houses next to their former owners. I think the patron-client system might have moderated Roman slavery somewhat. A freed slave would customarily have become your client: doing small tasks for you, supporting you politically, being part of your entourage on ceremonial occasions. Pragmatically, a freed slave might have been more valuable to you as a client. Also I suspect the high death rate and terrible hygeine might have contributed to social mobility: always plenty of dead mens shoes to fill.

Web
Socioeconomics. Osborne has now been proved wrong on austerity (FT, free reg required).

Politics. EDL leader stalks wrong person.

Sci/Tech. Is depression linked to ability to fight infection? Neuroskeptic on Channel 4's "Porn on the Brain". Research fraud in China.

Random. New "Hyperbole and a Half": Dinosaur Power. Lake turns animals into statues. Bible memorization system.

Video. Blind Film Critic has questions for sighted people (wish he'd do some more reviews). Wingsuit panoramic camera lets you control the view.

Pics. A few illustrations from a 17th century edition of Tacitus.