CHAPTER TWO - The Methodology of Aggregates: Keynes vs. Marx

Summary

The methodology, characteristic of Karl Marx, of distinguishing between the real aspect and the value aspect, and at the same time integrating the two aspects, is best illustrated in his reproduction scheme about which I briefly referred to in the previous chapter. The significance of this methodology as exemplifying the institutional commitment of Marx can probably be grasped better by contrasting Keynes’ and Marx's treatment of economic aggregates.

Modern society, in its economic aspect, presents itself as an interrelation of a tremendously large number of economic units. One kind of theoretical consolidation of these units or another has been practised since the birth of economics as a scientific discipline. Doctrinal survey would reveal how, since Quesnay's time, such consolidation of economic units has undergone a historical evolution.

Products of consolidation usually pertain to society as a whole and are called, in recent economic literature, simply ‘aggregates’. The set of aggregates most widely used in modern economic discussion is, of course, the one associated with the economics of John Maynard Keynes. Let us refer to them as ‘Keynesian aggregates’.

It is often said that the problem of aggregates is purely definitional and that one set of aggregates, if defined in terms of objective facts, can always be translated into another set. Though this latter proposition is frequently valid, it is hardly true that the problem of aggregates is purely definitional. Consolidation is a way of organizing manifold data; it is the anatomy of the economic organism.