of making predictions, and in setting up criteria for the meaningfulness of terms. It is then possible to examine the basic theoretical variable of Marx's political economy -- value. We examine its credentials, so to speak, in Chapter II. Insofar as it depends on the dialectical materialism rather than empirical evidence we can safely dismiss it. But we must carefully consider the possibility that there are scientific grounds for the labor theory of value.

The possibility remains that Marx's exploitation theory based on the labor theory of value might still be acceptable and might be justified on grounds logically independent of dialectical materialism. Marx thought that this was the case and that he had shown how exploitation occurred under capitalism. I seek to prove that unless Marx makes unwarranted and unduly restrictive assumptions, he cannot hold to a materialistic labor value. He must inevitably be pushed in the direction of multiple factor, subjective cost theories. In the end Marx must rely on subjective demand schedules in order to explain the facts of exchange of commodities. Since the labor theory of value cannot be independently established, Marx cannot use labor value as a verification of his system of dialectical deductions.

In Chapter III we examine Marx's application of the value theory to the wage bargain. We see that he becomes further committed to subjective considerations. Further, his conclusions are shown to be in contradiction with the facts of continued existence of profit and the apparent decreasing misery of the proletariat. Marx interprets this as a contradiction within capitalism itself rather than in his system and goes on to develop a theory of progressively worsening business cycles. We must follow him here and demonstrate how this theory depends on his metaphysical value theory. Particularly in this field there are valuable hints taken up by later economists; but the prediction of the economic breakup of capitalism in a violent depression or secular stagnation or both is not substantiated.

In the final chapter we examine post-Marxist economics. One

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