Neoclassical economics is more universalizing than Marxism - we don’t treat capitalism as static, but rather as a social relation with changing dynamics worth analyzing

However, as capital is a social relation, one cannot simply accept the examples given by Marx or Smith as rigid, eternal truths if the intention is to contemplate productive and unproductive labour in the contemporary capitalist mode of production. In another sense, Smith also places great emphasis on accumulation. “Parsimony, and not industry, is the immediate cause of the increase of capital”; thus, industry without accumulation has no potential for producing capital (Smith, 2012, p. 332). However, Smith conflates the meaning of capital with profit and is consequently unable to differentiate between capital, surplus-value, and profit. “It thus directly grasps surplus-value in the form of profit. Hence, the difficulties that are about to arise” (Marx, 1965, p. 61). Despite this not irrelevant mistake, Smith underlines that a person must employ his capital, which “puts into motion an additional quantity of industry” (Smith, 2012, p. 332), in this sense correctly representing an essential feature of capital, namely, its need to be in constant motion. However, as capital represents a particular form of surplus labour accumulation, one must differentiate between its idiosyncrasies and other modes of production. While surplus labour characterises the social-labour that exceeds the immediate need for social production and reproduction—denoting surplus-use-value—, labour subsumption under capitalism subordinates all forms of value to surplus-value (surplus-exchange-value). From the labourer’s perspective, surplus labour loses both its social and individual dimensions; appropriated by the capitalist, it appears as surplus-value. The neoclassic economics (the so-called marginal revolution) disregarded the notion of value, in which social relations are considered in totality, and instead presented models based on subjective apprehension of reality, namely, so-called marginal utility (Jevons, 2013; Menger, 2004; Walras, 1954). Its house of cards is based on endless assumptions, which presuppose leaving the most essential things, such as time, out of the model. Other unreal abstractions, such as perfect information, perfect competition, Pareto optimum, (stable) equilibrium of supply and demand, etc., are central in this made-up-economy. Its basis was contested by thinkers such as Ernest Mandel and Maurice Dobb. Piero Sraffa also reintroduced the issue of value in neo-Ricardian terms, deriving it from production instead of neoclassical (marginalist) theoretical assumptions. Building on Sraffa’s critique, Samir Amin leaves no room for disputes: “The subjective theory of value has been shown to rest on a tautology—it does not even meet the criteria of formal logic” (Amin, 1977, p. 117; Sraffa, 1960).Following Sraffa, Dobb demonstrates that prices are the result of “widely different proportions of labour and other inputs at different ‘layers’ in the vertical production-process” and not “independent” of social production relations, thus neoclassic expedient, abstractly regarding them as and in singular units emergent from timeless subjective perception of utility, must be considered “fallacious” (Dobb, 1973, pp. 254, 257, 243f). Mandel attacks it even further. It was political economy’s failure to tackle the question of value posed by critics of capitalism, such as Marx, exposing political economy’s intelligentsia to join the rows of socialist struggles, which made it necessary “to neutralise the ‘socialist danger’”, that is, “the entire structure based on the labour theory of value had to be demolished” (Mandel, 1968, p. 713). To achieve this, arguments concerning historical-ontological social relations exposing capitalists could not be confronted on their own merits. A whole new methodological set had to be founded ex nihilo. “The system is coherent, but it is divorced from reality, which it fails either to grasp statistically or a fortiori, to explain in its laws of development” (Mandel, 1968, p. 713). Therefore, marginalism abandoned not only the critique of political economy but political economy itself.