Mikhail Tugan-Baranovsky was a Russian and Ukrainian economist, historian, and a representative of "legal Marxism" (disagreed with the labor theory of value, criticized Marxist revolutionary orientation).
Background
Ethnicity:
His father's genealogical line descends from the Lipka Tatar settlers in 14th-century Lithuania (full name - Tugan-Mirze-Baranovsky), his mother was an ethnic Ukrainian from the Poltava region.
Tugan-Baranovsky was born on 20 January 1865 in village of Solonom, Russian Empire in a noble family.
Education
After graduating from the classical school (Kharkiv gimnasium №2), he entered the Physics and Mathematics Departments of Kharkiv University. In 1889 he passed the exam for the course of the legal, physical and mathematical departments and was awarded Candidate. In 1894 he received a Master of Political Economy from Moscow University for the work " The Industrial crises in contemporary England, their reasons and influence on public life ". That was the first detailed empirical description of trade cycles - together with concern for their social consequences - alongside a theoretical explanation combining maldistribution of income, disproportion between industrial branches, and a mechanistic steam engine analogy using free loanable capital as the motor force. This approach influenced such Western macroeconomic theorists as John Maynard Keynes, Dennis Robertson, and Michal Kalecki.
Career
In 1895 he became a member of the Free Economical Association, of which he became the chairman in 1896. Since 1895 Tugan-Baranovsky was privat-dotsent (unremunerated lecturer) in Political Economics at Saint-Petersburg University, from where he was fired in 1899 for liberal views. During that time for his work "The Russian Factory in Past and Present appeared" in 1898 he received a
doctorate from Moscow University. This was a major contribution to economic history. In vivid and well-written pages, Tugan-Baranovsky showed the great importance of the state and of serfdom, and the subsequent growth of market-orientated industries based on free labor (though some workers were serfs on quit-rent, a few of whom became serf millionaires). He also made stimulating observations concerning "natural" and "artificial" industrialization, relevant to today's concerns with economic development.
He is also the author of another numerous works concerning the value theory, the distribution of a social revenue, history of managerial development, and fundamentals of cooperative managerial activities. His major contribution to economic theory was Foundations of political economy (1917), which went through many editions, and represented an attempt at a synthesis between Marxist political economy (the labour theory of value) and subjective value theory. He considered that the marginalists ignored ‘the objective conditions of production’, while Marxists failed to recognize that not only objective factors but also subjective valuations were an integral part of a theory of value. He argued that Marx confused value (Wert) with cost (Kosten). He basically supported Marx's
theory of exploitation, but defined ‘surplus value’ as equal to the value of the products acquired (consumed) by the capitalists, which earned him criticism from Kondratiev and Struve. He retained from his early Marxism the belief that economists should regard man as not just another factor of production. If horses could write economics, there would be a horse theory of value.
His research directions:
1) criticism of capitalism;
2) the theory of socialism:
In 1916 he published his work "The social basis of cooperation", and in 1918 -"Socialism as a positive teaching", where the scientist describes his views on socialism. Tugan-Baranovsky considered the transition to socialism inevitable because under capitalism small group of people making money at the expense of the rest of a large part of society. The basis of socialism is the idea of the equivalence of the human persons (the idea was borrowed from Kant). Tugan-Baranovsky identified three types of socialism:
a) State (государственный) - a system under which the state is the unit of management;
b) Trade union (синдикальный) - a system under which a large part of the state is combined with the autonomy of production units;
c) Communal (коммунальный) -
- a system under which the state's role is insignificant.
3) the theory of optimal pricing ( a synthesis of the theory of marginal utility, and
the labor theory of value): A Theorem Tugan-Baranovsky: «Marginal utilities of freely reproduced economic benefits are proportional to their labor value».
4) theories of income distribution;
5) investment cycle theory:
Tugan-Baranovsky formulated the law of the investment cycle theory – «phases of the industrial cycle are defined by investment process». The main cyclical factor in his opinion was disproportion in the allocation of capital, that was increased due to the limited bank resources, mismatches between savings and investment.
6) the theory of cooperation:
He developed the basic principles of cooperation: the financial interest, voluntary, only the employment of the cooperative members.
Mikhail Tugan-Baranovsky was one of the founders of the National Academy of Science of Ukraine, as well as the Secretary of Finance of the Ukrainian Peoples Republic. He died in 1919, on his way to Odessa to board a ship for France. He must be seen as the most original of the Russian economists of his generation. Alas, in the Soviet Union he was known chiefly as a ‘legal-marxist’ opponent of Lenin, and few had the opportunity to study his works, though The Russian Factory was reprinted.
He was fired from Saint-Petersburg University in 1899 for liberal views. Repeatedly suspended from teaching.
Dean of the Faculty of Law of Ukrainian State University ( Kiev), chairman of the Ukrainian cooperatives, president of the Ukrainian economic association (1896). Moreover, he is one of the founders of the National Academy of Science in Ukraine and a chief editor of Vestnik Kooperatsii (Cooperative Digest) (1909).
Tugan-Baranovsky was nominated to the State Duma, but was not elected. He is known as a prominent figure of the Ukrainian national movement.
Politics
The Kadets were mainly supported by professionals—university professors and lawyers were particularly prominent within the party, members of the zemstvo (a form of local government) and some industrialists. In 1917 the party was suppressed by the new regime.
Ukrainian Party of Socialists-Federalists was named like that since 1917 till 1923.
Views
Quotations:
"...as the supreme end in itself, a person can never be turned into a means for other purposes".