Is the theory of a falling profit rate valid?

Cockshott, P. (2013) Is the theory of a falling profit rate valid? World Review of Political Economy, 4(3), pp. 323-340. (doi: 10.13169/worlrevipoliecon.4.3.0323)

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Marx's theory of the falling rate of profit makes two main appearances in his work. The first is in Chapter 25 of Capital Volume 1, entitled: The General Law of Capitalist Accumulation. It is further developed in Part III of Volume 3 of Capital, entitled The Law of the Tendency of the Rate of Profit to Fall. In this paper I will outline the structure of the theory presented in these two volumes of Capital. Following that I will look at some criticisms that have been levelled at it. I will go on to argue that the criticisms are based on a misunderstanding of some of the dynamic causal mechanisms that Marx assumed. Following on from this I shall present a dynamic solution to the equations of accumulation and show under what circumstances these lead to a falling rate of profit. The dynamic model will then be used to analyse the trajectories of some contemporary capitalist economies and to help understand the current structure of the world economy.

Item Type:Articles
Glasgow Author(s) Enlighten ID:Cockshott, Dr William
Authors: Cockshott, P.
Subjects:H Social Sciences > HB Economic Theory
College/School:College of Science and Engineering > School of Computing Science
Journal Name:World Review of Political Economy
Publisher:Pluto Journals
ISSN (Online):2042-8928

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