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View Full Version : The tendency for the rate of profit to fall?



n0ro
29th January 2015, 21:58
I suppose this question is primarily targeted to Marxists on this board.

A central tenant to the theory of crises is the tendency of the rate of profit to fall. As I understand it, Marx argues that as constant capital increases, variable capital decreases, and therefore potential surplus value decreases. Thus, there is a tendency for the rate of profit to fall. Moreover, this tendency is a crucial element to the Marxist understanding of crises.

Labor-power is the only source of surplus value; thus, machinery is incapable of producing surplus value.

However, do not present economic conditions contradict this notion? Is it not true that the mechanization of production has served only to produce exponentially rising profits at the expense of job security? Has technology not replaced human labor-power as a value-producing source?

I understand that this is a tendency, not a law. I also understand that there are a multitude of counter-tendencies that can disrupt the falling rate of profit. But is it reasonable to reduce the discussion to counter-tendencies?

Personally, I feel that even if the tendency is dismissed, Marx's critique remains valid. The exploitation of labor under the capitalist mode of production is without dispute.

What are your thoughts on this issue?

Anglo-Saxon Philistine
30th January 2015, 01:52
The first thing that should be noted is that it is possible for the volume of profits to increase while the rate of profit remains the same or falls.

The second thing is, the modern capitalist economy isn't really "mechanised" except in the metropole of the imperialist system. And the highly mechanised and automated enterprises of the metropole would grind to a halt without the intensive exploitation of labour from the periphery of the imperialist system, much of it connected with pre-capitalist forms of exploitation (e.g. semi-free agricultural labour etc.).

Creative Destruction
30th January 2015, 04:08
However, do not present economic conditions contradict this notion?

No, in fact, Andrew Kliman showed that there was a falling profit rate in the last 50 or so years in his book Reclaiming Marx's Capital.

ckaihatsu
1st February 2015, 19:18
[23] A Business Perspective on the Declining Rate of Profit

http://s6.postimg.org/dkv92iinl/23_A_Business_Perspective_on_the_Declining_Rat.jpg (http://postimg.org/image/yuivdcyy5/full/)