Marx's 'Capital' - Sixth Edition by Ben Fine & Alfredo Saad-Filho

Author:Ben Fine & Alfredo Saad-Filho [Fine, Ben & Saad-Filho, Alfredo]
Language: eng
Format: epub
ISBN: 9781783719747
Publisher: Pluto Press
Published: 2016-07-20T04:00:00+00:00

9

The Falling Rate of Profit

Marx’s theory of the law of the tendency of the rate of profit to fall (LTRPF) has been extremely controversial in terms of its validity, interpretation and significance. This chapter outlines Marx’s law and answers some of the criticisms that have been levelled against it. Two misguided interpretations of the LTRPF are often found in the literature. On the one hand, Marx’s contribution is removed to the realm of high philosophy, with the LTRPF taking on the character of an abstract truth, something derived from the logic of capital itself and therefore irrefutable, but also lacking any empirical significance. On the other hand, Marx’s analysis has been treated as if it amounted to a set of empirical propositions that are correct, incorrect or somewhere in between, depending on the analyst’s inclinations and the implications of the chosen model of the economy.

The position adopted here differs from both of these, admittedly parodied, extremes. However, the argument is a complex one, depending upon conceptual rather than algebraic considerations. As a result, the structure of the analysis is summarised first, and this is followed by a more detailed account containing elaboration and justification.

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