was marx wrong about falling rate of profit?

Doug Henwood dhenwood at panix.com
Sat Dec 7 07:55:54 PST 2002


Bradford DeLong wrote:


>Not if the price of machinery relative to the price of labor is
>going down--as it has for the past two hundred years. With a falling
>price over time of machinery, the rate of accumulation has to be
>higher than the labor force growth rate plus the rate at which the
>labor-time price of machinery is changing in order for Marx's
>predictions to have even a chance of coming true.
>
>And, in fact, it hasn't. The physical capital-labor ratio keeps
>rising, apparently without bound. The value capital-labor ratio
>looks pretty constant...

Though of course the profit rate is subject to swings across the business cycle and in longer intervals as well - e.g., in the U.S., the long decline from the late 1960s through the early 1980s, the rise from then into the late 1990s, the downdraft and weak recovery since, moves I'd say are more a refelction of the state of the class struggle than the organic composition of capital.

Doug



More information about the lbo-talk mailing list