Marx's crisis theory

Philip Ferguson plf13 at
Tue Dec 18 14:32:42 MST 2001

Hi Karl,

your equation for the rate of profit is wrong.  The rate of profit is s/(c
+ v), ie surplus value divided by the sum of constant capital (machines,
raw material, buildings etc) and variable capital (expended on
labour-power).  Thus when you rightly note the tendency for constant
capital to displace variable capital (which is the source of
surplus-value), it should have been clear that the result would be to
depress the rate of profit.

Marx's crisis theory is contained in vol 3 of 'Capital'.  Since few
Marxists bother to read vol 1, let alone 2 and 3, all kinds of
neo-Keynesian ideas are often put forward under the claim of being Marxist
explanations.  Marx explains clearly that the law of the tendency of the
rate of profit to fall is the "most important law of modern political
economy" (quote from the 'Grundrisse', another sadly under-read vital text)
and spends a good 50 pages going into it in vol 3.

If you want some good post-Marx work, check out anything on political
economy by Paul Mattick (snr), Henryk Grossman's 'Law of Accumulation. . .'
(the first book ever published by the Frankfurt School, back in 1929, and
finally published in English around 1992 by Pluto), Tom Kemp's 'Marx's
"Capital" Today' (New Park, 1980).  Some of Ernest Mandel is also OK,
although Mandel has the annoying habit of tryng to reconcile Marx with
whatever radical fad is current in bourgeois political economy.

Philip Ferguson

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