….Marx’s law of the tendency of the rate of profit to fall (LTRPF) …the ‘law as such’, says that the rate of profit will tend to fall over time because the organic composition of capital (the ratio of the value of constant capital to variable capital) will tend to rise faster than the rate of surplus value (the ratio of surplus value to variable capital). This flows from the basic equation of profitability, s/c+v, where c/v rises faster than s/v because Marx’s value theory argues that only labour power creates value. So if the value of constant capital (machinery, plant, raw materials etc) rises faster than the value of variable capital (the value of labour power and the only creator of value), then the rate of profit will fall, other things being equal.
Roberts is one of the best teachers of the technical aspects of Marx’s scientific study of political economy. My readers are encouraged to follow his blog which does a better job of this than I am capable of.
I submitted the following comments to Roberts post on a controversy surrounding Marx’s view of the long term tendency of the rate of profit under capitalism to fall. My point relates to my analysis of “mature capitalism” and my contention that there are fundamental qualitative or ‘epochal’ shifts related to the effective full extension of commodity social relations on a global scale. Below the comments are slightly expanded and re-edited.
Up until the present historical moment the capitalist system has had definite pathways of expansion and thus recovery open to it this is because the maturation of the system of commodity production on a global scale was as yet incomplete during the 20th Century.
Consider that it was not until the Great Depression and War years of the 1940’s in the that subsistence agriculture was substantially eliminated United States. Each new wave of historical economic crisis has pushed forward the integration of non-proletarianized toilers into the commodity producing working class or into forms of directly exploited commodity production in agriculture. This along with the massive material destruction of inter-imperialist warfare has allowed the capitalist accumulation cycles to begin anew and thusly to partially overcome the tendency toward the falling rate of profit by means of a reset or ‘reboot’.
The full globalization of capital over the past 3 decades and the global expansion of the proletariat has created the conditions where inter-imperialist conflict presents fundamental historic risks to the survival of the imperial state-capitalist regimes which are essential to the continued semi-stable operation of the capitalist system. The total net growth of the system as a whole which remained vibrant during the 20th century has met its limits in the 21st.
This reality presents a qualitative shift not just in the analysis of the political economy of capitalism but also in the tactical considerations before Marxists and socialists who advocate political struggle which follows the line of the social interests of the working class.
Michael Heinrich is an exponent of what is known as the ‘New German Reading of Marx’, which interprets the theory of value that Marx presents in Capital as a socially specific theory of ‘impersonal social domination’. He is a collaborator on the MEGA edition of Marx and Engel’s complete works and has published several philological studies of Capital. He has also authored a work on Marx’s theory of value, The Science of Value, which is forthcoming in the Historical Materialism book series. And recently he has published An Introduction to all Three Volumes of Capital as his first full-length work to appear in English.
I am not going to do a critique of Heinrich’s views on the theory of value, as this has been done by Guglielmo Carchedi in his book, Behind the Crisis (see chapter 2). But I am moved to respond to a recent article of Heinrich’s…
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