The falling rate of profit as a research program

Thomas Michl

No 2023-02, Working Papers from Department of Economics, Colgate University

Abstract: This paper argues that the Marxian law of the tendency of the rate of profit to fall defines an important analytical framework for studying the role of capital-using, labor-saving (Marx-biased) technical change in the accumulation process. Using a tractable one-sector model of growth and distribution, the paper examines two viability conditions used in the study of Marx-biased technical change. In the Standard Interpretation, capitalists choose techniques if they increase their transitional rate of profit. As Duncan Foley and others have observed, if wages are rising, Marx’s prediction of a declining rate of profit can go through conditionally. Anwar Shaikh has argued that under †real competition†capitalists will be forced by competitive forces to choose techniques that increase their profit margins, even if they lower the rate of profit. While empirical research on the viability condition under the Standard Interpretation has generally found it to be comfortably satisfied (which would be consistent with real competition as well), there is enough ambiguity in the evidence to warrant further study. Theoretical research has only begun to explore the possibility that a game-theoretic approach might bridge the gap between these accounts. Other issues raised include the origin of Marx-biased technical change and the role of wage growth in mediating technical choices.

JEL-codes: B51 O3 O4 (search for similar items in EconPapers)
Date: 2023-08-02
New Economics Papers: this item is included in nep-hme and nep-pke
References: Add references at CitEc
Citations:

Downloads: (external link)
https://digitalcollections.colgate.edu/node/6930 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cgt:wpaper:2023-02

Access Statistics for this paper

More papers in Working Papers from Department of Economics, Colgate University Contact information at EDIRC.
Bibliographic data for series maintained by Chad Sparber ().