From: Rakesh Bhandari (bhandari@BERKELEY.EDU)
Date: Mon Mar 28 2005 - 13:33:17 EST
Paolo wrote: "Marx, as we can recall does not have the falling rate of profit in his discussion of the general law." This is how I understand Marx's general law in briefest terms: Accumulation of capital raises its organic composition which in turn depresses the profit rate, but the depression of the profit rate is not incompatible with a rising in the rate of accumulation (see quote below) which expresses itself in an increase in the absolute level of employment though at a diminishing rate; the absolute rise is thus not sufficient to absorb both the new population and the population expelled from declining firms and industries. Marx assumes that capitalist industry will favor the former, making wretches of the displaced workers. Here's the quote from volume 3 I had in mind: "[Richard] Jones is right to stress that despite the falling rate of profit, the 'inducements and faculties to accumulate' increase. Firstly, on account of the growing relative surplus population. 2ndly, beacuase as the productivity of labor grows, so does the mass of sue value reprsented by the same exchange value, ie. material elements of capital. 3rdly, because of the increasing diversity of branches of production. 4thly through thre development of the credit system, joint stock companies, etc, and the ease with which the possessor of money can now transforme it into capital without having to become an industrialist capitalist. Fifthly, the growth in needs and desire for enrichment. 6thly, the growing mass of investment in fixed capital, and so on." Capital 3 Vintage, p. 375 Marx's crisis theory is not based on a falling rate of profit but an insufficiency in the mass of surplus value. Yours, Rakesh
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