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Michael Roberts Blog

bIogging from a marxisl economisl


Returning to Heinrich
ack in May, I did a shorl osl (niip.//incncxircccssicn.ucr!prcss.ccn/2013/05/19/nicnac|-ncinricn-narxs-|au-an!-
crisis-inccrq/ (niip.//incncxircccssicn.ucr!prcss.ccn/2013/05/19/nicnac|-ncinricn-narxs-|au-an!-crisis-inccrq/))
oulIining my re|eclion of lhe argumenls of MichaeI Heinrich, a Marxisl schoIar. He recenlIy vrole an arlicIe in
lhe US |ournaI, Mcnin|q |cticu, arguing lhal Marx's Iav of rofilabiIily vas fauIly, emiricaIIy unroven or even
unrovabIe and anyvay, Marx decided lo dro il in his Ialer vorks and onIy ediling dislorlions by IngeIs have
Iefl us eigones vilh lhe imression lhal Marx sliII suorled lhe Iav (see monlhIyreviev.org-
Crisis_Theory_lhe_Lav_of_lhe_Tendency_of_lhe_Irofil_Rale_lo_IaII_and_Marxs_Sludies_in_lhe_1870s__Monl
(hll://lhenexlrecession.fiIes.vordress.com/2013/05/monlhIyreviev-org-
crisis_lheory_lhe_Iav_of_lhe_lendency_of_lhe_rofil_rale_lo_faII_and_marxs_sludies_in_lhe_1870s__monl.df)).
WeII, since lhen lhere have been severaI more resonses lo Heinrich's argumenls. Andrev KIiman ci a| has
ubIished a Iong reIy (niip.//uuu.narxisinunanisiiniiiaiitc.crg/cccncnic-crisis/inc-unnaking-cj-narxs-capiia|-
ncinricns-aiicnpi-ic-c|ininaic-narxs-crisis-inccrq.nin| (niip.//uuu.narxisinunanisiiniiiaiitc.crg/cccncnic-crisis/inc-
unnaking-cj-narxs-capiia|-ncinricns-aiicnpi-ic-c|ininaic-narxs-crisis-inccrq.nin|)). Sam WiIIiams has aIso slarled a
lvo-arl resonse on his bIog (niip.//criiiquccjcrisisinccrq.ucr!prcss.ccn/2013/07/07/nicnac|-ncinricns-ncu-rca!ing-cj-
narx-a-criiiquc-pi-1/ (niip.//criiiquccjcrisisinccrq.ucr!prcss.ccn/2013/07/07/nicnac|-ncinricns-ncu-rca!ing-cj-narx-a-
criiiquc-pi-1/)) and more recenlIy Id George has deIivered a very cIear and ercelive defence of Marx's Iav
(niip.//c!gccrgcscincr||cg.ucr!prcss.ccn/2013/07/04/|ui-sii||-ii-ja||s-cn-inc-raic-cj-prcjii/
(niip.//c!gccrgcscincr||cg.ucr!prcss.ccn/2013/07/04/|ui-sii||-ii-ja||s-cn-inc-raic-cj-prcjii/)). And as romised in my
May osl, G Carchedi and I have roduced a |oinl iece in reIy lo Heinrich. I allach our drafl here (Heinrich
aer 22 }une 2013 NIW-4) (hll://lhenexlrecession.fiIes.vordress.com/2013/07/heinrich-aer-22-|une-2013-
nev-4.docx)And ve are vorking on an even more comrehensive aer deaIing vilh nol |usl Heinrich's
argumenls bul aIso olher crilicisms of Marx's Iav of rofilabiIily and ils roIe in crises. So readers vho vanl lo
foIIov lhis debale nov have Ienly lo read!
I am sending quile of bil of efforl vilh Heinrich's argumenls because in doing so I lhink il viII heI lo deveIo
our underslanding of Marx's lheory of crisis and lhe evenluaI demise of cailaIism. ul nov in lhis osl, I |usl
vanl lo seII oul lhe imIicalions for crisis lheory and for lhe fulure of cailaIism in acceling Heinrich's
osilion and re|ecling Marx's Iav. In my viev, if Heinrich's viev is acceled, il vouId be criIing for a
coherenl lheory of cailaIisl crises, bul aIso for lhe key Marxisl concel lhal cailaIism is nol an elernaI economic
syslem lhal can Iasl forever bul is a lransilory mode of roduclion Iike lhe sIavehoIding economy of lhe ancienls,
feudaIism or Asian desolism.
In olher vords, lhe Iav is cenlraI lo Marx's maleriaIisl concelion of hislory. If il is beIieved lhal, in lhe Iong run,
lhe rale of rofil mighl |usl as easiIy rise as faII or lhal il viII lend lo osciIIale forever around some average vaIue,
as Heinrich suggesls, lhen lhe cailaIisl mode of roduclion lakes on lhe characler of a ermanenl ongoing
syslem. Inslead, Marx's Iav of lhe lendency for lhe rale of rofil lo faII over lhe Iong run mosl convincingIy
demonslrales lhe lransienl nalure of cailaIism.
The more lhe vorId's ouIalion is dravn inlo lhe cailaIisl mode of roduclion, lhe more lhe Iav exerls ils
over of rediclion. As lhe reserve army of Iabour gIobaIIy is used u in nev rounds of exIoilalion lo creale
more vaIue and surIus vaIue, lhe more lhe Iav viII begin lo oerale because lhe rise in lhe organic comosilion
of cailaI (even afler lhe cheaening effecls on conslanl cailaI from nev lechnoIogy) viII oulslri lhe rise in lhe
rale of surIus vaIue. Indeed, lhe more lhere deveIos a vorId rale of rofil, lhe more lhe Iav of lhe lendency of
lhe rale of rofil lo faII viII oerale (see my aer roberls_michaeI-a_vorId_rale_of_rofil.
(hll://lhenexlrecession.fiIes.vordress.com/2012/09/roberls_michaeI-a_vorId_rale_of_rofil.df)). The rale of
surIus vaIue, among olher counleracling faclors, may change in such a vay as lo cause lhe rale of rofil lo rise
for a cerlain lime bul lhe vorId rale of rofil musl faII in lhe Iong run.
As }im MiIIer ul il in his crilique of lhe allack on lhe Iav by one of lhe founders of lhe MonlhIy Reviev schooI,
IauI Sveezy: If lhe rale of rofil has nol yel faIIen, or ils direclion is nol yel definileIy demonslraled,
nonelheIess il musl inevilabIy faII evenluaIIy. The rale of rofil musl faII in Iife or lhe lheory is incorrecl. The
Iav is unidireclionaI and irreversibIe. The Iav is lhe Iav of lhe lendency of lhe rale of rofil lo faII, nol lhe Iav of
lhe lendency of lhe rale of rofil lo rise, faII or go vhichever vay il Ieases.
(niip.//uuu.narxisis.crg/su|jcci/cccncnq/auincrs/ni||cr/jrcp.nin
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(niip.//uuu.narxisis.crg/su|jcci/cccncnq/auincrs/ni||cr/jrcp.nin)). This same argumenl drove Henryk Grossman lo
his groundbreaking book on Marx's Iav of breakdovn and crises. As Marx says, lhe counleracling lendencies lo
lhe Iav do nol annuI lhe generaI Iav. ul lhey have lhe effecl lhal lhe Iav oerales more a lendency i.e. vhose
absoIule reaIisalion is heId u, deIayed and veakened by counleracling faclors. Marx 1981, 341-2.
The oinl is lhal increasing lhe rale of surIus vaIue and lhereby lhe amounl of surIus vaIue in reIalion lo lhe
advanced cailaI can onIy be achieved by melhods lhal aIso increase lhe mass and vaIue of conslanl cailaI
emIoyed in reIalion lo lhe number of vorkers engaged in lhe roduclion rocess (lhe lechnicaI comosilion of
cailaI). This is key: Marx again: Moreover, il has been demonslraled and inis ccnsiiiuics inc rca| sccrci cj inc
icn!cncq cj inc raic cj prcjii ic ja|| lhal lhe maniuIalions lo roduce reIalive surIus vaIue amounl, on lhe vhoIe,
lo lransforming as much as ossibIe of cerlain quanlily of Iabour inlo surIus vaIue on lhe one hand, and
emIoying as IillIe Iabour as ossibIe in roorlion lo lhe invesled cailaI on lhe olher, so lhal lhe same reasons
vhich ermil raising lhe inlensily of exIoilalion ruIe oul exIoiling lhe same quanlily of Iabour as before by lhe
same cailaI Marx 1962, 228
The organic comosilion of cailaI musl increase and lhis unavoidabIe grovlh in lhe organic comosilion
uIlimaleIy sinks lhe rale of rofil, no maller hov high lhe rale of surIus vaIue may cIimb. The more advanced
lhe organic comosilion of cailaI, lhe Iess effecl a rising rale of surIus vaIue can have in overcoming a
dvindIing rofil rale. Wilh fever vorkers emIoyed, lhe roducl's vaIue becomes increasingIy comosed of
vaIue refIecling conslanl cailaI. Wilh lhe absoIule amounl of Iiving Iabour nevIy incororaled inlo individuaI
commodilies decreasing enormousIy as roduclion deveIos, lhe absoIule mass of unaid Iabour conlained in
lhem viII Iikevise decrease, hovever much il may have grovn as comared vilh lhe aid orlion. Marx, 1962,
221.
Sure, malhemalicaIIy, lhe rale of surIus vaIue couId lend lovards infinily (vhere vorkers Iive on air), as couId
lhe organic comosilion of cailaI, bul veII before lhal, lhe rale of rofil vouId have faIIen. Thal's because each
increase in roduclivily (hours of unaid Iabour lo aid Iabour) has Iess and Iess an effecl on lhe rale of surIus
vaIue: lhe smaIIer aIready lhe fraclionaI arl of lhe day faIIing lo necessary Iabour, lhe grealer lhe surIus
Iabour, lhe Iess can any increase in roduclive forces ercelibIy diminish necessary Iabour, since lhe
denominalor has grovn enormousIy. Marx 1973, 340.
Moreover, lhere is a sociaI Iimil on lhe reduclion in variabIe cailaI and lhus lhe maximum rale of surIus vaIue,
sel by lhe cIass slruggIe over lhe dislribulion of lhe vaIue crealed belveen Iabour and cailaI. So lhe rale of
rofil viII faII veII before lhe rale of surIus vaIue moves lovards infinily. The lendency for lhe organic
comosilion lo rise is slronger because lhe rale of surIus vaIue can onIy rise vilhin cerlain definile Iimils,
Marx 1981 333.
So lhe former lendency is lhe Iav and lhe Ialler is a veaker counlerlendency. The organic comosilion of cailaI
and lhe rale of surIus vaIue are nol indeendenl variabIes, eilher one of vhich mighl overover lhe olher. One
rises as a lendency and lhe olher as a counlerlendency and by definilion and reaIily, lhe Ialler is veaker.
Marx considered lhe Iav of lhe lendency of lhe rale of rofil lo faII as lhe mosl imorlanl Iav of molion of
cailaIism. And il is because il exIains and redicls crises and sIums under cailaIism. And il aIso exIains
vhy and redicls lhal cailaIism cannol Iasl. Iilher lhe vorking cIass viII remove lhe cailaIisl cIass and
inlroduce a democralicaIIy Ianned economy using lhe resources of lhe gIobe in common lo deveIo sociaIism,
or cailaIism viII descend inlo barbarism |usl as lhe ancienl sIave sociely of lhe Roman emire did or lhe Asian
absoIulisl slales.
This enlry vas osled on }uIy 25, 2013 al 5:21 am and is fiIed under cailaIism, economics, marxism, IrofilabiIily.
You can foIIov any resonses lo lhis enlry lhrough lhe RSS 2.0 feed. You can Ieave a resonse, or lrackback from
your ovn sile.
72 Responses to "Returning to Heinrich
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http://thenextrecession.wordpress.com/2013/07/25/returning-to-heinrich/
Page 2 oI 30
va!!cbacza 5ays:
}uIy 25, 2013 al 6:40 am + ReIy
RebIogue eslo en Icono Marx 21.
BnIIy 5ays:
}uIy 25, 2013 al 10:47 am + ReIy
There are lhree obvious robIems, and many more nol so obvious ones vilh lhis argumenl.
1) If ve lake lhe argumenl lhal cailaIism musl coIIase because of lhe faIIing rale lhal Ieads us lovards lhe
argumenl of ernslein and olhers. Il is leIeoIogicaI. CailaIism musl coIIase of ils ovn conlradiclions so no
need for us lo do anylhing lhen, so ve mighl as veII en|oy lhe ride vhiIe il Iasls.
2) The argumenl lhal lhe rale of surIus vaIue cannol simIy kee exanding is based on lhe idea lhal lhe
vorking-day is Iimiled in Ienglh lo 24 hours. ul il isn'l. Il is onIy Iimiled lo 24 hours of any arlicuIar
concrele Iabour! Ior examIe, a brickIayer can onIy vork for 24 hours. ul, vaIue and surIus vaIue are
measured in abslracl Iabour nol concrele Iabour. There is essenliaIIy no Iimil lo lhe number of abslracl Iabour
hours in a day, because an hour of any arlicuIar concrele Iabour, as comIex Iabour, mighl be lhe equivaIenl
of 10, 100, 1000 hours of abslracl Iabour, deending uon vhal consumers are reared lo ay for lhe
roducl of lhal abslracl Iabour. On lhal basis lhe argumenl lhal lhe number of hours avaiIabIe lo be surIus
becomes ever roorlionaleIy smaIIer faIIs.
3) AIlhough, il is ossibIe lo argue lhal for any individuaI cailaI lhere is a noled lendency for lhe organic
comosilion of cailaI lo rise vilh lhe increasing magnilude of lhe cailaI lhough as Marx demonslrales
even lhis is Iimiled by aII lhose counlervaiIing forces lhal reduce lhe vaIue of conslanl cailaI lhere is no
reason vhy lhis shouId aIy for CailaI in GeneraI or indeed across many cailaIs.
If economies consisled onIy of lhe same cailaIs lhal |usl conlinuaIIy gol bigger lhal vouId be so, bul lhal is
nol lhe vay economies deveIo. As Marx describes in VoIume 1, cailaIs conlinuaIIy fragmenl as veII as
concenlrale and cenlraIise. Indeed some even very big cailaIs, lhal had high organic comosilions of cailaI,
Iike molor car makers, go busl, vhiIsl olher nev cailaIs vilh reIaliveIy Iov organic comosilions of cailaI,
Iike high lechnoIogy comanies, lake lheir Iace.
If more oId comanies vilh high organic comosilions go busl, bul more nev comanies vilh Iov organic
comosilions (and high rales of rofil) lake lheir Iace, maybe uliIising some of lhe nov defuncl cailaI from
lhe former, lhen for lhe economy as a vhoIe, lhe organic comosilion of cailaI viII faII, and lhe rale of rofil
viII rise,m even vilhoul any consideralion of vhelher such a rocess has aIso raised lhe rale of surIus vaIue.
ul, il does nol have lo be lechnoIogy comanies or even high vaIue roduclion. Marx noled lhal one of lhe
biggesl grovlh areas resuIling from mechanisalion in his day vas in lhe number of domeslic servanls. Such
Iabour, of course does nol roduce surIus vaIue, bul loday ve see lhal one grovlh area is reciseIy in
comanies roviding such faciIilies, and lhe vorkers lhey emIoy do roduce surIus vaIue, yel by ils nalure
such roduclion has a Iov organic comosilion of cailaI.
The same is lrue of much service roduclion, lhough neo-fordism is enlering lhere loo. If ve Iook al lhe
money consumers are reared lo send for designer IabeIs and so on, again lhe vaIue is arising nol from lhe
conslanl cailaI comonenl, bul lhe comIex Iabour comonenl. 90% of lhe vaIue of AIe roducls is
generaled in lhe US, and mosl of lhal is due lo lhe high vaIue comIex Iabour emIoyed, nol lhe fixed or
circuIaling conslanl cailaI.
Some of lhe biggesl roducers of vaIue are nol roducers of hysicaI commodilies al aII. Inlerlainmenl of
various kinds has become a massive induslry, and nearIy aII of lhe vaIue crealed is allribulabIe lo lhe comIex
Iabour emIoyed nol lo conslanl cailaI. In facl, a simiIar argumenl couId be made in resecl of lhe financiaI
services induslry lo lhe exlenl lhal lhey acl as roducers of financiaI commodilies soId lo cuslomers ralher
lhan simIy as sharers in lhe surIus vaIue crealed by roduclive cailaI.
Anolher examIe vouId be lransorl and communicalions. The Inlernel has reIaced vasl amounls o conslanl
cailaI reviousIy required lo communicale around lhe gIobe, and in some vays lhal is lrue of lransorl of
goods loo, because il can be used lo inslanlIy Iink logelher lransorl nelvorks so lhal goods move over
shorler dislances.
AII of lhese lhings have acled lo raise lhe rale of rofil. ul, lhere has aIso been a massive rise in lhe rale of
lurnover of cailaI vilh lhe same effecl. ul, more lhan lhal. Marx and IngeIs in lhe reIevanl seclions of
CailaI deaIing vilh lhe rale of lurnover, oinl oul lhal il nol onIy raises lhe rale of rofil, bul il aIso reIeases
Iarge amounls of reviousIy lied u cailaI.
IinaIIy, Marx makes lhe oinl himseIf lhal lhe rale of rofil changes onIy over very Iong eriods of lime, and
lhen onIy as a consequence of many fIuclualions, u and dovn of individuaI rales of rofil, and rales of rofil
in differenl sheres. In discussing lhe rale of inleresl IngeIs makes lhe oinl lhal lhe rale of inleresl remains
slabIe because lhe rale of rofil ilseIf remains slabIe for very Iong eriods. As lhey bolh oinl oul, lhe rale of
inleresl faIIs as lhe rale of rofil rises.
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Ierhas noling lhis Ialler oinl lhen lhe facl lhal inleresl rales have been faIIing for lhe Iasl 30 years, is one of
lhe cIearesl indicalions of lhe exlenl lo vhich lhe rale of rofil gIobaIIy has been rising during aII lhal lime!
5ystcmic Disnrdcr 5ays:
}uIy 25, 2013 al 6:09 m + ReIy
offy argues above:
1) If ve lake lhe argumenl lhal cailaIism musl coIIase because of lhe faIIing rale lhal Ieads us lovards
lhe argumenl of ernslein and olhers. Il is leIeoIogicaI. CailaIism musl coIIase of ils ovn conlradiclions
so no need for us lo do anylhing lhen, so ve mighl as veII en|oy lhe ride vhiIe il Iasls.
Nol so. SociaIism is nol an inevilabIe oulcome of lhe coIIase of cailaIism, hovever desirabIe. CailaIism
vas nol lhe inevilabIe oulcome of lhe conlradiclions of feudaIism. SociaI forces, movemenls and aclions
viII delermine vhal form lhe osl-cailaIisl vorId viII lake.
Moreover, ve can'l make any rediclions on vhen cailaIism coIIases, bul il is nol IikeIy lo be a sudden
bolloming oul a decIine vilh lhe occasionaI ulick seems much more IikeIy. ImmanueI WaIIerslein,
vhen he soke al lhe Lefl Iorum in Nev York Cily lhis year, redicled ve'II be Iiving under a differenl
economic syslem in 2050 bul nole he did nol say vhal syslem. The end of cailaIism mighl veII be Ialer
lhan lhal, bul il seems lo me lhal il'II be during lhe currenl cenlury.
If lhe vorking cIass gives u, doesn'l organize, aIIovs a decaying bourgeoisie lo mainlain lhe inilialive,
humanily couId descend in a brulaI fascislic lye of sociely in vhich lhe ouIalion dros significanlIy
under lhe imacl of a hoeIessIy oIIuled vorId vilh deIeled resources. If ve organize and acl, lhen a
sociaIisl beller vorId is in our gras.
ernslein's argumenl vas based on lhe absurd idea lhal lhe bourgeoisie vouId sil back and aIIov an
orderIy lakeover by lhe vorking cIass. I don'l see anybody here arguing for lhal. CailaIism viII coIIase,
bul vhal foIIovs is u lo us.
BnIIy 5ays:
}uIy 26, 2013 al 9:26 am
I'm sorry, bul lhis argumenl makes no sense lo me. You slarl by saying,
SociaIism is nol an inevilabIe oulcome of lhe coIIase of cailaIism, hovever desirabIe. CailaIism
vas nol lhe inevilabIe oulcome of lhe conlradiclions of feudaIism. SociaI forces, movemenls and
aclions viII delermine vhal form lhe osl-cailaIisl vorId viII lake.
I enlireIy agree vilh lhal, vhich is one reason I lhink lhe argumenls of lhe calaslrohisls are so
dangerous! AII hislory, as Trolsky argued shovs lhal economic veakness Ieads lo disarray amongsl
lhe vorking cIass, demoraIisalion, decay of organisalions, alomisalion, Iack of economic and sociaI
veighl and so on. Il may cause vorkers lo feeI more resenlfuI and biller, bul vilh no means of doing
anylhing aboul il. Il is economic grovlh lhal slrenglhens lhe osilion of vorkers as he sels oul in The
Curve of CailaIisl deveIomenl and IIood Tide.
ul, you end by saying.
CailaIism viII coIIase, bul vhal foIIovs is u lo us.
ul, lhal by definilion means lhal vorkers viII nol have organised lhemseIves lo have broughl
forvard lheir ovn reIacemenl for il! Under lhose condilions of vorkers nol having laken advanlage
of lhe more conducive condilions of cailaIisl grovlh lo organise lhemseIves, lo deveIo lheir ovn
vorker-ovned and conlroIIed seclor of lhe economy, in lhe vay Marx and IngeIs described, and
vhich Draer laIks aboul in The Tvo SouIs Of SociaIism, lhen lhe inevilabIe coIIase viII aImosl
cerlainIy mean lhal vorkers viII NOT be in a osilion lo imose our soIulion, and lhings WILL lhen
descend inlo barbarism of one sorl or anolher.
5ystcmic Disnrdcr 5ays:
}uIy 26, 2013 al 8:49 m
I'm nol so sure Trolsky argued lhe oinl you allribule lo him. Lel us sel lhal aside, and address your
resonse.
One need nol be a calaslrohisl lo beIieve lhal cailaIism viII one day end. And as I exIicilIy said, I
don'l lhink lhere viII be a sudden, lolaI coIIase more Iike a dovnvard lra|eclory vilh eriods of
slabiIily (muddIing aIong) unclualed by furlher decIines of lhe sorl ve had a fev years back and lhe
occasionaI ulick.
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CailaIism viII coIIase, bul vhal foIIovs is u lo us is comIeleIy consislenl vilh lhe earIier quole
lo vhich you say you are in agreemenl. Workers organizing lhemseIves is lhe very sociaI force, lhe
very movemenl, lhal vouId bring aboul a sociaIisl fulure. Thal is cerlainIy vhal I vish lo see, and lhe
olenliaI for il is lhere.
I aIso have lo oinl oul lhal vhen economic condilions are (reIaliveIy) good, lhere aren'l miIIions of
eoIe fomenling rebeIIion. Il's vhen limes aren'l good lhal Iarge sociaI movemenls arise. Russia in
1917 vasn'l exaclIy a icnic, nor vas Germany al lhe end of WorId War I nor vas lhe cailaIisl vorId
during lhe Greal Deression. (And lhe 1960s are nol an excelion lhose vere nol movemenls lhal
lhrealened cailaIism.)
You are arguing, inlenlionaIIy or nol, lhal cailaIism viII go on forever unliI, and if, vorkers
overlhrov il. Thal is ahisloricaI and againsl lhe body of vork roduced by Marx and IngeIs. Once
again, everylhing of human crealion has ils Iimils and ils lime, and cailaIism viII go lhe vay aII
receding syslems did. Whal viII foIIov is nol vrillen in lhe slars.
BnIIy 5ays:
}uIy 26, 2013 al 9:26 m
Trolsky vrole in IIood Tide againsl lhe uIlra Iefls vho lhoughl lhal some kind of economic
calaslrohe vas a shorl cul lo revoIulion,
Wilh such oIilicaI and sychoIogicaI remises, a roIonged crisis, aIlhough il vouId doublIess acl lo
heighlen lhe embillermenl of lhe vorking masses (eseciaIIy lhe unemIoyed and semi-emIoyed),
vouId neverlheIess simuIlaneousIy lend lo veaken lheir aclivily because lhis aclivily is inlimaleIy
bound u vilh lhe vorkers' consciousness of lheir irreIaceabIe roIe in roduclion.
IroIonged unemIoymenl foIIoving an eoch of revoIulionary oIilicaI assauIls and relreals does nol
al aII vork in favour of lhe Communisl Iarly. On lhe conlrary lhe Ionger lhe crisis Iasls lhe more il
lhrealens lo nourish anarchisl moods on one ving and reformisl moods on lhe olher.
He goes on lhal a boom,
In conlrasl, lhe induslriaI revivaI is bound, firsl of aII, lo raise lhe seIf-confidence of lhe vorking cIass,
undermined by faiIures and by lhe disunily in ils ovn ranks, il is bound lo fuse lhe vorking cIass
logelher in lhe faclories and Ianls and heighlen lhe desire for unanimily in miIilanl aclions.
We are aIready observing lhe beginnings of lhis rocess. The vorking masses feeI firmer ground under
lheir feel. They are seeking lo fuse lheir ranks. They keenIy sense lhe sIil lo be an obslacIe lo aclion.
They are slriving nol onIy lovard a more unanimous resislance lo lhe offensive of cailaI resuIling
from lhe crisis bul aIso lovard rearing a counler-offensive, based on lhe condilions of induslriaI
revivaI. The crisis vas a eriod of fruslraled hoes and of embillermenl, nol infrequenlIy imolenl
embillermenl. The boom as il unfoIds viII rovide an oulIel in aclion for lhese feeIings. This is
reciseIy vhal lhe resoIulion of lhe Third Congress, vhich ve defended, slales:
You do nol need lo be a calaslrohisls lo beIieve lhal one day CailaIism viII end, lhal is lrue bul
besides lhe oinl. The oinl is lhal lhere are a vhoIe svalhe of eoIe on lhe Lefl vho ereluaIIy
argue lhal CailaIism is eilher aIvays in some kind of serious crisis, or lhal some calaslrohic crisis is
|usl around lhe corner. Thal is vhal is meanl by calaslrohism. Ils a Iazy aIlernalive lo acluaIIy
anaIysing cailaIism as il reaIIy is, in lhe hoe lhal somehov hislory viII do lhe |ob for us.
And, if you lhink lhal lhe fulure resides in some kind of conlinuaI dovnlrend vilh lhe occasionaI u
lick, lhen an honesl anaIysis does nol give much hoe for lhal scenario al lhe momenl does il` We are
exeriencing robabIy lhe biggesl boom and deveIomenl of lhe roduclive forces in cailaIisl hislory
yel. One lhal is nol |usl dee bul increasingIy vide, as il has aIready crealed miIIions of nev vorkers in
China and olher arls of Asia, and is nov doing lhe same lhing in Africa.
CailaIism viII coIIase means il faIIs ralher lhan being ushed. Iar from being of lhe viev lhal
CailaIism viII Iasl for ever, I am very much of lhe cam lhal beIeives il viII onIy go on our lerms if
ushed! ul, ushing in my oinion means nol lhe kind of romanlic sludenl revoIulionary oIilics lhal
lhe Iar Lefl have confined lhemseIves lo, vhen lhey haven'l been |usl allacking each olher, bul means
acluaIIy buiIding here and nov a sociaIisl aIlernalive based on vorkers ovnershi and conlroI of lhe
means of roduclion.
I aIso have lo oinl oul lhal vhen economic condilions are (reIaliveIy) good, lhere aren'l miIIions of
eoIe fomenling rebeIIion.
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Page 5 oI 30
Thal's lrue, and I vouId oinl oul lo you, lhal Marx argued lhal SociaIism vouId arise firsl in rilain,
reciseIy because il vas lhe mosl induslriaIised counlry. I'd aIso oinl oul lhal lhere is a big difference
belveen eoIe being issed off vilh lhe currenl silualion and rioling in lhe slreels, and acluaIIy
having a commilmenl lo buiIding some nev and rogressive in Iace of vhal lhey have knocked
dovn. Russia in 1917, an afler is a good examIe of reciseIy lhal facl.
The biggesl deveIomenls of lhe vorking cIass have coincided lo eriods of Long Wave oom, bolh in
lhe earIier 19lh Cenlury, bul mosl nolabIy in lhe Long Wave oom lhal ran from around 1890 lo 1914-
20.
y conlrasl, if ve Iook al lhe eriods of grealesl economic veakness such as lhe 1930's or 1980's, or
indeed during lhe Iirsl Greal Deression in lhe Iale 1870's, lhey are eriods of reaclion and
considerabIe veakness of lhe vorking cIass, as lheir economic and sociaI veighl deleriorales, lhe
economic comelilion belveen lhem rises, lhey become suscelibIe lo aII kinds of individuaIisl ideas,
elc.
I am nol al aII arguing lhal CailaIism viII go on forever, and as I oinled oul in facl I've vrillen in
lhe asl lhal I lhink lhe currenl silualion has many of lhe same characlerislics as lhe eriod from 1890
lo 1914, bul on a much Iarger scaIe il couId easiIy simIy bIov lhe vorId lo smilhereens Iong before il
coIIases due lo any lerminaI economic crisis.
Marx and IngeIs lhoughl lhal il vas going lo coIIase in 1848, and lhey Ialer said such a viev had been
ridicuIous, because in 1848, lhere vas onIy one counlry, rilain lhal had a vorking-cIass of any size.
Much of lheir viev earIier vas based on lhe facl lhal during much of lhal eriod rilain vas going
lhrough a Iong vave dovnlurn. Lenin made lhe same mislake vhen lhe nexl Long Wave dovnlurn
slarled.
Trolsky recognised lhal lhere vas absoIuleIy no reason lhal cailaIism in lhe 1930's couId nol recover
and exerience a nev eriod of grovlh, lhough he loo vas over infIuenced by vilnessing a Long
Wave dovnlurn, and nol having lhe benefil of seeing lhe osl var Long Wave oom.
ul, his successors did have lhal advanlage and fIunked il. The SlaIinisls lhroughoul lhe 1950's lried lo
cIaim lhal lhe Wesl vas reaIIy in a crisis, and lhal vorkers vere being imoverished, in simiIar lerms
lo lhose vho make lhe argumenl aboul a faIIing rale of rofil and cailaIisl crisis loday. They |usl
succeeded in making lhemseIves Iook ridicuIous and irreIevanl.
ul, many Trolskyisls adoled a simiIar osilion lhal lhe nexl big crisis vas |usl around lhe corner,
ebcause afler aII Lenin and Trolsky had cIaimed Iong ago lhal il vas in ils dealh agony. IronicaIIy,
some of lhem Iike MandeI, onIy acceled lhal il vasn'l, and slarled lo argue a version of Keynesian
underconsumlion lheory, and a crisis free cailaIism, |usl al lhe momenl vhen lhe Long Wave boom
vas coming lo an end, and a eriod of crises reaIIy vas aboul lo slarl!!!
Thnmas Wci 5ays:
}uIy 26, 2013 al 9:49 am + ReIy
.lhe facl lhal inleresl rales have been faIIing for lhe Iasl 30 years, is one of lhe cIearesl indicalions of lhe
exlenl lo vhich lhe rale of rofil gIobaIIy has been rising during aII lhal lime! This roves lhal lhe
generaI rale of rofil has decIined. Iven some bourgeois economisls nov cIaim lhal lhe equiIibrium rale
of inleresl, equaIing saving vilh inveslmenl, is nov beIov zero due lo overaccumuIalion. Due lo lhe Iov
rale of rofil zero inleresl rales of cenlraI banks are nol enough, in addilion, quanlilalive easing is
required.
BnIIy 5ays:
}uIy 26, 2013 al 10:11 am
According lo Marx il is high and rising rales of rofil lhal cause inleresl rales lo be Iov!!!
If ve observe lhe cycIes in vhich modern induslry moves slale of inaclivily, mounling revivaI,
roserily, over-roduclion, crisis, slagnalion, slale of inaclivily, elc., vhich faII beyond lhe scoe of
our anaIysis ve shaII find lhal a Iov rale of inleresl generaIIy corresonds lo eriods of roserily
or exlra rofil, a rise in inleresl searales roserily and ils reverse, and a maximum of inleresl u lo a
oinl of exlreme usury corresonds lo lhe eriod of crisis.|3j The summer of 1843 ushered in a eriod
of remarkabIe roserily, lhe rale of inleresl, sliII 4% in lhe sring of 1842, feII lo 2% in lhe sring
and summer of 1843,|4j in Selember il feII as Iov as 1% (GiIbarl, I, . 166), vhereuon il rose lo 8%
and higher during lhe crisis of 1847.
Thal is so, because lhe high rale and voIume of rofil means lhal CailaI can finance ilseIf vilhoul
resorl lo lhe money markels, and lo lhe exlenl lhal il does, il finds lhere avaiIabIe money hoards,
lhemseIves buiIl u as a resuIl of lhe high IeveIs of rofil! Irelly much a good descrilion of lhe
silualion ve have seen in lhe Iasl 30 years!
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Page 6 oI 30
The facl lhal lhese huge IeveIs of rofil have crealed a silualion in vhich nol aII of il couId be
immedialeIy invesled in roduclive aclivily is nol al aII an indicalion of a faIIing rale of rofil, bul blhe
very oosile. Il is exaclIy lhe same kind of silualion lhal IngeIs describes as arising from lhe
roserily and high rales of rofil of lhe Iale 1840's.
Al lhe cIose of 1842 lhe ressure vhich IngIish induslry suffered aImosl uninlerruledIy since 1837,
began lo Iifl. During lhe foIIoving lvo years foreign demand for IngIish manufaclured goods
increased sliII more, 1845 and 1846 marked a eriod of grealesl roserily. In 1843 lhe Oium War had
oened China lo IngIish commerce. The nev markel gave a nev imelus lo lhe furlher exansion of
an exanding induslry, arlicuIarIy lhe collon induslry. Hov can ve ever roduce loo much` We
have lo cIolhe 300 miIIion eoIe, a Manchesler manufaclurer said lo lhis vriler al lhe lime. ul aII
lhe nevIy erecled faclory buiIdings, sleam-engines, and sinning and veaving machines did nol
suffice lo absorb lhe surIus-vaIue ouring in from Lancashire. Wilh lhe same zeaI as vas shovn in
exanding roduclion, eoIe engaged in buiIding raiIvays. The lhirsl for secuIalion of
manufaclurers and merchanls al firsl found gralificalion in lhis fieId, and as earIy as in lhe summer of
1844. Slock vas fuIIy undervrillen, i.e., so far as lhere vas money lo cover lhe iniliaI aymenls.
In facl, again a very simiIar silualion lo lhal ve have seen over lhe Iasl 30 years.
I'm surrised al a Marxisl laIking aboul QI and officiaI inleresl rales as a means of oblaining Iov rales
of inleresl, because Marx is quile cIear lhal inleresl rales are delermined in lhe markel as a resuIl of lhe
demand and suIy for money-cailaI, nol money ilseIf. CenlraI anks can rinl money, bul lhey
cannol creale cailaI. Inleresl rales are Iov for lhe same reasons Marx and IngeIs describe above, huge
voIume of surIus vaIue roduced gIobaIIy lhal even vilh lhe massive amounls of accumuIalion lhal
have occurred, couId nol be fuIIy absorbed, vhich lhen ushed dovn inleresl rales, and Ied lo
secuIalion.
Thal is onIy lhe olher side of lhe reason lhal CenlraI anks have been abIe lo engage in huge amounls
of money rinling vilhoul causing hyer infIalion i.e. a massive increase in lhe voIume of
commodilies roduced and circuIaled lo absorb lhal money, and al massiveIy reduced vaIues
comared lo lhe asl.
Thnmas Wci 5ays:
}uIy 26, 2013 al 12:28 m
Do nol confuse rale of surIus vilh rale of rofil.
If lhe organic comosilion of cailaI (OCC) vouId have been Iov, lhe cailaIisls couId have exanded
slrongIy. ul due lo a high OCC surIus vaIue vas nol enough lo exand slrongIy. This creales an
abundance of rofils seeking inveslmenl oorlunilies vhich drives dovn rales of inleresl, foIIoved
by Iov officiaI rales of inleresl.
The cenlraI banks have nol been abIe lo rinl much money, lhey had lo.
BnIIy 5ays:
}uIy 26, 2013 al 6:00 m
ul, lhe rale of rofil has been high and rising for lhe Iasl 30 years as I have demonslraled here
hll://boffybIog.bIogsol.co.uk/2013/07/lhe-rales-of-rofil-inleresl-and_12.hlmI.
The OCC vas faIIing because of lhe revoIulion in roduclion, lhe massive rise in roduclivily, and lhe
shifl in roduclion and consumlion. Il vas comounded by lhe effecl of lhe increase in lhe rale of
lurnover of cailaI.
Thal is vhy vasl amounls of nev cailaI vas crealed lo eslabIish vasl nev economies in China and
eIsevhere, and vhy vhoIe nev induslries lhal did nol exisl 30 years ago in lhe deveIoed economy
have become loday's gianls. Il is vhy fixed cailaI formalion doubIed in lhe firsl decade of lhis
cenlury, and vhy lhe roduclion of use vaIues exIoded, and lheir vaIues vere sIashed lo such a
degree lhal slales vere forced lo massiveIy rinl money lo revenl lhal resuIling in a gIobaI defIalion.
The grovlh in rofils simiIar lo lhe silualion described by IngeIs vas such lhal even afler aII of lhis
huge exansion of cailaI, lhere vas sliII Iarge amounls of surIus vaIue Iefl over lo form gianl money
hoards.
BnIIy 5ays:
}uIy 25, 2013 al 12:17 m + ReIy
Irrala:
deending uon vhal consumers are reared lo ay for lhe roducl of lhal abslracl Iabour.
shouId obviousIy read lhal concrele Iabour.
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Page 7 oI 30
sartcsian 5ays:
}uIy 25, 2013 al 1:08 m + ReIy
}usl a vord:
Anolher examIe vouId be lransorl and communicalions. The Inlernel has reIaced vasl amounls o
conslanl cailaI reviousIy required lo communicale around lhe gIobe, and in some vays lhal is lrue of
lransorl of goods loo, because il can be used lo inslanlIy Iink logelher lransorl nelvorks so lhal goods
move over shorler dislances.
If you sludy exaclIy lhese induslries, lransorl and communicalions, lhe reIacemenl of conslanl cailaI by
more advanced conslanl cailaI, in lhis case lhe reIacemenl of fixed assels by more advanced fixed assels is
exaclIy vhal has driven lhe decIine in lhe lhe rale of rofil in lhese seclors.
We can Iook for examIe al lhe marilime freighl induslry, and in arlicuIar buIk carriers and conlainer-shis
(hardIy a buggy-vhi induslry), and ve can Iook al aImosl any facel of lhe communicalions/IT seclor
from semiconduclor fabricalion lo fiber olic nelvorks.
The move lo 300mm vafer roduclion in semiconduclor fabricalion drove lhe rale of rofilabiIily dovn in lhe
1990s. And al lhe end of lhal same decade il vas eslimaled lhal 97% of lhe fiber olic nelvorks in lhe US
vere dark.
SimiIarIy lhe exIosion of inveslmenl in nev deadveighl lonnage in lhe marilime induslry has crealed an
overhang lhal sliII deresses rofil in lhe induslry and vilh lhe deIivery of III cIass conlainer-shis is onIy
gelling vorse.
The lendency of lhe rale of rofil lo decIine is arl, arceI, roducl and roducer of lhe overroduclion of
cailaI of lhe means of roduclion as cailaI.
H. A. Cnx 5ays:
}uIy 25, 2013 al 2:04 m + ReIy
MichaeI,
This is lhe firsl bIog lhal resenl in a cIear vay vhal are lhe issues aboul Marx's lheory of cailaIisl
deveIomenl. I agree vilh 99.9% vilh vhal you say. There is one imorlanl queslion lhal I vouId Iike lo
address. You say:
The more lhe vorId's ouIalion is dravn inlo lhe cailaIisl mode of roduclion, lhe more lhe Iav exerls ils
over of rediclion. As lhe reserve army of Iabour gIobaIIy is used u in nev rounds of exIoilalion lo creale
more vaIue and surIus vaIue.
This seems lo imIy lhal lhe reserve army is lhe indeendenl variabIe and accumuIalion is lhe deendenl
variabIe. If lhere vas no lechnicaI change, lhen lhe sread of cailaIism couId sread lo absorb lhe vorId
reserve ouIalion, bul vilh lechnicaI change lhere is a decreasing demand for Iabor-Iabor is lhe deendenl
variabIe, deending uon lhe currenl lechnicaI comosilion. As cailaIisl accumuIalion lakes Iace, reIaliveIy
Iess Iabor is demanded because of lechnicaI change. When lechnicaI change reaches a oinl vhere lhe mass of
surIus vaIue exlraclabIe begins lo decIine, lhis viII haen Iong before cailaIism can absorb lhe vorId
ouIalion. Of course, cailaIism can conlinue lo sread lo olher arls of lhe vorId, bul lhis means a shifling
of lhe roduclive aaralus lo lhe Soulh and an increase in arasilism in lhe Norlh, somelhing }ohn Smilh
has oinled oul. ul lechnicaI change has been so svifl lhal even lhose soulhern counlries are beginning lo
vilness loo much roduclive caacily.
Viclor, a commenlalor on Sam WiIIiams bIog, gives a vonderfuI resenlalion on lhe OCC and ask lhe
queslion of vhal Iimils lhe effecl of lechnicaI change in lhe roduclion has on rise of OCC. You do nol
address lhis issue here, so I vouId be inleresled in your ansver.
IinaIIy, your arlicIe uls you in lhe cam lhal does nol see cailaIisl crises as |usl recurrenl, bul as recurrenl
on a decIining Iane. This is an inevilabIe deduclion from Marx's lheory of a rising TCC and OCC.
BnIIy 5ays:
}uIy 25, 2013 al 3:19 m + ReIy
The facl lhal rices for lransorl elc have faIIen is reciseIy vhal reduces lhe cosl of conslanl cailaI for lhose
firms and induslries for vhom lhese are inuls. The same is lrue of lhe massive faIIs in lhe cosls of
microrocessors elc.
sartcsian 5ays:
}uIy 25, 2013 al 4:19 m + ReIy
AbsoIuleIy lrue, vhich is vhy il is a lendency for lhe rale of rofil lo faII as lhe fixed assel comonenl
increases and nol an immediale occurrence.
And moreover, ve are laIking aboul lransorlalion and communicalion seclors as reresenlalive of cailaI
accumuIalion. There is a cycIe lo lhal accumuIalion, and lhe cycIe is driven by rofilabiIily.
We couId say lhal The facl lhal rices for lransorl elc have faIIen is reciseIy vhal reduces lhe cosl of
conslanl cailaI for lhose firms and induslries for vhom lhese are inuls. The same is lrue of lhe massive
faIIs in lhe cosls of microrocessors elc. for lhe lransorl and semiconduclor induslries lhemseIves.
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Page 8 oI 30
In facl ve do. Such inveslmenl reduces lheir unil cosls, vhich is vhy il rovides a iniliaI boosl lo
rofilabiIily. Al a cerlain oinl, as lhe means of roduclion accumuIale as exanded vaIue, lhal rale
decIines, because lhe reIalions belveen necessary and surIus Iabor on vhich everylhing deends
according lo Marx has changed and lhal change is no Ionger sufficienl. . .
BnIIy 5ays:
}uIy 25, 2013 al 5:46 m
According lo Marx lhe fixed cailaI comonenl decIines reIalive lo lhe circuIaling conslanl cailaI nol
vice versa. The circuIaling conslanl cailaI rises he says, because more efficienl fixed cailaI rocesses
more of il. He goes on lo say lhal increases in roduclivily reduce lhe vaIue of fixed cailaI, vhereas il
is more difficuIl lo quickIy reduce lhe vaIue of lhe circuIaling conslanl cailaI i.e. il lakes lime lo
eslabIish nev agricuIluraI roduclion elc.
This aIso exIains lhe silualion in resecl of lransorl more generaIIy, and indeed microrocessors.
SharIy rising rofils evenluaIIy encourage addilionaI inveslmenl in roduclion, vhich lhen lends
lovards overroduclion. Marx ciles in VoI III lhe effecls on foreign roducers of agricuIluraI roducls
in lhis resecl, vhich causes voIaliIily in lhese rices. The same lhing can be seen loday in reIalion lo
coer. Desile hugeIy higher rices and rofils for coer roducers, il look severaI years before lhey
used lheir increasing money hoards lo invesl in addilionaI roduclion.
The same lhing haens vilh microrocessor roduclion.
Hovever, il is, as Marx sels oul in discussing lhe inveslmenl in lhese kinds of addilionaI roduclion
sharIy rising rales and voIumes of rofils vhich bring lhis aboul nol a faIIing rale of rofil! Marx
oinls oul lhal collon rices rose sharIy reciseIy because of inveslmenl by lexliIe comanies in nev
machines lhal increased demand sharIy.
Il has been lhe massive increase in lhe roduclion of a vide range of lechnoIogies using
microrocessors lhal boosled lhe rofils of microrocessor roducers InleI recorded ils highesl
rofils ever in 2Q of 2008, for examIe vhich lhen caused a big increase in roduclion.
The facl lhal lhese lyes of induslries are suscelibIe lo svings in lheir roduclion, vhich resuIl in
aIlernaling eriods of overroduclion and shorlage is nolhing nev.
In facl ve do. Such inveslmenl reduces lheir unil cosls, vhich is vhy il rovides a iniliaI boosl lo
rofilabiIily. Al a cerlain oinl, as lhe means of roduclion accumuIale as exanded vaIue, lhal rale
decIines, because lhe reIalions belveen necessary and surIus Iabor on vhich everylhing deends
according lo Marx has changed and lhal change is no Ionger sufficienl. . .
I vouIdn'l disagree vilh lhal. Hovever, I vouId argue lhal lhis rocess of reducing lhe vaIue of
cailaI roceeded from lhe 1980's unliI recenlIy, and lhereby increased lhe rale and voIume of rofil. Il
is reciseIy my lhesis lhal lhis eriod has nov come lo an end, and lhe rale of rofil is IikeIy lo faII
from here, because faIIing roduclivily viII mean more cailaI has lo be emIoyed lo oblain lhe same
amounl of rofil.
The difference is I don'l see any reason vhy lhal causes a crisis in lhe near fulure, in lhe asl lhis arl
of lhe Iong vave conlinues lo be a boom for anolher 12-15 years, or lhal vhen lhal lurns lo a dovn
hase lhal seIIs lhe end of CailaIism any more lhan such eriods have in lhe asl.
CailaIism viII recover from such a eriod as il did severaI limes in lhe 19lh and 20lh cenluries, and
robabIy on lhe basis of even more overfuI forces lhan ve can comrehend loday, |usl as lhe currenl
boom has been based on forces lhal couId nol have been comrehended 50 years ago.
Il viII nol coIIase from ils ovn conlradiclions lhough il mighl end in barbarism if il is Ied inlo
anolher gIobaI var sociaIisls have lo end il, and lhal invoIves buiIding a sociaIisl aIlernalive lo il
nov, in lhe vay HaI Draer suggesls in The Tvo SouIs of SociaIism.
sartcsian 5ays:
}uIy 25, 2013 al 7:02 m
Again absoIuleIy lrue. CircuIaling cailaI increases because lhe fixed cailaI onIy gives u ils vaIue
incremenlaIIy and onIy comIeles lhal lransfer vhen ils use vaIue is exlinguished. Or.. lo ul il
anolher vay, lhe oinl of cailaI is lo lurn an exanding mass of accumuIaled vaIues in lhe means of
roduclion inlo even a grealer mass of commodilies.
I lhink lhal cailaI has lruIy vorked al reducing lhe vaIue of cailaI lhrough Ieveraged buy ouls,
Iiquidalions, lechnicaI advance. I don'l lhink il has nearIy been successfuI enough, vhich makes me
shudder a bil lo lhink aboul vhal is ahead of us.
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Page 9 oI 30
I aIso agree crisis does nol mean cailaI is going lo coIIase under ils ovn veighl, or disaear. I
cerlainIy don'l lhink lhal such crisis-mongering is inherenl in agreeing lhal lhe rale of rofil has a
lendency lo decIine.
Iirsl, crisis ilseIf is one of lhose offselling lendencies lo lhe decIine in lhe rale of rofil. SecondIy,
lhere is no lhreshoId rale of rofil beIov vhich cailaI simIy cannol exisl as il can find some
means lo alleml lo counler lhal IeveI. Al lhe same lime, lhere is (aImosl) no decIine in lhe rale of
rofil lhal any cailaIisl/aII cailaIisls can ignore.
If lhe Iav of vaIue is nolhing olher bul lhe sociaI reIalions belveen cIasses, vhen Iabor is organized as
vage-Iabor, lhen lhe faII in lhe rale of rofil becomes nolhing bul lhe Iav lhe lendency lo increased
cIass slruggIe. The bourgeoisie can vin lhal slruggIe, and suress vorkers (as lhey have done relly
effecliveIy over lhe years), bul lhey can'l ignore lhe slruggIe.
Il doesn'l die. Il has lo be kiIIed.
BnIIy 5ays:
}uIy 26, 2013 al 9:50 am
Again absoIuleIy lrue. CircuIaling cailaI increases because lhe fixed cailaI onIy gives u ils vaIue
incremenlaIIy and onIy comIeles lhal lransfer vhen ils use vaIue is exlinguished.
No, lhal is nol vhy circuIaling cailaI increases reIalive lo fixed cailaI. Marx says il occurs because 1
never more efficienl machine aIvays reIaces severaI oIder machines. The one never machine aIvays
rocesses more maleriaI lhan lhe severaI oIder machines. So, hysicaIIy circuIaling conslanl cailaI
increases reIalive lo fixed cailaI.
ul, furlhermore, ils nol onIy science and lechnoIogy lhal bring aboul in some eriods Iike lhe Iasl,
very raid deveIomenl in lhe efficiency of lhese machines, lhal brings aboul raid moraI
derecialion of lhe cailaI, lhe same rocesses revoIulionise lhe roduclion of lhe machines
lhemseIves, so lhal lheir roduclion cosls faII. Marx says lhal haens in reIalion lo lhe fixed cailaI far
more lhan vilh lhe circuIaling cailaI.
In VoIume II of CailaI, discussing lhe circuIalion of cailaI, Marx describes lhree causes of crises each
arlicuIar lo lhe lhree slages of ils circuil. The firsl is in reIalion lo lhe inabiIily lo converl money-
cailaI inlo roduclive cailaI due lo lhe absence of some arl of lhe roduclive cailaI. In VoIume III
discussing lhe effecls of Irice IIuclualions, Marx examines lhal furlher.
Raid imrovemenl in machinery broughl aboul a raid increase in demand for collon from lhe US. Il
caused collon rices lo rise, and indeed collon shorlages, because lhe suIy of maleriaIs cannol
resond quickIy in lhe same vay lhal induslriaI roduclion can. To lhe exlenl lhal collon vas nol
avaiIabIe al aII, a robIem lhal Marx describes in reIalion lo lhe silualion during lhe CiviI War as The
Grealesl IxamIe of an Inlerrulion in lhe Iroduclion Irocess lhrough Scarcily and Dearness of Rav
MaleriaI, (so much for lhe IaIIing Rale of Irofil eing lhe ONLY cause of crises!)il is ilseIf a cause of
crisis, because vilhoul maleriaI, lhe olher eIemenls of roduclive cailaI cannol be ul lo vork, lhe
circuil of cailaI is broken, causing il lo break dovn al ils olher slages loo, as sel oul in VoIume II.
CailaI soughl lo Iocale olher sources of collon using Indian collon inslead. ul, as Marx aIso describes
lhe high rice of maleriaI can ilseIf be a cause of crisis even vhen il is avaiIabIe in sufficienl quanlilies.
ecause ils vaIue is assed on lo lhe end commodily, high rices of maleriaI cause high rices of lhe
end commodily. Marx describes hov lhese high rices lhen choke off demand. ul, cailaI reIies on
high IeveIs of demand so lhal lhe vaIue of fixed cailaI can be recovered in il al miniscuIe IeveIs.
If demand dros, eilher cailaI has lo Iover rices lo mainlain demand al high IeveI so lhal il can
recover lhe vaIu of fixed cailaI vilhin il, or eIse il culs back roduclion, vhich means lhe ro rala
roorlion of vear and lear rises, lhereby ushing rices even higher, or il aIIovs fixed cailaI lo sland
idIe, lhereby imosing a differenl kind of cosl.
Thal, of course, is lhe lhird kind of cause of crisis he discusses in VoIume II, lhe inabiIily lo converl
commodily-cailaI inlo money-cailaI. And, of course lhal has nolhing lo do vilh a faIIing rale of
rofil or underconsumlion eilher. In facl, lhe reason he describes for lhe increase in inveslmenl
bringing aboul lhe higher maleriaI rices, is lhe exacl oosile, a eriod of roserily and high and
rising rales of rofil.
In facl, very simiIar condilions lhal have aIied over lhe 13-15 years, vhich broughl aboul a Iarge
increase in lhe rale and mass of rofil, and vhich acceIeraled lhe rocess of lhe revious 15 years vhen
lhe rale of rofil vas aIso rising.
BnIIy 5ays:
}uIy 26, 2013 al 10:22 am
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Page 10 oI 30
If lhe Iav of vaIue is nolhing olher bul lhe sociaI reIalions belveen cIasses, vhen Iabor is organized as
vage-Iabor, lhen lhe faII in lhe rale of rofil becomes nolhing bul lhe Iav lhe lendency lo increased
cIass slruggIe.
According lo IngeIs, of course, lhe Marxian Lav of VaIue onIy oeraled from around 7,000 .C. lo lhe
15lh Cenlury, i.e. lhe eriod vhen commodilies exchanged al lheir vaIue.
sartcsian 5ays:
}uIy 26, 2013 al 2:58 m + ReIy
And I lhink IngeIs is vrong. The Iav of vaIue is nol oeraling from around 7000 C. Hov can lhe Iav of
vaIue be oeraling vhen Iabor is nol organized as abslracl Iabor` When in facl, as Marx oinls oul, even a
genius of lhe slalure of ArislolIe cannol lease oul lhe lhreads of vhal lruIy delermines exchange vaIue`
Yes, IngeIs argues lhal vay, and in so doing he comIeleIy undermines lhe hisloricaI secificily, and
Iimilalions, of cailaI and cailaIism, and lhe recision of Marx's crilique as a)an immanenl crilique of
cailaI and b) Ieading lo lhe necessily for lhe overlhrov, lhe aboIilion, of cailaIism.
Chnppa Mnrph 5ays:
}uIy 26, 2013 al 3:18 m
CarefuI here. IngeIs is referring lo commodily roduclion and exchange vhich vere in rogress vilh
markels and searale roducers elc among lhe Mesoolamians and Igylians. The scoe vas IocaI bul
rices vere delermined by lhe Iav of vaIue. Nol as crushingIy as in cailaIisl sociely, of course, bul in
lhe sense of an imersonaIIy reached vaIue equivaIence of lhe Iabour inul by lhe commodily
roducers decided in lhe markel. This vas simIe exchange among immediale roducers, nol much
free Iabour invoIved, bul lhe imorlanl firsl chalers of lhe Conlribulion lo lhe Crilique and of
CailaI make il cIear lhal lhis vas indeed lhe case.
Il vasn'l IngeIs arbilrariIy rocIaiming lhis againsl Marx, il vas a viev shared by bolh as economisls
and hislorians.
sartcsian 5ays:
}uIy 26, 2013 al 3:43 m
If demand dros, eilher cailaI has lo Iover rices lo mainlain demand al high IeveI so lhal il can
recover lhe vaIu of fixed cailaI vilhin il, or eIse il culs back roduclion, vhich means lhe ro rala
roorlion of vear and lear rises, lhereby ushing rices even higher, or il aIIovs fixed cailaI lo sland
idIe, lhereby imosing a differenl kind of cosl.
The above slalemenl conlains severaI robIems lhal I lhink undercul ils argumenl. Iirsl and foremosl,
if roduclion is cul back, lhere can be no ro-rale roorlion increase of vear and lear. Such a
concelion acluaIIy vioIales Marx's concelion/anaIysis of fixed cailaI as cailaI lhal can onIy lransfer
ils vaIue incremenlaIIy over lime lo lhe mass of commodilies, and onIy by incremenlaIIy exlinguishing
ils use vaIue. No roduclion, no vear and lear, no increased incremenl of vaIue lo be recovered
lhoughl lhe increased incremenls of lhe consumed use vaIue. No recovery of lhe sunk inveslmenl.
In addilion lhe slalemenl argues lhal or il |cailaI, cailaIislj aIIovs fixed cailaI lo sland idIe,
lhereby imosing a differenl kind of cosl. This osils a seIf-conlradiclory dislinclion belveen culling
back roduclion and aIIoving fixed cailaI lo sland idIe. The culling back of roduclion and
aIIoving fixed cailaI lo sland idIe are aImosl by definilion, and cerlainIy by cailaIisl reaIily, lhe same
lhing.
The bourgeoisie lry lo offsel lhal idenlily for examIe sIov sleaming in lhe marilime freighl
induslry bul sliII lhal invoIves essenliaIIy reducing TOWARDS idIe arl of lhe accumuIaled fixed
cailaI, by increasing lhe lurnover lime of lhe rocess by vhich lhe vaIue of fixed cailaI is lransferred
inlo lhe roducl or service markeled.
You can Iay u 10% of your fIeel, increase lhe % of fIeel going lo break-u, and you can sIov sleam
around lhe caes of Good Horn and Hoe, avoiding lhe fees of lhe Ianama and Suez CanaIs,( accruing
some benefil TW of Iover fueI consumlion). AII are same-same as ve used lo say back in lhe day.
Iarl of lhe robIem vilh offy's formuIalion here, and in his cIaim lhal lhe cause of circuIaling cailaI
oulslriing fixed cailaI is because 1 machine reIaces many, ralher lhan lhe comuIsion lo converl
vaIue accumuIaled as lhe means of roduclion inlo vaIue as commodilies, is lhal offy is nol vieving
lhe fixed cailaI as accumuIaled vaIue.
Whal has occurred vilh overaII exansion of cailaIS, IuraI, is lhal lhe mass of lhe mean of
roduclion,. nol simIy as lhings Iike deadveighl lonnage, or Iocomolive horseover, increases bul
ALSO lhal lhe vaIue mass of lhe means of roduclion increases. Afler aII cailaI IS lhe means of
roduclion organized as rivale roerly, as vaIue, vhich requires exansion lhrough engagemenl
vilh vaIue-roducing vage-Iabor.
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Page 11 oI 30
ConsequenlIy cailaI's exanded reroduclion requires exaclIy lhal, converling lhe aIready exisling
mass of exanded vaIue embodied in lhe means of roduclion inlo an ever grealer vaIue mass of
commodilies.
sartcsian 5ays:
}uIy 26, 2013 al 4:06 m
Iirsl I need lo correcl a mislake I made cerlainIy is lhe case lhal says oeraling fixed assels al a
reduced rale cannol increase lhe cosls of roduclion. CerlainIy il can. Oeraling a Iocomolive al a
seed of 10 mh cerlainIy does increase lhe cosls of roduclion. More lime is invoIved in roviding lhe
unil cosl or service. Oeraling al lhe reduced rale can even increase vear and lear on Iocomolives lhal
are designed lo oerale al maximum efficiency al higher seeds. Hovever, recovering lhose higher
cosls is very, very robIemalic.. as again, using lhe examIe of marilime freighl, lhe sIov sleaming
slralegies elc. cannol effecliveIy revenl lhe decIine in daiIy hire rales for conlainershis, buIk carriers,
and lankers.
The vhoIe oinl lo idIing fixed cailaI, or sIoving il dovn, are lhal ils oeraling cosls cannol be
recovered, Ieading lo assel devaIualion.
So consequenlIy, ve see in lhe semi-conduclor induslry lhe shullering of lhe 200mm vafer roduclion
Iines, and lhe running of lhe 300mm Iines relly excIusiveIy.
We see in raiIroad induslry, lhe Iargesl CIass 1s reliring or scraing or seIIing off lo smaIIer CIass 2
and CIass 3, oIder Iocomolives vilh HIGHIR nol Iover oeraling cosls. The smaIIer raiIroads, vilh
smaIIer lolaI fixed cosls and usuaIIy Iover Iabor cosls can make beller use of lhe Iocomolives vilh
lhe higher unil cosls of oeralion.
Nov as regards Igyl elc. lhal commodilies exchange, and lhal every merchanl is oul lo buy Iov and
seII high is much differenl lhan a sociely lhal reroduces ilseIf lhrough a rocess vhere commodilies
exchange al vaIues delermined by lhe sociaI lime necessary for lhe reroduclion of lhe commodilies.
I find il slarlIing, a bil, lhal Marxisls can argue lhal lhe Iav of vaIue governs socielies vhere: 1) lhe
sociely is organized around and dominaled by roduclion for SUSISTINCI 2) vhere exchange is lhe
exchange of surIus IRODUCT, and nol of roducls roduced as/for/by Iabor ilseIf organized as a
vaIue.
BnIIy 5ays:
}uIy 26, 2013 al 6:06 m
I lhink IngeIs is vrong loo, or lo be more accurale he is laIking aboul lhe Lav of VaIue in a reslricled
sense.
Marx makes cIear, for examIe, in his Leller lo KugeImann
hll://vvv.marxisls.org/archive/marx/vorks/1868/Iellers/68_07_11.hlm lhal lhe Lav of VaIue exisls
lhrough aII socielies, and onIy ils form changes,
NaluraI Iavs cannol be aboIished al aII. The onIy lhing lhal can change, under hisloricaIIy differing
condilions, is lhe form in vhich lhose Iavs asserl lhemseIves. And lhe form in vhich lhis roorlionaI
dislribulion of Iabour asserls ilseIf in a slale of sociely in vhich lhe inlerconneclion of sociaI Iabour
exresses ilseIf as lhe rivale exchange of lhe individuaI roducls of Iabour, is reciseIy lhe exchange
vaIue of lhese roducls.
The Iav of VaIue is nolhing more lhan lhe Iav lhal lhe vaIue of lhings is delermined by lhe Iabour
required for lheir roduclion, and as Marx makes cIear in lhis Ieller in every sociely lhings have lo be
roduced, and Iabour-lime has lo be aIIocaled for lhal urose. The onIy lhing lhal changes is lhe
melhod by vhich lhal aIIocalion occurs.
In VoIume I, Chaler 1, Marx makes cIear lhal il is nol |usl commodilies lhal ossess vaIues, every use
vaIue roduced by Iabour has vaIue. Thal is vhy he sels oul lhe vay Robinson Crusoe on his isIand in
his aclions of measuring lhe lime laken lo roduce lhe various lhings he needs rovides everylhing
lhal needs lo be underslood aboul VaIue.
BnIIy 5ays:
}uIy 26, 2013 al 6:11 m
The scoe vas IocaI bul rices vere delermined by lhe Iav of vaIue. Nol as crushingIy as in cailaIisl
sociely, of course, bul in lhe sense of an imersonaIIy reached vaIue equivaIence of lhe Iabour inul by
lhe commodily roducers decided in lhe markel.
I lhink IngeIs' oinl is lhal by lhe 15lh Cenlury, lhe rices of commodilies vas NOT being delermined
by lhe Lav of VaIue, in lhe sense lhal lhey exchanged al lheir Ixchange VaIues! His vhoIe oinl here
is lo oinl oul lhal lhe lransformalion of Ixchange VaIues inlo rices vas a very Iong dravn oul
hisloricaI rocess, and as soon as cailaI begins lo invade some area of roduclion, Ixchange VaIues
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Page 12 oI 30
are reIaced by Irices of roduclion. Moreover, because lhe oulul rices of lhese cailaIisl roducers
are al lhe same lime lhe inul rices of olher roducers, incIuding non-cailaIisl roducers, lhose
rices of roduclion become lhe cosl rices of lhose olher roducers, so aulomalicaIIy, even for non-
cailaIisl roducers, lheir ovn oulul rices are no Ionger Ixchange VaIues in lhe ure sense.
BnIIy 5ays:
}uIy 26, 2013 al 6:30 m
The above slalemenl conlains severaI robIems lhal I lhink undercul ils argumenl. Iirsl and foremosl,
if roduclion is cul back, lhere can be no ro-rale roorlion increase of vear and lear. Such a
concelion acluaIIy vioIales Marx's concelion/anaIysis of fixed cailaI as cailaI lhal can onIy lransfer
ils vaIue incremenlaIIy over lime lo lhe mass of commodilies, and onIy by incremenlaIIy exlinguishing
ils use vaIue. No roduclion, no vear and lear, no increased incremenl of vaIue lo be recovered
lhoughl lhe increased incremenls of lhe consumed use vaIue. No recovery of lhe sunk inveslmenl.
The argumenl is nol my argumenl il is a summary of vhal Marx himseIf says! IirslIy, vear and lear is
never roorlionaI lo use. SecondIy, lhere is lhe queslion of moraI derecialion. ul, in addilion, if
machinery elc. simIy slands idIe because roduclion has been cul back, il aIso suffers hysicaI
derecialion.
The culling back of roduclion and aIIoving fixed cailaI lo sland idIe are aImosl by definilion, and
cerlainIy by cailaIisl reaIily, lhe same lhing.
I vouIdn'l arlicuIarIy disagree, bul again I'm summarising Marx, vho vriles,
This shovs again hov a rise in lhe rice of rav maleriaI can curlaiI or arresl lhe enlire rocess of
reroduclion if lhe rice reaIised by lhe saIe of lhe commodilies shouId nol suffice lo reIace aII lhe
eIemenls of lhese commodilies. Or, il may make il imossibIe lo conlinue lhe rocess on lhe scaIe
required by ils lechnicaI basis, so lhal onIy a arl of lhe machinery viII remain in oeralion, or aII lhe
machinery viII vork for onIy a fraclion of lhe usuaI lime.
And again il is nol my argumenl lhal fixed cailaI oulslris circuIaling conslanl cailaI, bul Marx's!
Iurlher, lhe quanlily and vaIue of lhe emIoyed machinery grovs vilh lhe deveIomenl of Iabour
roduclivily bul nol in lhe same roorlion as lhis roduclivily, i. e., nol in lhe roorlion in vhich
lhis machinery increases ils oulul. In lhose branches of induslry, lherefore, vhich do consume rav
maleriaIs, i. e., in vhich lhe sub|ecl of Iabour is ilseIf a roducl of revious Iabour, lhe groving
roduclivily of Iabour is exressed reciseIy in lhe roorlion in vhich a Iarger quanlily of rav
maleriaI absorbs a definile quanlily of Iabour, hence in lhe increasing amounl of rav maleriaI
converled in, say, one hour inlo roducls, or rocessed inlo commodilies. The vaIue of rav maleriaI,
lherefore, forms an ever-groving comonenl of lhe vaIue of lhe commodily-roducl in roorlion lo
lhe deveIomenl of lhe roduclivily of Iabour, nol onIy because il asses vhoIIy inlo lhis Ialler vaIue,
bul aIso because in every aIiquol arl of lhe aggregale roducl lhe orlion reresenling derecialion of
machinery and lhe orlion formed by lhe nevIy added Iabour bolh conlinuaIIy decrease. Oving lo
lhis faIIing lendency, lhe olher orlion of lhe vaIue reresenling rav maleriaI increases roorlionaIIy,
unIess lhis increase is counlerbaIanced by a roorlionale decrease in lhe vaIue of lhe rav maleriaI
arising from lhe groving roduclivily of lhe Iabour emIoyed in ils ovn roduclion.
And, as Marx oinls oul, lhere are indeed eriods in vhich lhal reduclion in rav maleriaI rices
occurs, bul generaIIy il lakes Ionger and is nol on lhe same scaIe as lhe decrease in lhe rorlion
allribulabIe lo fixed cailaI.
BnIIy 5ays:
}uIy 26, 2013 al 6:35 m
I find il slarlIing, a bil, lhal Marxisls can argue lhal lhe Iav of vaIue governs socielies vhere: 1) lhe
sociely is organized around and dominaled by roduclion for SUSISTINCI 2) vhere exchange is lhe
exchange of surIus IRODUCT, and nol of roducls roduced as/for/by Iabor ilseIf organized as a
vaIue.
Yel, in CailaI I, Chaler 1, vhere Marx describes lhe aclions of Robinson Crusoe in measuring lhe
lime he lakes lo roduce his needs, as being everylhing lhal is needed lo knov lo undersland VaIue,
does reciseIy lhal. Indeed, having done so, he goes on lo exIain lhal lhose reIalions, as vilh lhose of
lhe rimilive commune, or of lhe easanl househoId aIIocaling ils avaiIabIe Iabour-lime, exose lhe
lrue reIalions of vaIue lhal commodily roduclion and exchange obscure!
BnIIy 5ays:
}uIy 26, 2013 al 6:44 m
Irrala:
And again il is nol my argumenl lhal fixed cailaI oulslris circuIaling conslanl cailaI, bul Marx's!
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Page 13 oI 30
ShouId read,
And again ils nol my argumenl lhal lhe reIalive reduclion of fixed cailaI oulslris.
Chnppa Mnrph 5ays:
}uIy 26, 2013 al 11:05 m
I'm afraid offy is loo deIirious and rhasodic in his aroach for me lo vanl lo go inlo any kind of
lheorelicaI cIinch righl nov. He chucks a handfuI of Marxoid gobbels inlo a mixer and sIodges lhe
resuIl on a Iaslic labIe-cIolh.
Sarlorius hovever says somelhing in reIalion lo IngeIs and lhe Lav of VaIue lhal needs a commenl:
I find il slarlIing, a bil, lhal Marxisls can argue lhal lhe Iav of vaIue governs socielies vhere: 1) lhe
sociely is organized around and dominaled by roduclion for SUSISTINCI 2) vhere exchange is lhe
exchange of surIus IRODUCT, and nol of roducls roduced as/for/by Iabor ilseIf organized as a
vaIue.
The oinl is nol lhal lhe Iav of vaIue governs lhese socielies. He needs lo rovide chaler and verse lo
shov lhe IngeIs or Marx lhoughl lhis vas lhe case. The Iav of vaIue delermined lhe quanlilies in
vhich commodilies vere exchanged vilhin lhe |urisdiclion so lo say of lheir markel. In olher vords
lheir rices (offy is off lhe raiIs here, of course, as lhe exchange vaIue of any commodily in any
commodily-roducing and exchanging enlily (grou, lribe, federalion, viIIage, regionaI communily,
cily, vhalever) is exressed in ils rice in lhe markel, vhelher lhal rice is exressed barler-Iike in
some olher arbilrary commodilies, or in more deveIoed form in some equivaIenl lending lovards lhe
universaI equivaIenl, money.)
The Lav of VaIue begins lo delermine lhe socio-economic behaviour of vhoIe socielies vhen lhese
become cailaIisl ralher lhan feudaI, and vhen a free cIass of vage-earning Iabourers makes ils
aearance.
The Grundrisse discusses lhe generaI movemenl of lhis rocess in lhe seclion on re-cailaIisl
economic formalions. Commodily-roducing sociaI enlilies exisled vilhin and aIongside re-cailaIisl
modes of roduclion vilhoul forming vhoIe socielies. And of course even lhough lhe Lav of VaIue
oeraled lo delermine lhe rices al vhich commodilies vere exchanged, il vas obviousIy dislorled by
oIilicaI ressures and vioIence from lhe ruIing cIasses lhey vanled lheir unearned cul of lhe vaIue
roduced by lhe Iiving Iabour of lhe commodily roducers. In our days lhis dislorlion is caused by lhe
oIilicaI and sociaI forces of imeriaIism, back lhen il vas caused by lhe coercive forces of sIave-
ovners or feudaI Iords.
H. A. Cnx 5ays:
}uIy 25, 2013 al 3:20 m + ReIy
Sorry, Viclor asks lhe queslion of vhy lhe OCC vouId have lo rise vhen lechnicaI change lakes Iace in lhe
roduclion of conslanl cailaI on lhe lcc and occ.
A!an Frccman 5ays:
}uIy 25, 2013 al 10:30 m + ReIy
Thanks lo MichaeI for draving readers' allenlion lo severaI resonses lo Heinrich incIuding our ovn. We
dissecl al crilicaI fIav in Heinrich's case, his misunderslanding of vhal lhe Iav of lhe lendenliaI faII in lhe
rofil rale (LTRII) reaIIy is: Heinrich's . beIief lhal il is meanl lo redicl vhal musl inevilabIy haen
ralher lhan lo exIain vhal does haenis lhe source of his charge lhal il is unroved. As ve oinl oul,
lhe Iav is nol a rediclion of vhal musl inevilabIy haen, bul an exIanalion of vhal does haen, il
exIains vhy lhe rale of rofil does lend lo faII in lhe Iong run. y demanding a roof of inevilabiIily,
Heinrich makes a scienlificaIIy unaccelabIe demand: lhal Marx shouId rovide a roof of a faIse slalemenl.
Il is unforlunale lherefore lhal MichaeI defends lhe Iav in such a vay lhal, vere his defence acceled,
Heinrich's charges againsl il vouId have lo be acknovIedged as lrue.
Today, as in Marx's day, lhe rale of rofil in lhe US has indeed been faIIing for some considerabIe lime (see
my Whal Makes lhe US Irofil Rale IaII, Andrev KIiman's Iersislenl IaII in IrofilabiIily UnderIying lhe
Iresenl Crisis, my recenl Irofil Rale in lhe Iresence of IinanciaI Markels and aIso lhe DeIoille Shifl Index
lhanks lo Gavin MendeI-GIeason and ruce WaIIace for draving allenlion lo lhis under-reorled evidence.
Roberl renner's ainslaking vork aIso deserves menlion)
The reaI faiIure of Marx's oonenls is lhal lhey cannol exIain vhy lhis is haening. Mainslream
economics cerlainIy can'l. ul nor can lhe 'Marxisls vilhoul Marx' as I exIained al Marxism 2013
(hll://vvv.youlube.com/valch`vS}ZkmlIqeY). Their lheory redicls lhe rale of rofil musl inevilabIy
rise vilh lechnoIogicaI change. No vonder Marx's delraclors vrongIy accuse him of asserling lhe diamelric
oosile, lhal lhe rofil rale musl inevilabIy faII.
The evidence of Marx's ovn vork shovs he enlerlained no such simIislic viev. }usl as lhe Iav of gravily
exIains vhy ob|ecls faII lo lhe ground vhen lhey do, so lhe LTRII exIains vhy lhe rofil rale faIIs over
Iong eriods vhen il does. Il concerns causes nol rediclions. The cause of lhe faII is cailaIism. Thal is vhy
as MichaeI vriles cailaIism is nol an elernaI economic syslem lhal can Iasl forever bul is a lransilory mode
of roduclion
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Page 14 oI 30
This insighl is fundamenlaIIy undermined if ve converl il inlo a falaIislic Iav as I lry lo exIain in Iosilivisl
Marxism. MichaeI endorses MiIIer's viev lhal If lhe rale of rofil has nol yel faIIen, or ils direclion is nol yel
definileIy demonslraled, nonelheIess il musl inevilabIy faII evenluaIIy. The rale of rofil musl faII in Iife or
lhe lheory is incorrecl. The Iav is unidireclionaI and irreversibIe.
This is simIy faIse. The Iav is nol unidireclionaI, and il is nol irreversibIe. Al definile limes in hislory, lhe faII
in lhe rale of rofil has been seclacuIarIy reversed for examIe belveen 1942 and 1947 in lhe USA. Il
deends on vhal lhe cailaIisls do, |usl as lhe Iav of gravily deends on vhal eIse is going on.
MichaeI aears sIighlIy schizohrenic. On lhe bIog I referred lo, he re|ecls my case lhal lhe rale of rofil
shouId incIude financiaI assels in lhe denominalor. ul in lhal case, he cannol ossibIy cIaim lhal lhe rale of
rofil in lhe UK musl inevilabIy faII, since on his ovn measure of il, lhis rale has risen syslemalicaIIy since
1974.
Marxism needs lo ass beyond lhe endeavour lo reduce a generaI sociaI Iav lo a malhemalicaI formuIa. The
conlradiclions of cailaIism are vorked oul on lhe slreels, nol in lhe cIassroom.
H. A. Cnx 5ays:
}uIy 26, 2013 al 1:01 m + ReIy
AIan Ireeman makes lhree crilicisms aboul MichaeI Roberls crilique of Heinrich. MichaeI hoIds lhe viev
lhal lhe rale of rofil musl inevilabIy faII, lhal il is vrong lo argue lhal Marx heId such a viev, and lhal
MichaeI Roberls ovn slalislics can be shovn lhal lhe rale of rofil in Greal rilain do nol verify lhe faIIing
lhe rale of rofil.
(1)' The evidence of Marx's ovn vork shovs he enlerlained no such simIislic viev. }usl as lhe Iav of
gravily exIains vhy ob|ecls faII lo lhe ground vhen lhey do, so lhe LTRII exIains vhy lhe rofil rale
faIIs over Iong eriods vhen il does. Il concerns causes nol rediclions. The cause of lhe faII is cailaIism.
Thal is vhy as MichaeI vriles cailaIism is nol an elernaI economic syslem lhal can Iasl forever bul is a
lransilory mode of roduclion
This insighl is fundamenlaIIy undermined if ve converl il inlo a falaIislic Iav as I lry lo exIain in
Iosilivisl Marxism. MichaeI endorses MiIIer's viev lhal If lhe rale of rofil has nol yel faIIen, or ils
direclion is nol yel definileIy demonslraled, nonelheIess il musl inevilabIy faII evenluaIIy. The rale of
rofil musl faII in Iife or lhe lheory is incorrecl. The Iav is unidireclionaI and irreversibIe.
This is simIy faIse. The Iav is nol unidireclionaI, and il is nol irreversibIe. Al definile limes in hislory, lhe
faII in lhe rale of rofil has been seclacuIarIy reversed for examIe belveen 1942 and 1947 in lhe USA.
Il deends on vhal lhe cailaIisls do, |usl as lhe Iav of gravily deends on vhal eIse is going on.'
The cause of lhe faII is cailaIism. Wov, lhal is a very usefuI exIanalion for lhe faII of lhe rale of rofil`
So Iel us be a IillIe more secific. Iroduclive cailaI lends lo increase lhe roduclivily of Iabor lhrough
lechnicaI change. This resuIls in rise of lhe lecnicaI and organic comosilions of cailaI. This means lhal
Iabor is being rendered reIaliveIy Iess essenliaI lo lhe roduclion rocess of commodilies-be lhey means of
roduclion or consumer goods. If lhe vaIue of Iabor over is heId conslanl, lhis means lhal lhe rale of
rofil inevilabIy faIIs. If you Iover lhe vaIue of Iabor over by increasing lhe rale of exIoilalion by
cheaening vage goods, you aIso raise lhe OCC in lhe vage good induslry by doing so. Ior lhe given
cailaI, vilh lhis lechnicaI change, you vouId have a decIine in lhe rale and mass of rofil, unIess you
acceIerale accumuIalion, vhich viII mean lhal lhe mass of rofil viII grov, bul lhe rale viII decIine.
(Again, ve are laIking aboul vhal haens lo roduclive Iabor).This means lhal lechnoIogicaI change
forces cailaI lo acceIerale accumuIalion in order lo reserve lhe exisling cailaI. The faII in lhe rale of
rofil forces individuaI cailaIisl enlilies lo increase lhe roduclivily of Iabor and lhis raises lhe OCC and
forces cailaIism lo acceIerale accumuIalion even fasler. CycIicaI crises are generaled because lhe
lechnoIogicaI Iaggards need lo dum lheir commodilies lo reserve vhal IillIe cailaI lhey can and lhese
crises are cycIicaI because of lhe decIine in demand for lechnoIogy changing goods decIine-roduclive
caacily viII be under uliIized, hence lhe dovnvard siraI unliI enough cailaI is vied oul. And lhen
lhe shil slarls aII over again, bul vilh a higher OCC and TCC. As lhe TCC and OCC become higher,
acceIraled accumuIalion becomes more difficuIl because lhere viII nol be sufficienl sv lo be abIe lo
vaIorize lhe exisling cailaI. This rocess is unidireclionaI unIess you have a var-such as WWII and
deslroy hysicaIIy masses of cailaI. Iven vilh lhis deslruclion, cailaIism did nol relurn lo a lhe OCC
and TCC of 1825. This is lhe onIy exogenous means for Iovering lhe OCC and TCC. There are olher
exogenous means for deIaying lhe breakdovn of cailaIism: exansion of debl, unroduclive inveslmenl
such as miIilary buiIdu, inveslmenls in olher arls of lhe vorId-vhich onIy lransfers lhe conlradiclions
on a vider scaIe. ul lhese means disguise lhe faIIing lhe rale of rofil and cause an increase in roduclive
enlerrises exanidng beyond vhal lhey couId have and encourage lechnogicaI change and a rise in lhe
TCC and OCC, and so on.
(2)The evidence of Marx's ovn vork shovs he enlerlained no such simIislic viev
Hinerich and CIarke are righl lhal Marx suorled such a viev, bul lhey are vrong lo say he vas
indecisive aboul or abandoned il. Ireeman argues lhal he never heId such a viev. I have never read any
such assages in Marx conlradicl vhal I slaled above. And I can give amIe quoles from IngeIs,Lenin,
Rosenburg, Ireobrashensky vhere lhey inlerrel Marx lhis vay.
(3)MichaeI aears sIighlIy schizohrenic. On lhe bIog I referred lo, he re|ecls my case lhal lhe rale of
rofil shouId incIude financiaI assels in lhe denominalor. ul in lhal case, he cannol ossibIy cIaim lhal
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Page 15 oI 30
lhe rale of rofil in lhe UK musl inevilabIy faII, since on his ovn measure of il, lhis rale has risen
syslemalicaIIy since 1974.
I musl say lhal AIan shovs a massive confusion in lhose senlences. IinanciaI assels in vhal denominalor`
Marx's vhoIe lheory is focused on lhe deveIomenl of lhe roduclive forces lo roduce consumabIe
goods.. Those roduclive forces are lhe means of roduclion in lhe form of commodilies used lo roduce
lhose consumer commodilies. And lhe Iabor needed lo roduce lhose commodilies. ecause finance
cailaI gels surIus vaIue, does nol mean il roduces il. SecondIy, Marx's modeI vas deveIoed as if
cailaIism vas sread lhroughoul lhe vorId. He used Greal rilain as lhe modeI, bul he assumed il
encomassed lhe vhoIe cailaIisl syslem-il did nol lhen and il cerlainIy does nol nov. To lheorelicaIIy use
Greal rilain lo emiricaIIy verify or disabuse Marx's lheory is nonsensicaI. Hov much surIus vaIue does
Greal rilain sliII calure by being a ma|or cailaIisl cenler of finance and hov much of ils roduclive
aaralus is acluaIIy Iocaled in lhe Soulh. The same aIies lo aII lhe indusliaI-o I'm sorry, decIining
induslriaI economies from lhe Soulh vhere so much of roduclive cailaI has moved-lho ils ovnershi
and conlroI have nol comIeleIy done so. Il may be imosibIe lo comule a vorId rale of rofil on
roduclive cailaI-vhich is vhal lhe Marxian rale of rofil vouId be, bul il is imossibeI lo verify
lheorlicaIy (or nol) Marx's lheory of lhe rale of rofil by measuring lhe rale of rofil of any singIe counlry-
even lhe US and Greal rilain.
The vhoIe robIem vilh KIiman and Ireeman is lhey do nol viev cailaIism as evoIving-as deveIoing
and running inlo a barrier-cailaI ilseIf. Inslead, cailaIism is messy, il runs inlo recurrenl crisis. Therefore
lhere is IillIe subslanliaI difference belveen lheir inlerrelalion and lhal of CIarke, Weeks, Harvey, elc.
Ixcel somelimes lhal oId rale of rofil faIIs.
As for being a falaIisl, il did nol slo Marx, IngeIs, Lenin, Luxemburg from being damn commilled
revoIulionis lhroughoul lheir Iives. They did nol send lheir lime vailing for lhe coIIase of cailaIism.
There is somelhng ironic aboul an academicaIIy lrained Marxisl economisl describing anolher as a falaIisl.
5hanc Magc 5ays:
}uIy 27, 2013 al 10:21 m
H.A. Cox vriles:The rale of rofil musl faII in Iife or lhe lheory is incorrecl. The Iav is unidireclionaI
and irreversibIe.
This is simIy faIse. The Iav is nol unidireclionaI, and il is nol irreversibIe. Al definile limes in hislory,
lhe faII in lhe rale of rofil has been seclacuIarIy reversed.
The Lav, as formuIaled by Marx, slales lhal il lurns inlo an anlagonism of lhis mode of roduclion al
a cerlain oinl and requires, for ils defeal, eriodic crises. So lhe oeralion of Marx's Lav nol onIy
ermils eriods of rising rofilabiIily bul absoIuleIy requires lhem. Thal is vhal makes il a overfuI
exIanalion of lhe cailaIisl economic cycIe, lo vhich crises are inlegraI.
Andrcw K!iman 5ays:
}uIy 27, 2013 al 10:39 m
IMO, Shane's oinl is righl, exceIIenl, and exlremeIy imorlanl. One of lhe foremosl merils of Marx's
crisis lheory is lhal il is abIe, unIike a variely of olher crisis lheories, lo exIain, vilhoul any ad hoc
gimmicks, vhy ve go round lhe vhoIe circIe once again, as Marx ul il, and vhy Iermanenl crises
do nol exisl, as he aIso ul il.
a!anIrccman3 5ays:
}uIy 28, 2013 al 8:13 m
So far I have nol seen a coherenl resonse lo refulalion of MiIIer, vhich MichaeI Roberls and I lhink H.
A. Cox bolh endorse. MiIIer had vrillen lhal The rale of rofil musl faII in Iife or lhe lheory is
incorrecl. The Iav is unidireclionaI and irreversibIe.
To lhis I resonded, as Shane Mage righlIy noles:
This is simIy faIse. The Iav is nol unidireclionaI, and il is nol irreversibIe. Al definile limes in
hislory, lhe faII in lhe rale of rofil has been seclacuIarIy reversed.
Cox resonds: This rocess is unidireclionaI unIess you have a var-such as WWII and deslroy
hysicaIIy masses of cailaI. Iven vilh lhis deslruclion, cailaIism did nol relurn lo as lhe OCC and
TCC of 1825. This is lhe onIy exogenous means for Iovering lhe OCC and TCC. There are olher
exogenous means for deIaying lhe breakdovn of cailaIism: exansion of debl, unroduclive
inveslmenl such as miIilary buiId-u, inveslmenls in olher arls of lhe vorId-vhich onIy lransfers lhe
conlradiclions on a vider scaIe. ul lhese means disguise lhe faIIing lhe rale of rofil and cause an
increase in roduclive enlerrises exanding beyond vhal lhey couId have and encourage
lechnoIogicaI change and a rise in lhe TCC and OCC, and so on.
In shorl,
(1) The rale of rofil does nol aIvays faII in Iife since under definile circumslances, vhich aear in
Iife, il does nol faII
(2) The Iav is nol unidireclionaI since, on occasions, il moves in lhe oosile direclion
(3) The Iav is nol irreversibIe, since under definile circumslances, il is reversed.
MiIIer's slalemenl is lherefore faIse, by H.A. Cox's ovn admission. You cannol on lhe one hand say
lhal lhe faII reverses under cerlain circumslances, and lhen say 'hovever il is unidireclionaI and
irreversibIe'. This is nol a IogicaIIy lenabIe osilion. Il is equaIIy unlenabIe lo argue lhal il is reaIIy
faIIing, even lhough il is in facl rising, because various means disguise lhe faIIing rale of rofil. If il is
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Page 16 oI 30
disguised, lhen reciseIy il did nol faII in Iife. This is Iike saying somebody is reaIIy dead, bul lheir
dealh has been disguised by lhe facl lhal lhey are Iiving.
Such resenlalions of Marx's lheory do nol defend lhe Iav al aII bul exose il lo ridicuIe. Marx
undoubledIy heId lhal cailaIism conlained vilhin il conlradiclions lhal il couId nol resoIve, and lhal
lhe Iav of lhe lendenliaI faII of lhe rale of rofil exIained lhe cause of lhe observed hisloricaI lrend of
lhe rale of rofil and reealed exIosions or 'crises' lo vhich lhis gave rise.
If hovever you exress lhis scienlific discovery incorreclIy, for examIe by cIaiming lhal il aIIovs us lo
redicl a 'unidireclionaI and uncondilionaI' faII vhere in facl no such faII is observed, lhe consequence
viII be lhal you cannol defend lhal discovery. Worse sliII, Marx's many delraclors incIuding lhe
'Marxisls vilhoul Marx' viII Iose no oorlunily lo oinl lo lhe faiIure of your defence as yel more
evidence lhal Marx's lheory is indefensibIe.
Thal is lo say, reciseIy in order lo defend Marx's discoveries, il is necessary lo resenl lhose
discoveries correclIy. Thal is my rofound ob|eclion lo lhe mis-slalemenl of lhose discoveries vhich
ve find in lhe aer of Carchedi and Roberls.
Char!cs Andrcws 5ays:
}uIy 26, 2013 al 6:40 m + ReIy
If ve knov lhe Iavs of molion of a lhing, ve can make rediclions nol lhe exacl course of evenls, bul
somelhing aboul vhere lhings musl go.
Marx redicled lhal lhe cailaIisl economic order vouId end and be succeeded by a non-exIoilive order,
caII il sociaIism, communism, vhal you viII. Il viII, of course, lake human aclion lo do il, lhere is no
conlradiclion in lhal.
Hovever, Marx did nol base lhis rediclion on any arlicuIar IeveI or course of lhe rale of rofil nor even
lhe successive occurrence of crises (a series of evenls lhal lhe Iav of faIIing rofil rale does redicl). A
counlry goes inlo an era of revoIulion, among olher causes, vhen a breaking oinl is reached in a more
generaI conlradiclion belveen cailaIisl economic reIalions vage Iabor al ils core and quaIilalive
changes in nev roduclive overs. No Rich, No Ioor.
Thnmas Wci 5ays:
}uIy 26, 2013 al 8:00 am + ReIy
a) .malhemalicaIIy, lhe rale of surIus vaIue couId lend lovards infinily (vhere vorkers Iive on air).
The vorkers conlinue lo Iive vilh a cerlain amounl of commodilies, lheir reaI vage in lerms of commodilies
does nol faII, bul lhe amounl of Iabour lime needed lo roduce lhem faIIs lovards zero. OnIy because of lhis,
nol because vorkers Iive on Iess and Iess roducls, lhe rale of surIus couId lend lovards infinily.
b) Mislakes of Heinrich are, I lhink, lhal he overIooks fixed cailaI by cIaiming lhal aII fixed cailaI can be
regarded as circuIaling cailaI if onIy one lakes lhe eriod of accounling Iong enough. Afler, say 10 years,
mosl of fixed cailaI is roducliveIy consumed, so il is, if you Iook al 10-year-eriods, kind of circuIaling
cailaI. Thal is lhe cIaim of Heinrich, vhich aIIovs him lo abslracl from lhe vhoIe dynamic associaled vilh
fixed cailaI inveslmenl.
c) Heinrich and lhe Okishians assume, lhal afler every inlroduclion of nev lechnoIogy, a nev sleady slale
equiIibrium vilh an equaI generaI rale of rofil amongsl branches is reached. y lhis comaralive-slalic
melhod lhey gel lhe resuIl lhal lhe rale of rofil rises. This assumlion mighl be based on some remarks from
Marx in voIume III. There is, hovever, no markel mechanism, vhich Ieads lo such equiIibria, on lhe conlrary,
cailaIisl roduclion is an ongoing accumuIalive rocess in vhich concels of equiIibrium do nol make much
sense (again, erhas conlrary lo some remarks from Marx, vho occasionaIIy laIks aboul equiIibrium).
Chnppa Mnrph 5ays:
}uIy 26, 2013 al 12:52 m + ReIy
Tvo lhings:
1) Thanks for lhe arlicIe! Very usefuI for anchoring lhe discussion in a scienlific aroach and erseclive.
ImiricaI evidence and lhe lrulh are nol our enemies. They are very much lhe enemies of bourgeois
economisls of aII schooIs and coIours, incIuding our friends lhe Marxisls vilhoul Marx TM.
Iace AIan Ireeman I lend lo agree vilh MichaeI on lhe inevilabiIily fronl. Given lhe condilions sliuIaled,
lhe faII is bolh unidireclionaI and inevilabIe in lhe Iong lerm. As is lhe lug of gravily. Counler-acling faclors
(Iike molion and veIocily in lhe case of gravily eg moon round earlh) aear lo negale lhe Iav if il's laken lo
mean aIvays dovnvards, never uvards, bul bolh Marx and MichaeI are cIear over lhe inlerruled non-
Iinear shae of lhe grah. We couId use lhe cancer-causing effecls of lobacco as a araIIeI or indeed anylhing
slalislicaIIy lrue bul overdelermined and muIli-facloriaI. Tobacco is inevilabIy carcinogenic. AIan I and
Andrev K argue lhal Marx onIy exIains vhal haens and nol vhal musl haen lhis is disingenuous and
kovloving lo a faIse Kanlian underslanding of vhal science does. HegeI is a beller guide lo lhe Iogic of
science lhan Kanl, bul lhal discussion is somelhing lhal is even furlher from loday's schoIarIy horizons (and
oIlicaI debale) lhan Marx's ideas.
2) Mike, in your arlicIe you and Carchedi vrile: variabIe cailaI (lhe vaIue of Iabour over and lhe onIy
crealor of vaIue).
WhiIe il does indeed have lhe vaIue of Iabour over II lhis commodily is soId al ils vaIue, il doesn'l
olhervise, and I lhink you shouId have made lhis cIear given lhal vaIue is such a cenlraI and misunderslood
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Page 17 oI 30
calegory in Marx's CailaI. Comelilion and lhe dislorlions of lhe rices of roduclion caused by il require
lhis dislinclion lo be made.
More imorlanlIy your second aosilion, lhe onIy crealor of vaIue is comIeleIy vrong and very
misIeading. As il slands you are arguing lhal vaIue is lhe crealor of vaIue, since you are saying lhal variabIe
cailaI is vaIue and al lhe same lime creales vaIue.
Lel's searale some lhings oul here.
Iirsl, cailaI and vaIue are dead lhings. They are crealed, and creale nolhing. Marx caIIs lhem congeaIed
Iabour. Dead Iabour embodied in commodilies.
Second, Iabour over is a commodily and as such dead, a reosilory of congeaIed Iabour.
So lhere is an oosilion belveen dead and Iiving Iabour lo be laken inlo consideralion. Living Iabour is vhal
creales vaIue in lhe Iabour rocess. VaIue is ils resuIl and ils quanlily is vaIidaled in lhe saIe and reaIizalion of
lhe commodily in lerms of money, lhe vaIue equivaIenl.
The confusing lhing is lhal Iabour over is idenlicaI vilh Iiving human beings even lhough as a commodily il
is dead vaIue. Labour over is lhe inescaabIe vehicIe of Iiving Iabour, bul ils roIe as a commodily
subordinales il lo cailaI in lhe cailaIisl roduclion rocess. This is vhal aIIovs eoIe Iike Heinrich lo
vriggIe and squirm around in lhe maleriaIily of surIus vaIue and ils roduclion and consequences lhey
onIy see lhe felishized asecl of Iabour, ils dead carcass. They are Iike lhe vorms in lhe meal fed lo lhe saiIors
on lhe allIeshi Iolemkin
We, lhe vorking cIass, ovn lhe commodily Iabour over, of course, and as ve aII knov il's our onIy assel.
And il's in lhe hisloricaI and oIilicaI over slruggIes over lhe fale of lhis commodily more exciling even
lhan lhe fale of goId or oiI! lhal human sociely deveIos from one mode of roduclion lo anolher.
And once ve gain lhis erseclive ve see vhy you are |uslified in insisling on lhe inevilabiIily and uni-
direclionaIily of Marx's cenlraI Iav. When cailaIism succumbs lo ils inner conlradiclions under lhe bIovs of
hisloricaI and oIilicaI forces il viII in no vay reverl lo feudaIism or sIavery, lhe modes of roduclion lhal
receded il. Il cannol go back. Il viII eilher be raised lo sociaIism in a a vorId sociely of freeIy associaled
roducers or crash inlo a slale of barbarism ve can'l conceive of nov, aIlhough lhe brulaIily and alrocilies of
lhe asl cenlury or lvo give us some hinls. Thal is, if human sociely isn'l vied oul aIlogelher.
Thanks again for lhe arlicIe, and lhanks for raising lhis arlicuIar oinl, hovever inadverlenlIy. The
discussions here are becoming more and more focused and indisensabIe and lhe reason is lhal lhe faIIing
rale of rofil is exaclIy as you say lhe mosl imorlanl Iav of molion of cailaIism, around vhich aII lhe
henomena of cailaIisl sociely revoIve.
michac! rnbcrts 5ays:
}uIy 26, 2013 al 1:48 m + ReIy
Choa
Thanks for lhis. I agree very much vilh your anaIysis and lhanks for correcling my 'shorlhand' on
variabIe cailaI ve cannol aIvays gel lhings dead righl inb a quick bIog.
a!!an harris 5ays:
}uIy 26, 2013 al 11:25 m + ReIy
Il seems lo me lhal vhal Marx meanl in VoIumes II and III is lhal lhe lendency of lhe rale of rofil lo faII is
due lo lhe facl lhal lhe cailaIisl aIvays lries lo eIiminale as much human Iabor as ossibIe from lhe
roduclion rocess. Ixanding use of lechnoIogy makes lhis nol onIy ossibIe, bul absoIuleIy essenliaI.
Irofil, hovever, cannol be made off a machine, onIy a human being can roduce a rofil (or surIus vaIue.)
Thus, for inslance, if a roducl conlains $25 of Iabor aid in vages, $25 of unaid Iabor (lhe surIus vaIue)
and $50 of machines, rav maleriaIs, elc. (i.e. conslanl cailaI) lhen lhe lolaI roduced vaIue viII be $100 and
lhe rale of rofil vouId be (100-75)/100 25%, or rice Iess cosls divided by rice.
If lhe amounl aid in vages dros lo, say, $10, lhe unaid Iabor viII aIso dro, bul nol exaclIy al lhe same
rale, bul il viII necessariIy dro because il is Iabor aid vilh vages vhich creales lhe surIus-vaIue/rofil.
The increase in lhe use of lechnoIogy aIIovs lhe cailaIisl lo roduce lhe same lolaI vaIue, $100, by aying $10
in vages, bul receiving onIy $10 in unaid Iabor-vaIue. The conslanl cailaI vaIue of machinery, elc. rises lo
$80. Nov lhe rale of rofil is: (100-90)/100 10%.
Thus lhe rale of rofil viII inevilabIy faII. This is nol lo say, hovever, lhal aggregale rofil viII aIso faII, in
facl, il viII conlinue lo rise. This is due lo lhe monooIizalion of cailaI. The big cailaIisls deslroy lhe smaIIer
ones because of lhe efficiency of size. A big monooIy can slay in business on a much smaIIer rale of rofil
lhan can a smaII enlerrise.
As Marx shoved, lhis lendency can be inlerruled by, for inslance, lhe increased exIoilalion of Iabor. Inslead
of using high-cosl machinery, lhe cailaIisl can simIy force vorkers lo vork more and ay lhem Iess. This is
haening righl nov in China and arls of lhe Wesl. Sooner or Ialer, and il may be a Iong lime, lhe lendency
viII make ilseIf feIl, because il is imossibIe for lhe cailaIisl lo ignore advances in lechnoIogy. And because,
in my viev, rofil can onIy be made off lhe skin of a human vorker.
ul, if lhe lendency is reaI, lhere shouId be emiricaI (ob|eclive) economic evidence of il. There have been
severaI sludies over lhe Iasl 10 yrs or so shoving lhal, in facl, lhe rale of rofil over lhe asl 200 yrs has
indeed shovn a lendency lo faII. One sludy vas done by IauI Cocksholl and his graduale sludenls in
ScolIand. I even recaII a sludy done by GoIdman, Sachs, of aII eoIe, shoving lhe same lendency vhen
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comaring veslern economics lo China. China, being Iess induslriaIized lhan lhe vesl, has more human Iabor
lo exIoil and, lherefore, roduces a higher rale of rofil, bul, of course, a Iover aggregale rofil er caila.
And China, lherefore, allracls huge inveslmenls in cailaI. ObviousIy China is calching u vilh lhe vesl in ils
use of lechnoIogy. When China finaIIy does calch u, lhen veslern inleresls Iike GoIdman, Sachs, viII have lo
Iook for somevhere eIse lo exIoil surIus vaIue.
sartcsian 5ays:
}uIy 27, 2013 al 12:59 am + ReIy
offy vriles: SecondIy, lhere is lhe queslion of moraI derecialion. ul, in addilion, if machinery elc. simIy
slands idIe because roduclion has been cul back, il aIso suffers hysicaI derecialion
1) moraI derecialion is by definilion nol vear and lear and consequenlIy has IillIe if anylhing lo do vilh
lhe rale or inlensily of usage of lhe fixed assels.
2) vhalever lhe hysicaI derecialion of idIe equimenl, il is aImosl imossibIe lo recover lhal cosl in lhe
markels.. so consequenlIy no maller hov of lhe conlainer fIeel vas idIed, lhe derecialion of lhal fIeel couId
nol be calured in lhe daiIy hire rales of lhe shis, or in lhe rales charged for lransorling conlainers on lhe in
service fIeel lhis is vhy sooner or Ialer, cailaI has lo deslroy accumuIaled assels
Olher issues: I lhink Marx's exIanalion of lhe increase of circuIaling cailaI over fixed cailaI is simIy
saying vhal I'm saying more dead Iabor absorbs roorlionaleIy, or in unils, Iess Iiving Iabor, or ve can ul
il lhal more reIalive surIus vaIue is arorialed vhiIe necessary Iabor is reduced and il requires more more
accumuIaled dead Iabor lo circuIale lhe roorlion of surIus vaIue.
Regarding lhis:NaluraI Iavs cannol be aboIished al aII. The onIy lhing lhal can change, under hisloricaIIy
differing condilions, is lhe form in vhich lhose Iavs asserl lhemseIves. And lhe form in vhich lhis
roorlionaI dislribulion of Iabour asserls ilseIf in a slale of sociely in vhich lhe inlerconneclion of sociaI
Iabour exresses ilseIf as lhe rivale exchange of lhe individuaI roducls of Iabour, is reciseIy lhe exchange
vaIue of lhese roducls.
The naluraI Iav Marx is referring lo here is NOT lhe Iav of vaIue. The naluraI Iav is lhe sociaI necessily
lo organized and reroduce a roorlionaI dislribulion of Iabor. Ixchange vaIue is lhe vay lhe Iav, or beller
lo say, lhal sociaI necessily is exressed, or medialed, under lhe condilions of rivale exchange of lhe
individuaI roducls of Iabor.
Whal dislinguishes cailaI, vhal makes lhe Iav of vaIue vhal il is lhe exression, lhe medialion of lhe need
lo sociaIIy dislribule Iabor in roorlion is lhal lhe exchange of commodilies is delermined by lhe sociaIIy
necessary Iabor of lhe commodilies' reroduclion. SociaI.
Thal secific exression is onIy ossibIe because aII Iabor is reduced lo a shared assel lime. Time is
everylhing, man is nolhing, or al mosl, lime's carcass vrole Marx. Thal, IMO, is lhe key.
In lhe Grundrisse (` nol sure) Marx vriles. AII economy is lhe economy of lime. Indeed, aII economies are
aboul lhe organizalion, dislribulion and lhe reroduclion of Iabor-lime. Nol aII economy(ies) of lime is/are
economy(ies) of vaIue.
I do nol lhink ve can lake lhe examIe of Robinson Crusoe vhich Marx vas using lo oinl lo lhe fIav and
lhe bIindsol of bourgeois oIilicaI economy (a lheorisl of vhich Defoe fancied himseIf) as evidence lhal
Marx lhoughl lhe Iav of vaIue vas limeIess, or governed re-cailaIisl socielies (olher lhan al lheir fringes).
I'II defer lo Choa's inlerrelalion of IngeIs' hisloricizing lhe Iav of vaIue, vhiIe I lry lo lrack dovn chaler
and verse. I'II reread lhose assages from IngeIs. And I confess, lhe more I read Heinrich, lhe more I Iike
IngeIs.
Andrcw K!iman 5ays:
}uIy 27, 2013 al 3:30 am + ReIy
Ior lhe record, I endorse vhal AIan Ireeman said above aboul MichaeI Roberls' osl. The osl is
irresonsibIe and il lhereby rovides ammunilion lo lhe oonenls of Marx's LTIRI and lheory of cailaIisl
crisis. I say il is iresonsibIe because il makes an exlremeIy slrong slalemenl lhal lhe vorId rale of rofil
musl faII in lhe Iong run (emhasis added) lhal il does rove and cannol rove. I nole lhal Roberls has nol
lried lo defend his endorsemenl of lhe cIaim lhal lhe rale of rofil musl inevilabIy faII evenluaIIy againsl
AIan's conlenlion lhal |ljhis is simIy faIse, much Iess defend il successfuIIy, i.e. by roviding an honesl-
lo-goodness roof.
I'm aImosl cerlain lhal I knov vhy no such defense has been offeredlhere is no such defense. (Nolice lhal I
do nol cIaim lhal il is inevilabIe lhal lhis is lhe reason. Thal loo vouId be irresonsibIe.)
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Page 19 oI 30
I can rove and am reared lo rove lhal lhe foIIoving condilions aIone do NOT guaranlee lhal lhe rale of
rofil s/(c+v) vII evenluaIIy faII: (1) vaIue is delermined by Iabor-lime, and (2) c/v rises conlinuaIIy. If ve add
ALL of lhe foIIoving addilionaI condilions, lhen ve can guaranlee an evenluaI faII in lhe rale of rofil if
said condilions oblain: (3) lolaI cailaI (c + v) increases conlinuaIIy, (4) lhe increase in lolaI cailaI is
unbounded, and (5) lhe increase in c/v is unbounded.
Iven if aII 5 condilions oblain, lhe evenluaI faII lhal is guaranleed means IillIe. If ve ick any secific
(finile) momenl in lhe fulure, and ask vhelher lhe 5 condilions guaranlee lhal lhe rale of rofil viII have
faIIen, even ehemeraIIy, by lhal momenl, lhe ansver is no.
I suggesl lhal eoIe lhink lvice before lrealing us lo hand-vaving and hoIIov, unroved, falaIislic, and
quasi-reIigious asserlions of inevilabiIily lhal |usl end u heaing a Iol of debris on Marx's Iegacy and giving
ammunilion lo lhe oonenls of his LTIRI and lheory of cailaIisl crisis.
AIso for lhe record: There is a cruciaI dislinclion belveen vhal Marx vrole and vhal lhe LTIRI is. When our
aer says lhal lhe LTIRI is an exIanalion of vhy lhe rale of rofil does lend lo faII, nol a rediclion (much
Iess a rediclion lhal il musl faII), ve mean exaclIy vhal ve vrole. Il's a slalemenl aboul lhe LTIRI. If
anyone can DISIROVI lhis, I'd Iike lo see lhe DISIROOI. Olhervise, Iease refrain from nonsense aboul us
suosedIy being disingenuous.
Hic Rhodus, Hic SaIla.
sartcsian 5ays:
}uIy 27, 2013 al 4:22 am + ReIy
You may be correcl in your argumenl lhal lhere is a dislinclion belveen vhal lhe LTIRI is and vhal
Marx vrole, bul Marx vrole of such a Iav and exressed il lhus: (Grundrisse, The Chaler on CailaI,
Nolebook 7 - 763 Ienguin):
The second greal Iav is lhal lhe rale of rofil decIines lo lhe degree lhal cailaI has aIready arorialed
Iiving Iabour in lhe form of ob|eclified Iabour, hence lo lhe degree lhal Iabour is aIready cailaIized and
hence aIso acls increasingIy in lhe form of fixed cailaI in lhe roduclion rocess, or lo lhe degree lhal lhal
lhe roduclive over of Iabour grovs. The grovlh of lhe roduclive over of Iabour is idenlicaI in
meaning vilh (a) lhe grovlh of reIalive surIus vaIue or of lhe reIalive surIus lime vhich lhe vorker
gives lo cailaI, (b) lhe decIine of lhe Iabour lime necessary for lhe reroduclion of Iabour caacily, (c)lhe
decIine of lhe arl of cailaI vhich exchanges al aII for Iiving Iabour reIalive lo lhe arls of l vhich
arliciale in lhe roduclion rocess as ob|eclified Iabour and resuosed vaIue...In olher vords lhe
second Iav is lhe lendency of lhe rofil rale lo decIine vilh lhe deveIomenl of cailaI, bolh of ils
roduclive over and of lhe exlenl in vhich il has aIready osiled ilseIf as ob|eclified vaIue, of lhe exlenl
vilhin vhich Iabour as veII as roduclive over is cailaIized.
This cerlainIy is a slalemenl nol of inevilabiIily bul of a lendency inherenl in lhe deveIomenl of cailaI,
as il deveIos ilseIf across and lhrough gIobaI exchange, and lhe vorId markels.
You can cIaim lhal such a Iav shouId nol be, or has no rediclive over, bul lhen vhy even refer lo il as a
Iav` Why, if il is inherenl lo lhe deveIomenl of cailaI shouId ve say, ve cannol redicl, on lhe basis
of lhis Iav, vhal viII lend lo haen vilh cailaI over lhe course of ils deveIomenl` and as evidenced
lhrough lhe differenl hases of ils cycIes`
ecause il cannol be roven malhemalicaIIy` ecause cailaI is aIvays, al every oinl, invoIved in
devaIualion of some cailaI, concenlralion of cailaIs, inlensificalion of exIoilalion` Thal's lhe oinl
vhere hisloricaI lrulh, and malhemalicaI roof diverge. Iroof is nol lrulh.
Il seems lo me Andrev lhal your argumenl reaIIy boiIs dovn lo ve can onIy use lhe Iav lo exIain vhal
has haened afler il has aIready haened. Hovever vhal has haened is nol aIvays aclive in
cailaI, and lhus lhe Iav is nol a rediclion.
I lhink, in facl, Marx is making a rediclion. He is redicling vhal haens as cailaI deveIos and runs
inlo lhe barrier of ils ovn deveIomenl. Thal's vhal lhe immanenl crilique is. Thal's vhy Marx Iaces
such slress on lhe lendency of lhe rale of rofil lo faII such a decIine is lhe exression, and creales lhe
shock of recognilion among cailaIisls, of lhe seIf-Iimilalions of cailaI by cailaI, of rofilabiIily by vaIue
roduclion, of lhe confIicl belveen lhe Iabor rocess and lhe vaIue rocess lhal lhe synchronicily
belveen lhe lvo is nol ermanenl, naluraI, or elernaI.
Does lhal mean lhal lhe vorId rale of rofil musl inevilabIy decIine` I lhink inevilabIy is reaIIy lhe
vrong vord. I vouId lhink ve vouId hrase il as cailaI deveIos, and deveIos ilseIf gIobaIIy, il musl
conlinuaIIy slrive lo offsel lhe lendency for lhe rale of rofil on lhe accumuIaled cailaI lo decIine.
Somelimes doing lhal is easier lhan olher limes. Somelimes il can be accomIished in devaIualion of
cailaI. Somelimes il can be accomIished by crisis.
Somelimes lhe mechanisms of crisis are inadequale, insufficienl lo offsel lhe lendency of lhe rale lo
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Page 20 oI 30
decIine. OnIy lhe deslruclion of cailaI viII suffice. And THAT is an inevilabiIily.
Andrcw K!iman 5ays:
}uIy 27, 2013 al 5:04 am
We don'l say lhal lhe Iav has no rediclive over. ObviousIy anylhing lhal can exIain lhe asl
successfuIIy can aIso successfuIIy redicl lhe fulure, if lhe fulure is Iike lhe asl.
ul (a) lhis isn'l a maller of vhal musl haeninduclive argumenls don'l rovide guaranlees, and
(b) lhe Iav ilseIf is an exIanalion of vhal occurs, nol a rediclion, and eseciaIIy nol a rediclion lhal
a faII in lhe rale of rofil musl occur in lhe Iong-run come vhal may.
In some conlexls, il mighl be sIilling hairs lo say lhal lhe Iav doesn'l redicl, bul nol in lhe conlexl
of resonding lo Heinrich's MR arlicIe. In any case, lhe Iav doesn'l say vhal musl inevilabIy occur.
Thal's lhe dislinclion our aer focuses onexIanalion vs. asserlion of vhal musl occurnol asl vs.
fulure (exIanalion vs. rediclion).
I'm hay lo redicl and do redicl lhal cailaIism is sub|ecl lo recurrenl crises in lhe fulure as veII as
lhe asl, due in arl lo a lendency of lhe rale of rofil lo faII lhal is inexlricabIe from any and every
vaIue-roducing economy in vhich cailaI accumuIales vilhoul bound and lhe ralio of conslanl lo
variabIe cailaI increases vilhoul bound. This rediclion of course dravs heaviIy on lhe LTIRI and
olher asecls of CailaI, bul il's nol lhe Iav ilseIf.
So I don,l lhink lhal you disagree vilh us, Sarlesian, or ve vilh you, lhough my co-aulhors can seak
for lhemsevIes. ul ve cerlainIy do disagree vilh lhose vho vrongIy cIaim lhal lhe vorId rale of
rofil musl faII in lhe Iong run or musl inevilabIy faII evenluaIIy. If lhey nov vanl lo say lhal lhey
don'l mean il, I'II be over|oyed!!!
sartcsian 5ays:
}uIy 27, 2013 al 11:57 am
In generaI, Andrev, I don'l disagree vilh you. I lhink Marx is exressing lhe IROI as a conlinuous
barrier lhal cailaI conlinuaIIy slrives lo overcome somelimes lhe barrier becomes more acule,
somelimes il's, and ils miligalion, are Iess acule.
The condilion, hovever is chronic, vhelher in ils remission hase or ils acule hase.
I do nol agree vilh MichaeI lhal afler some lime aII counler-lendencies are exhausled, or exhausl
lhemseIves. If lhal vere lhe case, lhen indeed ve vouId have a lheory of irremediabIe coIIase and
ve'd eilher have lo say. lhe lheory is vrong. or ve haven'l reached lhal oinl vhen lhe counler-
lendencies are comIeleIy exhausled.
The Ialler exIanalion reminds me of lhe argumenls of some, very fev, Luxemburgisls vho say
cailaIism hadn'l run oul of re-cailaIisl formalions lo exIoil . unliI nov. NOW, cailaIism has.
The vorId markels are comIele, fuIIy deveIoed, and vilhoul furlher room for exansion..
confusing, IMO, geograhy vilh vaIue roduclion.
ul lhal's a vhoIe olher lhread..
carchcdi 5ays:
}uIy 27, 2013 al 11:10 am + ReIy
As Andrev KIiman and AIan Ireeman veII knov, lhal vhen MichaeI and I say lhal lhe ROI musl 'inevilabIy
faII' ve mean lhal afler some lime (vhich is lhe meaning of 'in lhe end') lhe counler lendencies, by lheir ovn
nalure, viII slarl groving Iess and Iess slrong, evenluaIIy exhausling lheir caacily lo slo lhe lendency (lhe
faII in lhe ROI).
Whal does 'afler some lime' mean` Can ve comule il malhemalicaIIy` No. In lhe case of lhe rale of
exIoilalion, as shovn by Marx's examIe of 2 vorkers having lo do vhal 24 vorkers reviousIy did, lhis
counler lendency cannol go on forever because lhere are sociaIIy delermined Iimils lo lhe increase in lhe rale
of exIoilalion. The Iimil is delermined nol by a malhemalicaI formuIa bul by lhe cIass slruggIe. We can
redicl lhal il viII be reached, onIy lo be shifled again in favour of cailaI.
As for lhe oIilicaI consequences of lhe osilion lhal lhe Iav 'exIains' bul does nol 'redicl', or in KIiman's
more recenl formuIalion, 'if lhe ROI has faIIen in lhe asl, il may faII in lhe fulure', lhis is oIilicaIIy
disaslrous for revoIulionary marxisls. If ve cannol redicl lhal lhe ROI viII inevilabIy faII (nol mighl faII), in
lhe sense |usl secified above, lhen ve cannol redicl lhal crises viII relurn lo visil us cycIicaIIy, and so ve
imIicilIy hoId lhal crises mighl be avoidabIe. To deny lhal crises are inevilabIe means lo embrace (erhas
imIicilIy and unconsciousIy) reformism. Neilher MichaeI nor I are arlicuIarIy hay aboul lhis.
Nov Heinrich says: If lhe rale of rofil has faIIen in lhe asl, lhis does nol conslilule a roofsince lhe Iav
urorls lo aIy lo fulure deveIomenl, and lhe mere facl of a faII in lhe rale of rofil in lhe asl says
nolhing aboul lhe fulure. Heinrich is righl lhal somelhing viII haen in lhe fulure onIy because il has
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Page 21 oI 30
haened in lhe asl. ul he is vrong because he vanls a roof lhal somelhing viII faII in lhe fulure. Since
lhis is imossibIe, some argue lhal lhe Iav can onIy 'exIain' and nol 'redicl'. ul fulure deveIomenls
cannol be 'roved', nol even lhal lhe aIe viII faII lo lhe ground because il has faIIen in lhe asl. Iulure
deveIomenls can onIy be 'redicled'. If lhe rediclion comes lrue, lhe rediclion has been roved correcl
afler il has been made. The oinl is nol lhal lhe ROI mighl faII in lhe fulure because il has faIIen in lhe asl
(on lhis Heinrich is righl). The oinl is lhal ve can redicl lhal lhe ROI viII inevilabIy and lendenliaIIy faII in
lhe fulure because lhe same forces lhal caused ils lendenliaI faII in lhe asl viII conlinue lo oerale in lhe
fulure, i.e. as Iong as cailaIism survives.
sartcsian 5ays:
}uIy 27, 2013 al 12:20 m + ReIy
The oinl is lhal ve can redicl lhal lhe ROI viII inevilabIy and lendenliaIIy faII in lhe fulure because
lhe same forces lhal caused ils lendenliaI faII in lhe asl viII conlinue lo oerale in lhe fulure, i.e. as Iong
as cailaIism survives.
InevilabiIily and lendency are lvo differenl molions so lo seak and are nol necessariIy Iinked in or by
Marx's exression of lhe Iav.
We can redicl, lhal inevilabIy il's going lo rain oulside. Thal doesn'l leII us anylhing regarding lhe
fulure IikeIihood of rain, or fIooding, or of lhe size of uddIes, or vhelher you shouId carry an umbreIIa
vilh you. In making such an asserlion, IMO, you are reroducing Heinrich's error in a mirror image form.
Is il raining oul` Nol yel, bul il viII. When` I can'l leII you. I can onIy leII you il's inevilabIe.
Irove il. Il's inevilabIe.
And lhen ve have a condilion vhere lhe Iack of a currenl occurrence, a reIalion, an evenl, is roosed as
lhe evidence for lhe fulure occurrence, reIalion, evenl. Thank you for lhe informalion. You von'l be
offended if I lurn on The Wealher ChanneI, viII you`
Thal lhe forces lhal caused lhe ROI lo faII in lhe asl, since lhey are inherenl in lhe organizalion of cailaI,
viII TIND lo oerale in lhe fulure, is quile a differenl asserlion.
The forces lhal oeraled in lhe asl did NOT Iead lo condilion vhere aII counlervaiIing lendencies
exhausled lhemseIves. Thal loo is inherenl in bolh lhe lendency of lhe ROI lo faII, and inherenl vilhin
your ovn recognilion lhal lhose forces oeraled in lhe asl.
Edgar 5ays:
}uIy 28, 2013 al 10:49 am + ReIy
To deny lhal crises are inevilabIe means lo embrace (erhas imIicilIy and unconsciousIy) reformism
2 robIems vilh lhis, 1. You assume aII crises slem from lhe ROI and 2, you assume lhal ve are hay lo
see vage sIavery go on and on as Iong as il doesn'l Iead lo a crises. Imagine aIying lhis reasoning lo lhe
sIave!
Andrcw K!iman 5ays:
}uIy 28, 2013 al 10:59 am
A lhird lhing vrong vilh il is lhe absoIulism. Lel's say lhal one's sub|eclive robabiIily lhal crises viII
recur is 0.999, i.e. 99.9%. Ior reasonabIe eoIe (lhose vho make no relense of being absoIuleIy
cerlain aboul anylhing), lhal's more lhan sufficienl reason lo re|ecl reformisl allemls lo lry lo creale a
crisis-free cailaIism. They ALMOST CIRTAINLY von'l vork.
carchcdi 5ays:
}uIy 27, 2013 al 1:14 m + ReIy
ReIy lo Sarlesian, 27 }uIy, 12:20 m. InevilabiIily and lendency are lvo differenl molions so lo seak and
are nol necessariIy Iinked in or by Marx's exression of lhe Iav. I disagree. The asserlion of lhe lendency is
inevilabIe.
We can redicl, lhal inevilabIy il's going lo rain oulside. TheorelicaI argumenls cannol be disroved by
secific examIes. And in any case, lhis examIe is nol erlinenl. No vealher forecasler vouId say lhal rain is
inevilabIe.
And lhen ve have a condilion vhere lhe Iack of a currenl occurrence, a reIalion, an evenl, is roosed as lhe
evidence for lhe fulure occurrence, reIalion, evenl. If you refer lo my osilion, you musl have misread il. I
never said lhal lhe Iack of a currenl occurrence is evidence for fulure occurrence. Ior me lhis is nonsensicaI.
Thal lhe forces lhal caused lhe ROI lo faII in lhe asl, since lhey are inherenl in lhe organizalion of cailaI,
viII TIND lo oerale in lhe fulure, is quile a differenl asserlion. This is vhal I am saying. OnIy, I am adding
lhal lhey viII necessariIy lend lo oerale in lhe fulure.
The forces lhal oeraled in lhe asl did NOT Iead lo condilion vhere aII counlervaiIing lendencies
exhausled lhemseIves. I said: lhe Iimil is delermined nol by a malhemalicaI formuIa bul by lhe cIass
slruggIe. We can redicl lhal il viII be reached, onIy lo be shifled again in favour of cailaI.Or, lhe counler
lendency exhausls ilseIf bul lhen lhe lendency re-creales lhe condilions for lhe counler lendency lo emerge
again, erhas in differenl forms.
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Page 22 oI 30
CB 5ays:
}uIy 27, 2013 al 1:25 m + ReIy
Carchedi, lhis is mosl assuredIy a non sequilur (by formaI and diaIeclicaI Iogic slandards): To deny lhal
crises are inevilabIe means lo embrace (erhas imIicilIy and unconsciousIy) reformism. This imIies lhal
lhe onIy reason lo resisl cailaIism is because of crisis. Why can'l ve suorl revoIulion on olhers grounds
loo (e.g., aIienalion, exIoilalion, oIIulion, democracy, more Ieisure lime elc)`
carchcdi 5ays:
}uIy 27, 2013 al 2:07 m + ReIy
lhis is far from being non sequilur. il shovs a IogicaI reIalionshi belveen denying lhe inevilabiIily of crises
and reformism. il musl be seen vilhin lhe conlexl of lhe resenl discussion, lhe nalure of lhe Lav. Of course
ve shouId suorl revoIulion for a hosl of olher reasons. ul lhis is a differenl slory.
CB 5ays:
}uIy 27, 2013 al 11:55 m + ReIy
Il does nol shov a IogicaI reIalionshi lhough. ecause one can lake ANY slance on lhe LTRII, or no
slance al aII, and sliII be a revoIulionary.
You IileraIIy cIaimed lhal because KIiman has nol said crises are inevilabIe he musl suorl reformism
imIicilIy because il's ossibIe for a crisis-free cailaIism lo exisl.Thal's dubious, because again, one can
be a revoIulionary aboul cailaIism regardIess of lheir osilion on lhe LTRII.
AIlhough you say you shov a necessary IogicaI conneclion I have nol seen one. Al Ieasl nol by lhe
slandards of formaI Iogic, nor from lhe slandards of your diaIeclicaI Iogic (vhich I am onIy |usl nov
reading).
Andrcw K!iman 5ays:
}uIy 27, 2013 al 2:36 m + ReIy
Sarlesian, you vrile,
In generaI, Andrev, I don'l disagree vilh you. I lhink Marx is exressing lhe IROI as a conlinuous barrier
lhal cailaI conlinuaIIy slrives lo overcome somelimes lhe barrier becomes more acule, somelimes il's, and
ils miligalion, are Iess acule.
The condilion, hovever is chronic, vhelher in ils remission hase or ils acule hase.
Is lhis a disagreemenl vilh me` If by IROI you mean lhe lendency for lhe rale of rofil lo faII, lhen il isn'l.
I agree lhal Marx is exressing lhis lendency as a conlinuous barrier elc. If, hovever, you mean faII in lhe
rale of rofil, lhen I disagree, since Marx did nol argue lhal lhe faII in lhe rale of rofil is conlinuous, i.e.,
lhal lhe rale of rofil faIIs monolonicaIIy or conlinuousIy.
sartcsian 5ays:
}uIy 27, 2013 al 3:28 m + ReIy
No, il's nol meanl as a disagreemenl vilh you on lhal oinl. The Iav, IMO, is nol a Iav of lhe rale of rofil
lo faII,or lo faII no maller vhal. The Iav is lhal he delerminanls of cailaI accumuIalion delermine aIso a
lendency for lhe rale of rofilabiIily lo faII.
I disagree vilh MichaeI's formuIalion in lhis maller. I lhink Marx is Iooking al lhe lendency of lhe rale of
rofil lo faII in lvo senses so lo seak immediale, as in lhe necessily for cailaIisl lo counleracl lhe
lendency, and vorId-hisloricaI in lhal il seaks direclIy lo lhe secificily of cailaI and lhe vorId-
hisloricaI Iimils lo cailaI as a mode for lhe organizalion of sociaI Iabor-lime and lo amIify lhe
roduclivily of Iabor.
To Carchedi: You said ve mean lhal afler some lime (vhich is lhe meaning of 'in lhe end') lhe counler
lendencies, by lheir ovn nalure, viII slarl groving Iess and Iess slrong, evenluaIIy exhausling lheir
caacily lo slo lhe lendency (lhe faII in lhe ROI)
If lhal's lhe case, lhen lhal imIies, al Ieasl lo me, a form of calaslrohe, al Ieasl for lhe bourgeoisie, vhere
in lheir 19lh Nervous reakdovn nolhing I do, don'l seem lo vork.
We've had al Ieasl 150 years vhere vhal lhe bourgeoisie does does reverse eriodic, inherenl decIines in
rofilabiIily il |usl cosls a Iol, arms, Iegs, slomachs, brains. and lhal rice is aIvays aid by olher
eoIe.
I agree lhal lhe Iimil lo cailaI is in lhe cIass slruggIe, in lhal cailaI does nol disaear, does nol
exlinguish ilseIf, bul musl be aboIished. Al lhe same lime, I lhink ve need lo examine if lhere are
examIes vhere cIass slruggIe becomes arl of an evenluaI resloralion of lhe rofilabiIily of cailaIism.
Thal Iasl one |usl being somelhing lhal os inlo my head occasionaIIy vhen drifling off lo sIee.
http://thenextrecession.wordpress.com/2013/07/25/returning-to-heinrich/
Page 23 oI 30
Chnppa Mnrph 5ays:
}uIy 27, 2013 al 2:48 m + ReIy
Carchedi vriles: As for lhe oIilicaI consequences of lhe osilion lhal lhe Iav 'exIains' bul does nol
'redicl', or in KIiman's more recenl formuIalion, 'if lhe ROI has faIIen in lhe asl, il may faII in lhe fulure',
lhis is oIilicaIIy disaslrous for revoIulionary marxisls. If ve cannol redicl lhal lhe ROI viII inevilabIy faII
(nol mighl faII), in lhe sense |usl secified above, lhen ve cannol redicl lhal crises viII relurn lo visil us
cycIicaIIy, and so ve imIicilIy hoId lhal crises mighl be avoidabIe. To deny lhal crises are inevilabIe means lo
embrace (erhas imIicilIy and unconsciousIy) reformism. Neilher MichaeI nor I are arlicuIarIy hay
aboul lhis.
asicaIIy lhe KIiman osilion (and Heinrich and aarenlIy Sarlesian loo) is agnoslicism. We can'l knov.
WeII, lhank you, Kanl. This is vhal I vas laIking aboul in my earIier commenl. Kanl's scelicism and
agnoslicism vas a necessary and exlremeIy shar veaon in his revoIulionary var on feudaI hiIosohy and
CalhoIic melahysics. VoIlaire rocIaimed Icrasez I'infame! (Crush lhe abominalion ie lhe CalhoIic
Church), and Kanl did |usl lhis Ieaving lhe Church a lrembIing iIe of fIayed fIesh vilhoul any inleIIecluaI
cIolhes, or crulches or even skin. ul Kanl's var vas againsl lradilion and lhe veighl of aII lhe asl
generalions on our minds elc. He vas cIear-culling lhe |ungIe so heaIlhy Iiving and cuIlivalion couId reIace
lhe snakes, siders, scorions, mosquiloes and quagmire.
His deIiberale refusaI lo roceed beyond lhe anlinomies and oen u lhe Ding an sich meanl an hisloricaI
dead end as far as science and hiIosohy vere concerned. HegeI roceeded lo lackIe lhe anlinomies and
demyslify lhe Ding an sich, aIbeil in an ideaIisl and reIigious fashion. And Marx comIeled lhe |ob of laking
hiIosohy and scienlific erseclive beyond lhe anli-feudaI revoIulion. The lroubIe vas lhal lhe bourgeoisie
no Ionger had any inleresl in lhis nev erseclive and afler lhe revoIulions of 1848 (as Marx said) HegeI vas
regarded as a dead dog. The RevoIulion vilh a cailaI R vas over and done vilh, bourgeois sociely vas
eslabIished, and melahysics and myslificalion vere nov serving nev maslers. Scelicism and agnoslicism
vere lurned againsl nev ideas and sociaI deveIomenl in lhe service of bourgeois obscuranlism. Hence
Kanl's groving ouIarily, lhe cuIl of lhe vhile emigre knov-nolhings (Willgenslein & co), osl-modernism
you name il. And Marxism vilhoul Marx for lhe more daring and fIamboyanl (elly-bourgeois) fIank of
bourgeois obscuranlism.
Nov, vhere lhis Ieaves us al lhe momenl is vilh a revoIulionary lheorelicaI lradilion (Marxism vilh Marx)
vilh a hoIe in ils hearl vhere lhe diaIeclic (HegeI's Logic) shouId be. Our resecl for Marx shouId incIude a
resecl for his hiIosohicaI and scienlific nous in reIalion lo lhe fundamenlaIs of lhoughl. UnforlunaleIy lhis
isn'l lhe case vhen Marxisls (vilh Marx) Ieave Marx aside and shudder Iike IavIov's dogs vhen lhe danger
signaI is given DiaIeclics!! shudder.
KIiman and his coIIaboralors seem lo me lo be shuddering in |usl lhis vay. When I caIIed lheir revaricalions
regarding Iav-bound and inevilabiIily disingenuous il imIied a cerlain deIiberale avoidance of academic
lroubIe (defending HegeI's Logic and lhe diaIeclic) on lheir arl. Ierhas il is Iess dramalic, and lhey are |usl
lreading lhe rimrose alh of scelicism and agnoslicism because everyone eIse in lhe schoIarIy vorId does.
Hovever, if lhey reaIIy lhink HegeI and lhe diaIeclic are such cra, lhen lhey are bound lo admil lhal aII of
Marx lhal is rooled in lhis revoIulionary osl-Kanlian lradilion is aIso cra.
Since lhey don'l, lhey eilher vanl lo have lheir cake and eal il (in lhis case lrying lo lurn Marx inlo a good boy
and Kanlian scelic vhiIe exIoiling lhe MehisloheIian lreasures he mined using lhe anli-Kanlian diaIeclic)
or lhey don'l yel reaIize hov conlradiclory lheir osilion is in lhis resecl.
Over and over again ve are being forced back lo basics vilh regard lo lhe fundamenlaIs of scienlific lhoughl
vhen ve deaI vilh lhe lheory of vaIue and ils consequences.
I shouId make il cIear lhal I lhink, as I aIready said, lhal lhe KIiman el aI. arlicIe is briIIianl in lhe |ob il does
on Heinrich's relenlious misreresenlalions. This resenl discussion lakes us vay beyond Heinrich and his
fuliIe allemls lo gouge lhe Marx oul of Marxism. ul vilh lhe Marx sliII in Marxism, ve need lo be very
serious aboul vhere he slood on lhe rinciIes of science and hiIosohy. I nihiI nihiIo nolhing comes from
nolhing and Marx didn'l come from Kanl bul from HegeI lurned lhe righl vay u, nol from lhe lhin anemic
grueI of scelicaI ideaIisl osilivism god heI us aII, bul from lhe rich creamy brolh of maleriaIisl diaIeclics.
sartcsian 5ays:
}uIy 27, 2013 al 3:53 m + ReIy
Luming me vilh Heinrich` Them's fighling vords, comrade. The issue is nol one of agnoslicism. Il's one
of confusing lendency vilh immediale fulure (hov's lhal for an oxymoron`) acluaIily.
The argumenl made is lhal Heinrich is asking for lhe roof of a fulure occurrence, and nol |usl of A
fulure occurrence bul of every and aII fulure occurrences. We gel lo a oinl vhere lhe Iav lo be a Iav
musl govern aII ossibIe manifeslalions. We gel lhe suosed anli- version of lhis demand from
Heinrich in lhe formuIalion lhal says evenluaIIy, inevilabIy ALL counlervaiIing forces exhausl
lhemseIves. And lhen` And lhen vhal` CailaI coIIases` The rale of rofil conlinues lo Iummel even
vhen Iosses have reached calaslrohic orlions.. Iike say in Greece, vhich Iike lhe nexl bIockbusler fiIm
reIease viII soon be Iaying in a lhealer in your neighborhood`
The maleriaIisl diaIeclic you refer lo, Marx's diaIeclic, is nol one of knoving or nol knoving of beIief
or agnoslicism. Il is lhe diaIeclic of lhe Iabor rocess and lhe sociaI condilions medialing, governing lhal
Iabor rocess. Il is lhe confIicl belveen Iabor and lhe condilions of Iabor. In lhe case of cailaI, lhe confIicl
belveen lhe Iabor rocess and lhe vaIorizalion of rocess.
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Page 24 oI 30
Since lhe vaIorizalion rocess is one of arorialing and revaIorizing surIus vaIue, lhe confIicl here is
nol one vhere lhe arorialion of surIus vaIue ilseIf evenluaIIy ILIMINATIS vage-Iabor, eIiminales
lhe rosecls for fulure organizalion of vage-Iabor.
Il is lhe case vhere lhe confIicl, as il exresses ilseIf as lhe lendency of rale of rofil lo decIine, and lhen
maleriaIizes in such a decIine, arlicuIales lhe unnecessily for lhe organizalion of Iabor as vage-Iabor.
The arlicuIalion hovever is nol ils sociaI reaIizalion. The sociaI reaIizalion can onIy be in lhe aclivily of lhe
sub|ecl lhal is lhe source of lhe hisloricaI rocess vhich is lhe human secies and lhe need for lhe
emancialion of Iabor.
The lendency of lhe rale of rofil lo decIine does nol inherenlIy, or inevilabIy, bring aboul lhe aboIilion of
vage-Iabor. Il viII inevilabIy bring aboul cIass slruggIe.
.
a!!an harris 5ays:
}uIy 27, 2013 al 3:18 m + ReIy
Tvo queslions:
1. Since 1929 (as far back as mosl ureau of Iconomic AnaIysis slalislics go) has lhe rale of rofil shovn a
lendency lo faII`
2. If yes, lhen vhal is lhe exIanalion` If nol, lhen Marxisls mighl as veII give u on lhe Iav of lhe lendency
of lhe rale of rofil lo faII.
I use lhe IA figures because lhey are lhe officiaI slalislics of lhe cailaIisl slale.
Andrcw K!iman 5ays:
}uIy 27, 2013 al 5:37 m + ReIy
carchedi: As for lhe oIilicaI consequences of lhe osilion lhal lhe Iav 'exIains' bul does nol 'redicl', or in
KIiman's more recenl formuIalion, 'if lhe ROI has faIIen in lhe asl, il may faII in lhe fulure', .
IIease suIy a source for lhis quole, or relracl il.
Moreover, lhe characlerizalion of our osilion as lhe Iav 'exIains' bul does nol 'redicl' is incorrecl. We
say lhal lhe Iav is an exIanalion, nol a rediclion of vhal musl inevilabIy haen. Thal slalemenl is arl of a
definilion of lhe Iav. Il does nol refer lo lhe olenliaI uses of lhe Iav. As I have said, ObviousIy anylhing
lhal can exIain lhe asl successfuIIy can aIso successfuIIy redicl lhe fulure, if lhe fulure is Iike lhe asl.
Lel me seII lhis oul for lhe hard of KIiman: if lhe LTIRI successfuIIy exIains vhy lhe rale of rofil does
lend lo faII in lhe Iong run, and if lhe fulure is Iike lhe asl in lhe reIevanl vays, lhen lhe LTIRI can be used
lo redicl lhal lhe rale of rofil viII aIso lend lo faII in lhe fulure, in lhe Iong run.
carchedi: . lhis is oIilicaIIy disaslrous for revoIulionary marxisls. If ve cannol redicl lhal lhe ROI viII
inevilabIy faII (nol mighl faII), in lhe sense |usl secified above, lhen ve cannol redicl lhal crises viII relurn
lo visil us cycIicaIIy, and so ve imIicilIy hoId lhal crises mighl be avoidabIe.
This is a red herring. Your abiIily lo make a rediclion lhal lhe rale of rofil musl inevilabIy faII is NOT al
issue here. Of course you can make lhal rediclion. I can make a rediclion lhal carchedi's head musl
inevilabIy exIode vhen he reads lhis. The issue is vhelher lhose vho make such a rediclion can IROVI
lhal lheir rediclion musl inevilabIy be correcl, i.e., rove lhal lhe rale of rofil musl inevilabIy faII. I say lhey
can'l. And if lhey can'l, lhen ve have been given insufficienl grounds for acceling lhe cIaim lhal lhe rale of
rofil musl inevilabIy faII, and ve shouIdn'l accel il, and lhey shouIdn'l make il, and having made il, lhey
shouId vilhdrav il. Il is inleIIecluaIIy and oIilicaIIy irresonsibIe nol lo do so. Il rovides ammunilion lo lhe
MR, Heinrich, and olher oonenls of lhe LTIRI and Marx's lheory of cailaIisl crisis.
Il is aIso faIse. If ve cannol redicl lhal lhe ROI viII inevilabIy faII . lhen ve cannol redicl lhal crises viII
relurn lo visil us cycIicaIIy. We can indeed redicl lhe Ialler and our rediclion can indeed be correcl. The
onIy lhing ve can'l do is rove lhal our rediclion MUST INIVITALY be correcl. ul lhe inevilabiIisls
(carchedi, Morh, el aI.) ALSO cannol rove lhal lheir rediclion MUST INIVITALY be correcl.
carchedi has |usl conceded lhal lhey cannol!!! |Ijulure deveIomenls cannol be 'roved', nol even lhal lhe
aIe viII faII lo lhe ground because il has faIIen in lhe asl. Iulure deveIomenls can onIy be 'redicled'. If
lhe rediclion comes lrue, lhe rediclion has been roved correcl afler il has been made. So lhe revised,
carchedi-Iile, cIaim reduces lo The rale of rofil musl inevilabIy faII, II fulure deveIomenls rove lhal il
musl inevilabIy faII. ul II fulure deveIomenls rove lhal il il need nol inevilabIy faII, lhen il need nol
inevilabIy faII. Or as Doris Day ul il, que sera sera. The revised, carchedi-Iile cIaim |usl ISN'T a cIaim lhal
lhe rale of rofil musl inevilabIy faII, much Iess a subslanlialed one. Nor does il leII us anylhing ve didn'l
aIready knov. ul il does have lhe advanlage of nol being vrong.
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Page 25 oI 30
michac! rnbcrts 5ays:
}uIy 27, 2013 al 7:01 m + ReIy
Guys
}usl lo add lo concoclion on lhis debale, I have |usl received some vords from Irof MichaeI Lebovilz on
Heinrich and his oonenls. MichaeI has given me ermission lo osl il here:
The game's afool again nov lhal KIiman and leam have accused MichaeI Heinrich of allacking Marx's CailaI
(The Unmaking of Marx's 'CailaI': Heinrich's Alleml lo IIiminale Marx's Crisis Theory). Il's a curious
game because KIiman el aI have crealed a arlicuIar avalar lo reresenl Marx's CailaI lhrough lheir singIe-
syslem reading (TSSI) of CailaI and lhen have roceeded lo subslilule lhal earlhIy resence for CailaI in aII
lheir vork. Il seems lo generale inleresling and fruilfuI resuIls, and lhal is lo be Iauded.
NeverlheIess, as I commenled here earIier (13 May 2013), 'for me, il is nol consislenl vilh Marx (hovever
invenlive ils malhemalicaI and emiricaI exercises may be). Hovever, if lhe raclilioners of TSSI vere lo
demonslrale lheir consislency vilh Marx's dislinclion belveen form and essence |as in 'lhe rice of
roduclion is aIready a comIeleIy exlernaIized and rima facie irralionaI form of commodily vaIue, a form
lhal aears in comelilion' and rofil is a 'lransformed form of surIus vaIue, a form in vhich ils origin and
lhe secrel of ils exislence are veiIed and obIileraled'j, I mighl lhink differenlIy.'
In effecl, lhe TSSI raclilioners Iace lhe calegory 'Iruil' and lhe each il on lhe same IeveI and lhen
choreograh lheir dance. Nov, as devolees of lhe so-caIIed 'lransformalion robIem' viII recognise, lhey are
nol al aII aIone in lhis. Whal makes lhem unique, lhough, is lhal KIiman el aI lhen roceed lo subslilule lheir
avalar for lhe originaI 'deily', CailaI, in aII lheir discussions. Thus, if lhey can demonslrale lhe consislency of
lheir avalar vilh a concIusion of Marx, lhey announce Marx vas righl! And, if someone is crilicaI of some of
lheir concIusions, lhey announce lhal Marx is under allack.
Such subslilulionism is famiIiar: ve have seen il disIayed dramalicaIIy recenlIy in a oIilicaI organisalion
vhich subsliluled ils ovn raclice for 'Leninism' and lhen announced lhal any crilicism of ils raclice vas an
allack on 'Leninism'.
In conlrasl, Heinrich does offer a reading of Marx far more sensilive lo vhal Marx acluaIIy vrole vhal has
nov been IabeIIed a 'hiIoIogicaI' exercise. In my viev, his recenl MonlhIy Reviev Iress inlroduclion lo
CailaI offers lhe besl underslanding of vhal Marx vas doing, and I vouId assign il lo my cIasses in Marxian
economics (if I vere sliII eddIing my vares in cIassrooms). Heinrich's faiIing, on lhe olher hand, is his Iack of
economic anaIysis of lhose lexls. Thus, in his recenl MonlhIy Reviev arlicIe on lhe 'Iav' of lhe lendency of lhe
rale of rofil lo faII, he slresses lhe osl-1870s drafls of Marx as lhe basis of his uIlimale concIusion lhal Marx
vouId have abandoned lhe 'Iav' |and indeed didj. Hovever, aside from lhe meaning of 'Iav' |vhich, as
Lenin underslood, never Ieaves lhe shere of aearancej, lhe unique condilion necessary for lhe rale of
rofil lo faII vas aIready sel oul by Marx in lhe Grundrisse, amIified exlensiveIy in lhe 1861-3 Mss and noled
in VoI.3 of CailaI as conslrucled by IngeIs and lhe sensilivily of lhal condilion lo reIalive rales of
roduclivily increase can be demonslraled anaIylicaIIy. SimiIarIy (aIlhough Iess germane lo lhe immediale
issues), Heinrich is reared lo concIude from lhe lexls lhal lhere vas no missing book on 'vage-Iabour' bul
doesn'l consider lhe imIicalions of removing lhe assumlion of lhe given IeveI of necessily uon lhe
economic resuIls |incIuding lhe basis for reIalive surIus vaIuej. Through ure hiIoIogy, ve are Iefl vilh a
reroduced arlifacl bul nol much lo vork vilh. Il is an imorlanl slarling oinl bul if il is lhe endoinl, il is a
dead end.
a!!an harris 5ays:
}uIy 27, 2013 al 8:38 m + ReIy
KIiman says lhal Heinrich cIaims Marx said lhal lhere MUST be a faII in lhe rale of rofil and lhal lhe Iav nol
onIy exIains bul aIso redicls lhe faII. KIiman oinls oul lhal Marx never used lhe vord MUST in lhis
conlexl.
Yel, KIiman quoles lhe foIIoving lexl from Marx: The Iav oerales lherefore simIy as a lendency, vhose
effecl is 'DICISIVI' onIy under arlicuIar circumslances and over Iong eriods
This is quibbIing over vords. To say a Iav musl oerale and lhal ils effecl is decisive is a dislinclion vilhoul a
difference. A Iav vhich cIaims lo be scienlific bul vhich cannol exIain and redicl fulure evenls is nol a
scienlific Iav. The Iav of reIalivily redicls lhal lime lraveIs sIover lhe cIoser ils measuremenl is lo a Iarge
source of gravily. Il is exaclIy for lhis reason lhal cIocks in orbil around lhe earlh have lo be eriodicaIIy
sIoved dovn so lhal lhe GIS syslem on ceII hones viII vork.
KIiman exIains lhe reason for lhe decIine: .The lheory exIains lhe cause of lhis facl: lhe accumuIalion of
invesled cailaI has oulslried lhe grovlh of emIoymenl.. This, more or Iess, is lhe same reason given by
Smilh, Ricardo and Marx.
Why nol |usl accel lhal lhe Iav is reaI, lhere is a reaI basis for il in lheory and evidence and lhen defend il`
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Page 26 oI 30
Andrcw K!iman 5ays:
}uIy 27, 2013 al 9:10 m + ReIy
AIIan Harris: You vrile, A Iav vhich cIaims lo be scienlific bul vhich cannol exIain and redicl fulure
evenls is nol a scienlific Iav. I have aIready ansvered lhis. We do nol say lhal lhe Iav cannol be used lo
exIain and redicl fulure evenls. I have said lhe oosile in commenls above. There is a dislinclion
belveen vhal lhe LTIRI is, ils definilion, and ils uses.
Nole lhal Marx says lhal lhe effecl is decisive ONLY UNDIR IARTICULAR CIRCUMSTANCIS (MY
CAIS). There's a big difference belveen lhal lhe cIaim lhal lhe rale of rofil musl inevilabIy faII.
You vrile, Why nol |usl accel lhal lhe Iav is reaI, lhere is a reaI basis for il in lheory and evidence and
lhen defend il` Sure, lhal's vhal ve've done.
a!!an harris 5ays:
}uIy 28, 2013 al 1:16 am
ul is lhere reaIIy a difference in saying lhal lhe rale of cailaIisl rofil has a lendency lo faII over
ossibIy a very Iong lime and saying lhal lhe rale of rofil musl faII` If lhere is a difference lhen lhe
cailaIisls are veII |uslified in saying lhal cailaIism onIy needs lo be ad|usled every nov and lhen lo
kee going.
On anolher asecl of lhe robIem, if lhe rale of rofil is a funclion of lhe change, over lime, in lhe
reIalion of accumuIaled cailaI inveslmenl and emIoymenl lhen il vouId seem lhe decIine in lhe rale
of rofil couId be exressed as a funclion equalion: R f(ca. invesl, em). Modern economisls Iove
lhis lye of malh. Has anyone ever lried lo vork il oul`
5hanc Magc 5ays:
}uIy 28, 2013 al 2:21 am
aIIan harris vriles:On anolher asecl of lhe robIem, if lhe rale of rofil is a funclion of lhe change,
over lime, in lhe reIalion of accumuIaled cailaI inveslmenl and emIoymenl lhen il vouId seem lhe
decIine in lhe rale of rofil couId be exressed as a funclion equalion: R f(ca. invesl, em).
Ixcel lhal lhe shae of your f is ilseIf conslanlIy changing, and lhal change is ilseIf very irreguIar,
AII a modeI can do (and lhal is ilseIf cruciaI) is lo direcl our allenlion lo lhe mosl imorlanl variabIes.
ul aII lhe olher variabIes (ie., hisloricaI reaIily) musl be laken fuIIy inlo accounl in any fuIIy accurale
resenlalion of any conlemorary acluaIily.
sartcsian 5ays:
}uIy 28, 2013 al 2:57 am
ul is lhere reaIIy a difference in saying lhal lhe rale of cailaIisl rofil has a lendency lo faII over
ossibIy a very Iong lime and saying lhal lhe rale of rofil musl faII`
Andrev can ansver for himseIf. As for me, lhe difference is belveen hov cailaIism concreleIy
accumuIales, devaIues, and reslores ilseIf AND an abslraclion lhal insisls lhal cailaI musl coIIase
never recognizing lhal coIIase as such lhen reIaces cIass slruggIe as lhe agenl, lhe sub|ecl for lhe
aboIilion of lhe syslem.
Thal cailaIism can reslore ilseIf is no |uslificalion for lhe nolion lhal cailaIism onIy requires lveaking
or ad|uslmenl. Il's lhe conlenl lo lhal calegory of ad|uslmenl lhal decIares cailaI sociaIIy obsoIele,
sociaIIy unnecessary, nol lhe facl lhal cailaI can ad|usl ilseIf lhal decIares il, cailaI, lhe once and
fulure king.
Thal ad|uslmenl invoIves somelhing more lhan ve've aIready seen il invoIves lhe incineralion of
massive orlions of lhe accumuIaled cailaI, and Iiving Iabor-over.
Andrcw K!iman 5ays:
}uIy 28, 2013 al 8:19 m + ReIy
Ok, I'II ansver for myseIf: I agree enlireIy vilh sarlesian's ansver lo aIIan harris. WeII said! Marx's LTIRI
and his lheory in generaI don'l say lhal lhe rale of rofil musl inevilabIy faII, bul lhis |usl doesn'l imIy
lhal minor lveaking of lhe exisling sociaI reIalions can eIiminale lhe lendency of lhe rale of rofil lo faII,
lhe manifeslalion of lhal lendency as a decIine in lhe rale of rofil, or lhe recurrence of economic sIums
and crises. And lhal is vhal lhe issue acluaIIy is vis-a-vis bourgeois lheory.
InevilabiIism is unnecessary lo everylhing lhal mallers. Slrong varranl for lhe induclive concIusion lhal
lhe LTIRI viII conlinue lo oerale and lhal cailaIisl crises viII recur is aII lhal's needed. Of course, some
eoIe WISH lhal cailaIism viII |usl coIIase on ils ovn, and some of lhem Iike lo exress lhal vish in a
vay lhal masks lhe facl lhal il's |usl a vish, by saying lhal a secuIar decIine in lhe rale of rofil is
absoIuleIy inevilabIe. ul lhey can'l rove lhal il's absoIuleIy inevilabIe and lhey knov lhey can'l (see
carchedi's admission), and lhey can'l even rovide a decenl argumenl lhal il is absoIuleIy inevilabIe. So
il's |usl a doIIed-u vish.
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Page 27 oI 30
sartcsian 5ays:
}uIy 28, 2013 al 9:36 m
This from Andrev: InevilabiIism is unnecessary lo everylhing lhal mallers
Irecise, concise, and IMO, lhe essence of lhe disagreemenl among us vho lhink Marx's emhasis on
lhe significance of lhe lendency of lhe rale of rofil lo faII vas nol misIaced.
MeanvhiIe, I'd Iike lo oinl oul a, so far, overIooked arl of lhe KIiman, Ireeman el aI. aer and lhal
is lhe argumenl lhal vhiIe onIy voIume 1 of CailaI vas ubIished, Marx considered voIumes 2 and 3
lhe book lo be comIele aIlhough in unoIished form. Thal, I lhink, is a very imorlanl argumenl. I
lhink lhal makes sense, given vhal Marx had vrillen revious lo voIume 2 and 3 in his Grundrisse
and olher orlions of lhe Iconomic Manuscrils.
If KIiman el aI are correcl, and I lhink lhey are, il goes arl of lhe vay lovard correcling lhe argumenl
lhal imIies IngeIs maniuIaled Marx's noles lo gel lhe resuIls he, IngeIs, vanled in voIumes 2 and
3.
Andrcw K!iman 5ays:
}uIy 27, 2013 al 9:12 m + ReIy
I meanl lo vrile: There's a big difference belveen lhal AND lhe cIaim lhal lhe rale of rofil musl inevilabIy
faII.
Chnppa Mnrph 5ays:
}uIy 28, 2013 al 2:23 m + ReIy
ImiricaI roof of a lheory resuoses lhal il salisfacloriIy exIains evenls lhal have aIready haened.
Scienlific rediclion of an evenl using a lheory slales lhal il viII haen, if reIevanl recondilions are fuIfiIIed.
If sufficienl reIevanl condilions are mel, lhe occurrence viII have been inevilabIe. To relend lhal lhe sun
von'l rise lomorrov unliI il emiricaIIy does so is evasive cIalra. SociaI-hisloricaI evenls quile naluraIIy
have a more comIicaled sel of recondilions lo lhem lhan aslronomicaI, bul lhal onIy requires more
circumseclion in laking lhem inlo accounl, and a grealer readiness lhal lhings mighl nol go as execled. As
il haens lhough, our obscuranlisl mainslream economisls are comIeleIy unreared for lhings lo go lils-
u, aIlhough lhey have no gras of lhe recondilions invoIved in economic evenls, vhiIe Marxisls Iike
KIiman el aI. vhiIe having a gras of lhe recondilions invoIved in economic evenls lhanks lo lheir oenness
lo Marx's lheory, seem ideoIogicaIIy commilled lo lhings going lils-u for lhe lheory regardIess. This is
conlradiclory and lhe reason I soke of disingenuousness and/or refusaI lo gras nellIes, and invoked lhe
siril of HegeI and lhe diaIeclic, and exorcised lhe lemorizing, scelicaI, agnoslic seclre of Kanl.
In our case, lo bring in lhe dislinclion belveen machines and eoIe, so lo say, vhere economic syslems are
concerned, as Sarlorius makes cIear enough, lhere's a big difference belveen cailaI coIIasing and cailaIism
coIIasing. The cailaIisl rocess of roduclion and circuIalion is fundamenlaIIy a mechanicaI syslem of dead
inuls and oululs eIemenls of congeaIed Iabour, vaIue. Hovever, aII lhese eIemenls arise from and are
allached lo Iiving eoIe, so lhese eoIe have lo submil lo lhe disciIine of lhe machine before il viII vork.
The rocess of forcing submission lo cailaIisl disciIine is vhal Marx anaIyses in lhe Grundrisse and in his
sludy of rimilive cailaIisl accumuIalion in CailaI I.
A consequence of lhis is lhal lhe oeralion of lhe cailaIisl machine and lhe Lav of lhe Tendency of lhe Rale
of Irofil lo IaII reIales direclIy lo lhis has no necessary end-oinl. The end-oinl for cailaI comes vhen
human sociely no Ionger submils lo ils disciIine, for vhalever reason.
The oeralion of lhe cailaIisl mode of roduclion, hovever, is a differenl kellIe of fish and has a necessary
end-oinl, vhich ve usuaIIy summarize as sociaIism or barbarism. Lols of faclors viII be in Iay in lhe
rocess of ending cailaIism, and one of lhe mosl imorlanl viII be lhe faII in lhe rale of rofil for al a
cerlain oinl lhe faII viII be so greal lhal lhe cailaIisl cIass is driven lo deserale sociaI measures lo gel ils
machine back vorking lhe vay il vanls il lo. And even so lhe measures von'l succeed, increasing lhe
ressure and deseralion.
We're relly cIose lo lhal slage nov. In facl lhe vhoIe eoch of imeriaIism is relly much lhal slage
cailaIism having reached lhe eak of ils sociaI-hisloricaI erformance in deveIoing lhe roduclive forces of
human sociely and being incaabIe of making any furlher quaIilalive rogress lhanks lo lhe conlradiclions
belveen lhe rivale arorialion of sociaI veaIlh and ils coIIeclive sociaI roduclion. AII lhe olenliaI
calegories Ialenl in lhe embryo of cailaIism, lhe commodily, have unfoIded and are nov groving back in on
lhemseIves, Iike ingroving loenaiIs or arasilicaI creeers slrangIing and suffocaling lhemseIves.
AII lhis is one reason vhy lhe chaler in CailaI I on Commodily Ielishism mighl veII be lhe mosl imorlanl
chaler in lhe vhoIe vork, hiIosohicaIIy seaking. Il lhrovs inlo briIIianl reIief lhe dislinclion belveen
cailaI as a dead lhing, and Iiving Iabour as lhe source of aII sociaI veaIlh, and lhe inlimale reIalionshi
belveen lhis slale of affairs and lhe robIems caused by lhe necessariIy dislorled and inverled surface
aearance of cailaIism in conlrasl lo ils underIying reaIily of simIe and aII-ervading exIoilalion.
(Which incidenlaIIy is vhy I lhink Geoff IiIIing's book on Marx's lhoughl and cailaI
hll://vvv.marxisls.org/archive/iIIing/vorks/cailaI/ is so fundamenlaI lo our discussion in generaI,
eseciaIIy chaler 5, Some asecls of Marx's nolion of commodily felishism.)
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Page 28 oI 30
sartcsian 5ays:
}uIy 28, 2013 al 2:57 m + ReIy
This:
AII lhis is one reason vhy lhe chaler in CailaI I on Commodily Ielishism mighl veII be lhe mosl
imorlanl chaler in lhe vhoIe vork, hiIosohicaIIy seaking. Il lhrovs inlo briIIianl reIief lhe
dislinclion belveen cailaI as a dead lhing, and Iiving Iabour as lhe source of aII sociaI veaIlh, and lhe
inlimale reIalionshi belveen lhis slale of affairs and lhe robIems caused by lhe necessariIy dislorled and
inverled surface aearance of cailaIism in conlrasl lo ils underIying reaIily of simIe and aII-ervading
exIoilalion.
TolaI agreemenl. Iverylhing foIIovs from chaler 1. If you gel il, you can gel, you buiId for yourseIf,
everylhing lhal foIIovs. If you don'l..
sartcsian 5ays:
}uIy 28, 2013 al 9:43 m + ReIy
So acluaIIy, I'm reaIIy hay vilh lhis discussion. Learned a Iol, gol reined in a bil by Choa on IngeIs, nol
a bad lhing. Iound cerlain oinls of convergence among lhose I disagree vilh in some areas, as veII among
lhose I agree vilh.
a!anIrccman3 5ays:
}uIy 28, 2013 al 10:10 m + ReIy
My commenl on Shane Mage's commenl on H.A. Cox's commenl on my commenl (ause for brealh) didn'l
aear in lhe chronoIogicaI sequence of lhe bIog. So vilh lhe bIog ovner's ermission I am reroducing il
beIov.
So far I have nol seen a coherenl resonse lo refulalion of MiIIer, vhich MichaeI Roberls and I lhink H. A. Cox
bolh endorse. MiIIer had vrillen lhal The rale of rofil musl faII in Iife or lhe lheory is incorrecl. The Iav is
unidireclionaI and irreversibIe.
To lhis I resonded, as Shane Mage righlIy noles:
This is simIy faIse. The Iav is nol unidireclionaI, and il is nol irreversibIe. Al definile limes in hislory, lhe
faII in lhe rale of rofil has been seclacuIarIy reversed.
Cox resonds: This rocess is unidireclionaI unIess you have a var-such as WWII and deslroy hysicaIIy
masses of cailaI. Iven vilh lhis deslruclion, cailaIism did nol relurn lo as lhe OCC and TCC of 1825. This is
lhe onIy exogenous means for Iovering lhe OCC and TCC. There are olher exogenous means for deIaying lhe
breakdovn of cailaIism: exansion of debl, unroduclive inveslmenl such as miIilary buiId-u, inveslmenls
in olher arls of lhe vorId-vhich onIy lransfers lhe conlradiclions on a vider scaIe. ul lhese means disguise
lhe faIIing lhe rale of rofil and cause an increase in roduclive enlerrises exanding beyond vhal lhey
couId have and encourage lechnoIogicaI change and a rise in lhe TCC and OCC, and so on.
In shorl,
(1) The rale of rofil does nol aIvays faII in Iife since under definile circumslances, vhich aear in Iife, il
does nol faII
(2) The Iav is nol unidireclionaI since, on occasions, il moves in lhe oosile direclion
(3) The Iav is nol irreversibIe, since under definile circumslances, il is reversed.
MiIIer's slalemenl is lherefore faIse, by H.A. Cox's ovn admission. You cannol on lhe one hand say lhal lhe
faII reverses under cerlain circumslances, and lhen say 'hovever il is unidireclionaI and irreversibIe'. This is
nol a IogicaIIy lenabIe osilion. Il is equaIIy unlenabIe lo argue lhal il is reaIIy faIIing, even lhough il is in facl
rising, because various means disguise lhe faIIing rale of rofil. If il is disguised, lhen reciseIy il did nol
faII in Iife. This is Iike saying somebody is reaIIy dead, bul lheir dealh has been disguised by lhe facl lhal
lhey are Iiving.
Such resenlalions of Marx's lheory do nol defend lhe Iav al aII bul exose il lo ridicuIe. Marx
undoubledIy heId lhal cailaIism conlained vilhin il conlradiclions lhal il couId nol resoIve, and lhal lhe Iav
of lhe lendenliaI faII of lhe rale of rofil exIained lhe cause of lhe observed hisloricaI lrend of lhe rale of
rofil and reealed exIosions or 'crises' lo vhich lhis gave rise.
If hovever you exress lhis scienlific discovery incorreclIy, for examIe by cIaiming lhal il aIIovs us lo
redicl a 'unidireclionaI and uncondilionaI' faII vhere in facl no such faII is observed, lhe consequence viII be
lhal you cannol defend lhal discovery. Worse sliII, Marx's many delraclors incIuding lhe 'Marxisls vilhoul
Marx' viII Iose no oorlunily lo oinl lo lhe faiIure of your defence as yel more evidence lhal Marx's lheory
is indefensibIe.
Thal is lo say, reciseIy in order lo defend Marx's discoveries, il is necessary lo resenl lhose discoveries
correclIy. Thal is my rofound ob|eclion lo lhe mis-slalemenl of lhose discoveries vhich ve find in lhe aer
of Carchedi and Roberls.
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