A foundation Model for Marxian Breakdown Theories Based on a New Falling Rate of Profit Mechanism (Long Version)
AbstractAbstract: The paper presents a foundation model for Marxian theories of the breakdown of capitalism based on a new falling rate of profit mechanism. All of these theories are based on one or more of "the historical tendencies": a rising capital-wage bill ratio, a rising capitalist share and a falling rate of profit. The model is a foundation in the sense that it generates these tendencies in the context of a model with a constant subsistence wage. The newly discovered generating mechanism is based on neo-classical reasoning for a model with land. It is non-Ricardian in that land augmenting technical progress can be unboundedly rapid. Finally, since the model has no steady state, it is necessary to use a new technique, Chaplygin's method, to prove the result.
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Bibliographic InfoPaper provided by Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC) in its series UFAE and IAE Working Papers with number 524.02.
Date of creation: 15 Jul 2002
Date of revision:
Marx; Falling Rate of Profit; Breakdown of Capitalism;
Find related papers by JEL classification:
- B24 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Socialist; Marxist; Scraffian
- E11 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Marxian; Sraffian; Institutional; Evolutionary
- O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
This paper has been announced in the following NEP Reports:
- NEP-ALL-2002-09-11 (All new papers)
- NEP-HPE-2002-09-11 (History & Philosophy of Economics)
- NEP-PKE-2002-09-11 (Post Keynesian Economics)
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- Petith, Howard, 2008. "Land, technical progress and the falling rate of profit," Journal of Economic Behavior & Organization, Elsevier, vol. 66(3-4), pages 687-702, June.
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