Abstract: 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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Paper 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.
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
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