Revisiting Adam Smith’s Theory of the Falling Rate of Profit
AbstractSmith’s theory of the falling rate of profit has been usually interpreted as a result of the intensification of competition in the markets of goods and services of the factors of production. This aspect of Adam Smith had been initially posed by Ricardo and subsequently was widely adopted by the major economists of the past as well as from the majority of the modern historians of economic thought. In our view, Smith’s analysis of the falling tendency in the rate of profit is by far more complex than usually presented and that the intensification of competition is the result of the falling rate of profit rather than its cause which is the capitalization of the production process.
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Bibliographic InfoPaper provided by Department of Economics, University of Macedonia in its series Discussion Paper Series with number 2011_18.
Date of creation: Nov 2011
Date of revision: Nov 2011
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Rate of Profit; competition; mechanization; Adam Smith; Stationary State.;
Other versions of this item:
- Lefteris Tsoulfidis & Dimitris Paitaridis, 2012. "Revisiting Adam Smith's theory of the falling rate of profit," International Journal of Social Economics, Emerald Group Publishing, vol. 39(5), pages 304-313, May.
- B10 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - General
- B12 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Classical (includes Adam Smith)
- B13 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Neoclassical through 1925 (Austrian, Marshallian, Walrasian, Stockholm School)
- B14 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Socialist; Marxist
- B16 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Quantitative and Mathematical
- H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-12-13 (All new papers)
- NEP-HIS-2011-12-13 (Business, Economic & Financial History)
- NEP-HME-2011-12-13 (Heterodox Microeconomics)
- NEP-HPE-2011-12-13 (History & Philosophy of Economics)
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- Blaug,Mark, 1997. "Economic Theory in Retrospect," Cambridge Books, Cambridge University Press, number 9780521577014, November.
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