Falling Rate of Profit and Overaccumulation in Marx and Keynes
AbstractThe question of the long-run prospects of profitability and its association with the stage of capital accumulation have occupied central importance in the history of economic thought. This paper focuses on Marx and Keynes and argues that Marx’s analysis, despite its incomplete nature, is logically consistent in both explaining the falling tendency of the rate of profit as well as the precise mechanism that leads the economy to its crisis stage. Keynes’s analysis, although sketchy, has more in common with Marx and Smith than with Ricardo and neoclassical economics. Furthermore, Keynes’s views on effective demand and the way in which it affects profitability and capital accumulation might be gainfully used for the formulation of a more advanced theory to explain and at the same time direct, within strictly defined limits, the dynamics of capitalist economies.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 35980.
Date of creation: 15 Oct 2005
Date of revision:
Publication status: Published in Political Economy Quarterly 3.43(2006): pp. 65-75
Profitability; accumulation; crisis; Marx; Keynes;
Find related papers by JEL classification:
- E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian
- B12 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Classical (includes Adam Smith)
- 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
- E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical
- E11 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Marxian; Sraffian; Institutional; Evolutionary
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