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Land, technical progress and the falling rate of profit

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  • Petith, Howard

Abstract

The paper sets out a one sector growth model with a neoclassical production function in land and a capital-labour aggregate. If the elasticity of substitution between land and the capital-labour aggregate is less than one and if the rate of capital augmenting technical progress is strictly positive, then the rate of profit will fall to zero. This result holds regardless of the rate of land augmenting technical progress: no amount of technical advance in agriculture can stop the fall in the rate of profit. The paper also discusses the relation of this result to the classical and Marxist literature.

Suggested Citation

  • 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.
    • Handle: RePEc:eee:jeborg:v:66:y:2008:i:3-4:p:687-702
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    References listed on IDEAS

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    1. Gilbert L. Skillman, 1997. "Technical Change and the Equilibrium Profit Rate in a Market with Sequential Bargaining," Metroeconomica, Wiley Blackwell, vol. 48(3), pages 238-261, October.
    2. Howard Petith, 2002. "A foundation Model for Marxian Breakdown Theories Based on a New Falling Rate of Profit Mechanism (Long Version)," UFAE and IAE Working Papers 524.02, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
    3. Howard Petith, 2002. "A Foundation Model for Marxian Breakdown Theories Based on a New Falling Rate of Profit Mechanism," UFAE and IAE Working Papers 516.02, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
    4. Peter Skott, 1992. "Imperfect Competition and the Theory of the Falling Rate of Profit," Review of Radical Political Economics, Union for Radical Political Economics, vol. 24(1), pages 101-113, March.
    5. Foley, Duncan K., 2003. "Endogenous technical change with externalities in a classical growth model," Journal of Economic Behavior & Organization, Elsevier, vol. 52(2), pages 167-189, October.
    6. Thomas R. Michl, 1994. "Three Models of the Falling Rate of Profit," Review of Radical Political Economics, Union for Radical Political Economics, vol. 26(4), pages 55-75, December.
    7. Dumenil, Gerard & Levy, Dominique, 2003. "Technology and distribution: historical trajectories a la Marx," Journal of Economic Behavior & Organization, Elsevier, vol. 52(2), pages 201-233, October.
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    1. Roberto Veneziani & Luca Zamparelli & Amitava Krishna Dutt, 2017. "Heterodox Theories Of Economic Growth And Income Distribution: A Partial Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 31(5), pages 1240-1271, December.
    2. Amitava Krishna Dutt & Roberto Veneziani, 2010. "A Classical-Marxian Model Of Education, Growth And Distribution," UMASS Amherst Economics Working Papers 2010-10, University of Massachusetts Amherst, Department of Economics.
    3. Kander, Astrid & Stern, David I., 2014. "Economic growth and the transition from traditional to modern energy in Sweden," Energy Economics, Elsevier, vol. 46(C), pages 56-65.
    4. Amitava Krishna Dutt & Roberto Veneziani, 2019. "Education and ‘human capitalists’ in a classical-Marxian model of growth and distribution," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 43(2), pages 481-506.

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