IDEAS home Printed from https://ideas.repec.org/a/eee/streco/v57y2021icp148-158.html
   My bibliography  Save this article

The dynamics of capital accumulation in Marx and Solow

Author

Listed:
  • Nikolaos, Chatzarakis
  • Tsaliki, Persefoni

Abstract

This paper deals with issues arising in Solow's growth model when contrasted with Marx's schemes of expanded reproduction. More specifically, we argue that Solow's growth model lacks the crucial dynamic features of capital accumulation derived from the long-term movement of the rate of profit, which are well integrated in classical political economy. Classical economists discussed the attainment of the stationary state of the economy as a result of a falling rate of profit eliminating net investment. In Solow's growth model, however, the seemingly stationary state is proved to be a ‘saddle’ point, an aspect that has not received appropriate attention in the extant economic growth literature. By contrast, in Marx's analysis of absolute overaccumulation resulting from the falling profit rate the system is driven to a turning point and the conditions for major institutional changes that may lead to a new period of economic expansion are set.

Suggested Citation

  • Nikolaos, Chatzarakis & Tsaliki, Persefoni, 2021. "The dynamics of capital accumulation in Marx and Solow," Structural Change and Economic Dynamics, Elsevier, vol. 57(C), pages 148-158.
    • Handle: RePEc:eee:streco:v:57:y:2021:i:c:p:148-158
    DOI: 10.1016/j.strueco.2021.03.003
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0954349X21000254
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.strueco.2021.03.003?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Lefteris Tsoulfidis & Persefoni Tsaliki, 2014. "Unproductive labour, capital accumulation and profitability crisis in the Greek economy," International Review of Applied Economics, Taylor & Francis Journals, vol. 28(5), pages 562-585, September.
    2. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    3. Brent Neiman, 2014. "The Global Decline of the Labor Share," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 129(1), pages 61-103.
    4. Lefteris Tsoulfidis & Persefoni Tsaliki, 2019. "Classical Political Economics and Modern Capitalism," Springer Books, Springer, number 978-3-030-17967-0, September.
    5. A. Shaikh, 1991. "Wandering Around the Warranted Path: Dynamic Nonlinear Solutions to the Harrodian Knife-Edge," Palgrave Macmillan Books, in: Edward J. Nell & Willi Semmler (ed.), Nicholas Kaldor and Mainstream Economics, chapter 18, pages 320-334, Palgrave Macmillan.
    6. Shaikh, Anwar, 2016. "Capitalism: Competition, Conflict, Crises," OUP Catalogue, Oxford University Press, number 9780199390632.
    7. R. M. Solow & J. Tobin & C. C. Weizsäcker & M. Yaari, 1971. "Neoclassical Growth with Fixed Factor Proportions," Palgrave Macmillan Books, in: F. H. Hahn (ed.), Readings in the Theory of Growth, chapter 9, pages 68-102, Palgrave Macmillan.
    8. Shaikh, Anwar, 1974. "Laws of Production and Laws of Algebra: The Humbug Production Function," The Review of Economics and Statistics, MIT Press, vol. 56(1), pages 115-120, February.
    9. William Darity, Jr, 2009. "More Cobwebs? Robert Solow, Uncertainty, and the Theory of Distribution," History of Political Economy, Duke University Press, vol. 41(5), pages 149-160, Supplemen.
    10. Persefoni V. Tsaliki, 2009. "Economic development and unemployment: do they connect?," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 36(7), pages 773-781, June.
    11. Hiroaki Sasaki, 2013. "Cyclical growth in a Goodwin–Kalecki–Marx model," Journal of Economics, Springer, vol. 108(2), pages 145-171, March.
    12. Ken-ichi Inada, 1963. "On a Two-Sector Model of Economic Growth: Comments and a Generalization," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 30(2), pages 119-127.
    13. Edward J. Nell & Willi Semmler (ed.), 1991. "Nicholas Kaldor and Mainstream Economics," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-349-10947-0.
    14. Lee, Kevin & Pesaran, M Hashem & Smith, Ron, 1997. "Growth and Convergence in Multi-country Empirical Stochastic Solow Model," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 12(4), pages 357-392, July-Aug..
    15. Raford Boddy & James R. Crotty & James R. Crotty, 1976. "Wages, Prices, and the Profit Squeeze," Review of Radical Political Economics, Union for Radical Political Economics, vol. 8(2), pages 63-67, July.
    16. David Cass, 1965. "Optimum Growth in an Aggregative Model of Capital Accumulation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 32(3), pages 233-240.
    17. John S.L. McCombie, 2000. "The Solow Residual, Technical Change, and Aggregate Production Functions," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 23(2), pages 267-297, December.
    18. Wolff,Edward N., 1987. "Growth, Accumulation, and Unproductive Activity," Cambridge Books, Cambridge University Press, number 9780521251518.
    19. Anwar Shaikh, 1992. "The Falling Rate of Profit as the Cause of Long Waves: Theory and Empirical Evidence," Palgrave Macmillan Books, in: Alfred Kleinknecht & Ernest Mandel & Immanuel Wallerstein (ed.), New Findings in Long-Wave Research, chapter 7, pages 174-202, Palgrave Macmillan.
    20. Thanasis Maniatis, 2012. "Marxist Theories of Crisis and the Current Economic Crisis," Forum for Social Economics, Taylor & Francis Journals, vol. 41(1), pages 6-29, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Chatzarakis, Nikolaos & Tsaliki, Persefoni, 2022. "Harrodian Instability: A Marxian Perspective," MPRA Paper 113852, University Library of Munich, Germany.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Chatzarakis, Nikolaos & Tsaliki, Persefoni, 2022. "Harrodian Instability: A Marxian Perspective," MPRA Paper 113852, University Library of Munich, Germany.
    2. Mark Knell & Simone Vannuccini, 2022. "Tools and concepts for understanding disruptive technological change after Schumpeter," Jena Economics Research Papers 2022-005, Friedrich-Schiller-University Jena.
    3. Dario Cords & Klaus Prettner, 2022. "Technological unemployment revisited: automation in a search and matching framework [The future of work: meeting the global challenges of demographic change and automation]," Oxford Economic Papers, Oxford University Press, vol. 74(1), pages 115-135.
    4. Fabrice Collard & Omar Licandro, 2020. "The neoclassical model and the welfare costs of selection," Discussion Papers 2020/03, University of Nottingham, Centre for Finance, Credit and Macroeconomics (CFCM).
    5. Lankisch, Clemens & Prettner, Klaus & Prskawetz, Alexia, 2017. "Robots and the skill premium: An automation-based explanation of wage inequality," Hohenheim Discussion Papers in Business, Economics and Social Sciences 29-2017, University of Hohenheim, Faculty of Business, Economics and Social Sciences.
    6. Lankisch, Clemens & Prettner, Klaus & Prskawetz, Alexia, 2019. "How can robots affect wage inequality?," Economic Modelling, Elsevier, vol. 81(C), pages 161-169.
    7. Tania Karamisheva, 2021. "Measuring the Business Cycle in Bulgaria," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 3, pages 17-38.
    8. Roberto Duncan & J. Rodrigo Fuentes, 2005. "Convergencia Regional en Chile: Nuevos Tests, Viejos Resultados," Working Papers Central Bank of Chile 313, Central Bank of Chile.
    9. Klarl, Torben, 2022. "Fragile robots, economic growth and convergence," Economic Modelling, Elsevier, vol. 112(C).
    10. Ekkehart Schlicht, 2016. "Directed Technical Change and Capital Deepening: A Reconsideration of Kaldor's Technical Progress Function," Metroeconomica, Wiley Blackwell, vol. 67(1), pages 119-151, February.
    11. Hulten, Charles R., 2010. "Growth Accounting," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 2, chapter 0, pages 987-1031, Elsevier.
    12. Nikolaos Th. Chatzarakis, 2021. "Revisiting the role and consequences of Econophysics from a Marxian perspective," Bulletin of Political Economy, Bulletin of Political Economy, vol. 15(1), pages 45-68, June.
    13. Tsoulfidis, Lefteris & Papageorgiou, Aris, 2017. "The Recurrence of Long Cycles: Theories, Stylized Facts and Figures," MPRA Paper 82853, University Library of Munich, Germany, revised 11 Nov 2017.
    14. Abeliansky, Ana Lucia & Prettner, Klaus, 2017. "Automation and demographic change," VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168215, Verein für Socialpolitik / German Economic Association.
    15. Peter J. Stauvermann & Ronald R. Kumar, 2022. "Does more market competition lead to higher income and utility in the long run?," Bulletin of Economic Research, Wiley Blackwell, vol. 74(3), pages 761-782, July.
    16. Alex Gymnopoulos & Thanos Poulakis & Haris Poulakis & Nikolaos Chatzarakis, 2021. "Investigating the Greek Unemployment from a Classical Perspective," Bulletin of Political Economy, Bulletin of Political Economy, vol. 15(1), pages 69-91, June.
    17. Torben Klarl, 2022. "Fragile Robots, Economic Growth and Convergence," Bremen Papers on Economics & Innovation 2202, University of Bremen, Faculty of Business Studies and Economics.
    18. Thomas Gries, 2020. "A New Theory of Demand-Restricted Growth: The Basic Idea," The American Economist, Sage Publications, vol. 65(1), pages 11-27, March.
    19. Jan Mikael Malmaeus, 2016. "Economic Values and Resource Use," Sustainability, MDPI, vol. 8(5), pages 1-20, May.
    20. Minea, Alexandru, 2008. "The Role of Public Spending in the Growth Theory Evolution," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 5(2), pages 99-120, June.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:streco:v:57:y:2021:i:c:p:148-158. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/525148 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.