IDEAS home Printed from https://ideas.repec.org/a/sae/envira/v22y1990i8p1039-1050.html

Technical Change and the Rate of Profit: An Obituary for Okishio's Theorem

Author

Listed:
  • D L Rigby

    (Department of Geography, University of California, Los Angeles, CA 90024, USA)

Abstract

The effects of technical change on the aggregate rate of profit are unclear. On the one hand, it is argued that laboursaving innovations cause the profit rate to fall. On the other hand, Okishio proved that in an economy where wages are constant and realization problems are assumed away, cost-reducing technical changes must raise the rate of profit. Okishio's theorem presents an important challenge to explanations of industrial and regional restructuring that are premised on the theory of the falling rate of profit. In this paper, Okishio's claims are examined under more general conditions, in particular when wages vary to ensure market clearing. The effects of capital-saving and laboursaving technical changes on the rate of profit are examined. It is shown that Okishio's theorem is not as robust as some have claimed.

Suggested Citation

  • D L Rigby, 1990. "Technical Change and the Rate of Profit: An Obituary for Okishio's Theorem," Environment and Planning A, , vol. 22(8), pages 1039-1050, August.
    • Handle: RePEc:sae:envira:v:22:y:1990:i:8:p:1039-1050
    DOI: 10.1068/a221039
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1068/a221039
    Download Restriction: no
    File URL: https://libkey.io/10.1068/a221039?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
    ---><---

    References listed on IDEAS

    as
    1. Bowles, Samuel, 1981. "Technical Change and the Profit Rate: A Simple Proof of the Okishio Theorem: Note [Technical Change and the Rate of Profit]," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 5(2), pages 183-186, June.
    2. repec:ags:ucdavw:225734 is not listed on IDEAS
    3. Roemer, John E, 1979. "Continuing Controversy on the Falling Rate of Profit: Fixed Capital and Other Issues," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 3(4), pages 379-398, December.
    4. José Alberro & Joseph Persky, 1979. "The Simple Analytics of Falling Profit Rates, Okishio's Theorem and Fixed Capital," Review of Radical Political Economics, Union for Radical Political Economics, vol. 11(3), pages 37-41, October.
    Full references (including those not matched with items on IDEAS)

    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. Deepankar Basu & Oscar Orellana, 2023. "Technical change, constant rate of exploitation and falling rate of profit in linear production economies," Metroeconomica, Wiley Blackwell, vol. 74(3), pages 512-530, July.
    2. M Webber & D Rigby, 1999. "Accumulation and the Rate of Profit: Regulating the Macroeconomy," Environment and Planning A, , vol. 31(1), pages 141-164, January.
    3. Stefano Di Bucchianico, 2019. "The Impact of Financialization on the Rate of Profit: A Discussion," Centro Sraffa Working Papers CSWP36, Centro di Ricerche e Documentazione 'Piero Sraffa'.
    4. Naoki Yoshihara & Roberto Veneziani, 2013. "The Measurement of Labour Content: A General Approach," Working Papers 704, Queen Mary University of London, School of Economics and Finance.
    5. Mariolis, Theodore, 2010. "Κριτική Έκθεση του "Νόμου της Πτωτικής Τάσης του Ποσοστού Κέρδους" του K. Marx: Κατανομή Εισοδήματος, Επισώρευση Κεφαλαίου και Τεχνολογική Μεταβολή στη Μακρά Περίοδο [Critical Exposition of The Marxian 'Law of the Falling Rate of Profit'," MPRA Paper 22461, University Library of Munich, Germany.
    6. Vaona, Andrea, 2011. "Profit rate dynamics, income distribution, structural and technical change in Denmark, Finland and Italy," Structural Change and Economic Dynamics, Elsevier, vol. 22(3), pages 247-268, September.
    7. Freeman, Alan, 1994. "Value and the foundation of Economic Dynamics," MPRA Paper 1206, University Library of Munich, Germany, revised 16 Mar 1994.
    8. Deepankar Basu & Oscar Orellana, 2022. "Marx after Okishio: Falling Rate of Profit with Constant Rate of Exploitation," Papers 2205.08956, arXiv.org, revised May 2022.
    9. A C Lea, 1990. "Rates of Interest: A Review," Environment and Planning A, , vol. 22(8), pages 1073-1078, August.
    10. Edward N. Wolff, 2000. "What's Behind the Recent Rise in Profitability?," Macroeconomics 0004044, University Library of Munich, Germany.
    11. Junshang Liang, 2021. "The Falling Rate of Profit under Constant Rate of Exploitation: A Generalization," Review of Radical Political Economics, Union for Radical Political Economics, vol. 53(3), pages 501-510, September.
    12. Yoshihara, Naoki & Veneziani, Roberto, 2023. "The general equilibrium effects of localised technological progress: A Classical approach," Journal of Mathematical Economics, Elsevier, vol. 109(C).
    13. Geoffrey Hodgson, 2004. "Some claims made for critical realism in economics: two case studies," Journal of Economic Methodology, Taylor & Francis Journals, vol. 11(1), pages 53-73.
    14. Chong Liu & Bangxi Li & Jim Huangnan Shen, 2025. "Accelerated depreciation and investment-driven growth: a Marx-Okishio approach," Evolutionary and Institutional Economics Review, Springer, vol. 22(1), pages 181-211, April.
    15. Jiyuan Lyu, 2025. "The Falling Rate of Profit under Fixed Capital and Stable Labor Shares," Papers 2509.11538, arXiv.org, revised Mar 2026.
    16. Robin Eric Hahnel, 2021. "Response to Moseley," Review of Radical Political Economics, Union for Radical Political Economics, vol. 53(3), pages 525-534, September.
    17. Fred Moseley, 2021. "A Marxian Reply to Hahnel: The Relative Explanatory Power of Marx’s Theory and Sraffa’s Theory," Review of Radical Political Economics, Union for Radical Political Economics, vol. 53(3), pages 511-524, September.
    18. Claudio Sardoni, 2011. "Unemployment, Recession and Effective Demand," Books, Edward Elgar Publishing, number 13837, June.
    19. Freeman, Alan, 1994. "Reappraising the classics - the case for a dynamic reformulation of the labour theory of value," MPRA Paper 1205, University Library of Munich, Germany.
    20. Satya Prasad Padhi, 2021. "Employment dynamics, increasing returns and Marx's falling rate of profit," PSL Quarterly Review, Economia civile, vol. 74(298), pages 219-245.

    More about this item

    Statistics

    Access and download statistics

    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:sae:envira:v:22:y:1990:i:8:p:1039-1050. 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: SAGE Publications (email available below). General contact details of provider: .

    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.