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The Falling Rate of Profit under Constant Rate of Exploitation: A Generalization

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  • Junshang Liang

Abstract

In a two-sector model with circulating capital, Laibman (1982) shows that a capital-using and labor-saving technical change in the consumption goods sector lowers the rate of profit under the assumption of constant rate of exploitation. This paper generalizes his finding in a two-department multi-sector model that considers the capital advanced. JEL Classification : B51, C67

Suggested Citation

  • 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.
    • Handle: RePEc:sae:reorpe:v:53:y:2021:i:3:p:501-510
    DOI: 10.1177/04866134211005881
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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. Joan Robinson, 1966. "An Essay on Marxian Economics," Palgrave Macmillan Books, Palgrave Macmillan, edition 0, number 978-1-349-15228-5.
    3. Shaikh, Anwar, 1980. "Marxian Competition versus Perfect Competition: Further Comments on the So-Called Choice of Technique," Cambridge Journal of Economics, Oxford University Press, vol. 4(1), pages 75-83, March.
    4. Bidard, Christian, 1988. "The Falling Rate of Profit and Joint Production," Cambridge Journal of Economics, Oxford University Press, vol. 12(3), pages 355-360, September.
    5. Roemer, John E, 1978. "The Effect of Technological Change on the Real Wage and Marx's Falling Rate of Profit," Australian Economic Papers, Wiley Blackwell, vol. 17(30), pages 152-166, June.
    6. Roemer, John E, 1979. "Continuing Controversy on the Falling Rate of Profit: Fixed Capital and Other Issues," Cambridge Journal of Economics, Oxford University Press, vol. 3(4), pages 379-398, December.
    7. Shaikh, Anwar, 1978. "Political Economy and Capitalism: Notes on Dobb's Theory of Crisis," Cambridge Journal of Economics, Oxford University Press, vol. 2(2), pages 233-251, June.
    8. Reiner Franke, 1999. "Technical Change and a Falling Wage Share if Profits are Maintained," Metroeconomica, Wiley Blackwell, vol. 50(1), pages 35-53, February.
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    Cited by:

    1. 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.
    2. 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.

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    More about this item

    Keywords

    falling rate of profit; technical change; constant rate of exploitation;
    All these keywords.

    JEL classification:

    • B51 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Socialist; Marxian; Sraffian
    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models

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