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A General Refutation of Okishio’s Theorem and a Proof of the Falling Rate of Profit

In: Marxian Economics: A Reappraisal

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  • Alan Freeman

Abstract

It is almost universally believed that Okishio’s (1961) justly celebrated theorem disproves Marx’s analysis of the tendency of the profit rate to fall, by showing that if real wages stay constant the rate of profit rises as a result of productivity-enhancing technical change. All attempted refutations accept Okishio’s approach which like many others, notably the surplus approach school, is based a system of simultaneous linear equalities.

Suggested Citation

  • Alan Freeman, 1998. "A General Refutation of Okishio’s Theorem and a Proof of the Falling Rate of Profit," Palgrave Macmillan Books, in: Riccardo Bellofiore (ed.), Marxian Economics: A Reappraisal, chapter 10, pages 139-162, Palgrave Macmillan.
    • Handle: RePEc:pal:palchp:978-1-349-26121-5_10
    DOI: 10.1007/978-1-349-26121-5_10
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    References listed on IDEAS

    as
    1. Harcourt,G. C., 1972. "Some Cambridge Controversies in the Theory of Capital," Cambridge Books, Cambridge University Press, number 9780521096720.
    2. Lipietz, Alain, 1982. "The so-called "transformation problem" revisited," Journal of Economic Theory, Elsevier, vol. 26(1), pages 59-88, February.
    3. Richard D. Wolff & Bruce Roberts & Antonino Callari, 1982. "Marx's (not Ricardo's) ‘Transformation Problem’: A Radical Reconceptualization," History of Political Economy, Duke University Press, vol. 14(4), pages 564-582, Winter.
    4. José Alberro & Joseph Persky & José Alberro & Joseph Persky, 1981. "The Dynamics of Fixed Capital Revaluation and Scrapping," Review of Radical Political Economics, Union for Radical Political Economics, vol. 13(2), pages 32-37, July.
    5. Mohun, Simon, 1994. "A Re(in)statement of the Labour Theory of Value," Cambridge Journal of Economics, Oxford University Press, vol. 18(4), pages 391-412, August.
    6. Duncan K. Foley, 1982. "The Value of Money the Value of Labor Power and the Marxian Transformation Problem," Review of Radical Political Economics, Union for Radical Political Economics, vol. 14(2), pages 37-47, June.
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    Cited by:

    1. Mohun, Simon & Veneziani, Roberto, 2009. "The temporal single-system interpretation: underdetermination and inconsistency," MPRA Paper 30452, University Library of Munich, Germany.
    2. Kliman, Andrew & Freeman, Alan & Potts, Nick & Gusev, Alexey & Cooney, Brendan, 2013. "The Unmaking of Marx’s Capital: Heinrich’s Attempt to Eliminate Marx’s Crisis Theory," MPRA Paper 48535, University Library of Munich, Germany, revised 22 Jul 2013.

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    More about this item

    Keywords

    Total Stock; Profit Rate; Transformation Problem; General Equilibrium Theory; Simultaneous System;
    All these keywords.

    JEL classification:

    • B50 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - General
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
    • B24 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Socialist; Marxist; Scraffian
    • B51 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Socialist; Marxian; Sraffian
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • B20 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - General

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