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Falling Rate of Profit and Overaccumulation in Marx and Keynes

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  • Tsoulfidis, Lefteris

Abstract

The question of the long-run prospects of profitability and its association with the stage of capital accumulation have occupied central importance in the history of economic thought. This paper focuses on Marx and Keynes and argues that Marx’s analysis, despite its incomplete nature, is logically consistent in both explaining the falling tendency of the rate of profit as well as the precise mechanism that leads the economy to its crisis stage. Keynes’s analysis, although sketchy, has more in common with Marx and Smith than with Ricardo and neoclassical economics. Furthermore, Keynes’s views on effective demand and the way in which it affects profitability and capital accumulation might be gainfully used for the formulation of a more advanced theory to explain and at the same time direct, within strictly defined limits, the dynamics of capitalist economies.

Suggested Citation

  • Tsoulfidis, Lefteris, 2005. "Falling Rate of Profit and Overaccumulation in Marx and Keynes," MPRA Paper 35980, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:35980
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    File URL: https://mpra.ub.uni-muenchen.de/35980/1/MPRA_paper_35980.pdf
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    References listed on IDEAS

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    1. Barnett, Vincent, 2001. "Tugan-Baranovsky as a Pioneer of Trade Cycle Analysis," Journal of the History of Economic Thought, Cambridge University Press, vol. 23(4), pages 443-466, December.
    2. Glyn, Andrew & Hughes, Alan & Lipietz, Alan & Sigh, Ajit, "undated". "The Rise and Fall of the Golden Age," WIDER Working Papers 295573, United Nations University, World Institute for Development Economic Research (UNU-WIDER).
    3. Schefold, Bertram, 1976. "Different Forms of Technical Progress," Economic Journal, Royal Economic Society, vol. 86(344), pages 806-819, December.
    4. Garegnani, Pierangelo, 1979. "Notes on Consumption, Investment and Effective Demand: II," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 3(1), pages 63-82, March.
    5. Robert W. Dimand, 1995. "Irving Fisher, J. M. Keynes, and the Transition to Modern Macroeconomics," History of Political Economy, Duke University Press, vol. 27(5), pages 247-266, Supplemen.
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    Cited by:

    1. Papageorgiou, Aris & Tsoulfidis, Lefteris, 2006. "Kondratiev, Marx and the long cycle," MPRA Paper 31355, University Library of Munich, Germany, revised 10 May 2012.

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    More about this item

    Keywords

    Profitability; accumulation; crisis; Marx; Keynes;
    All these keywords.

    JEL classification:

    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • B12 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Classical (includes Adam Smith)
    • B14 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Socialist; Marxist
    • B16 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Quantitative and Mathematical
    • E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical
    • E11 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Marxian; Sraffian; Kaleckian

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