Alex Callinicos and Joseph Choonara: HOW NOT TO WRITE ABOUT THE RATE OF PROFIT: A REPLY TO DAVID HARVEY - 21 May 2015

Alex Callinicos and Joseph Choonara
HOW NOT TO WRITE ABOUT THE RATE OF PROFIT: A REPLY TO DAVID HARVEY

Read more @ thenextrecession.files

It is hard to think of any living writer who has made a greater contribution to Marxist political economy than David Harvey. We can see this in his broad attempt to widen Marxist social theory to take space properly into account, forming a new “historical-geographical materialism”; in his work, The Limits to Capital, one of the most important products of the 1960s and 1970s generation’s engagement with Marx’s Capital; in his hugely influential critical return to the classical Marxist theory of imperialism in The New Imperialism; and, finally, in his online lectures and book commentaries on Capital.

So it is a real pity that he has chosen to write so negatively—and, to be frank, so poorly—about the tendency of the rate of profit to fall (TRPF) in different versions of a paper that is due to be published but that is already making the rounds online (Harvey, 2015a). Harvey is intervening in a debate that has been going on among Marxist political economists for some time but that appears to be hotting up. There seem to be two reasons for this. First, the publication of the manuscripts of the third volume of Capital in the Marx-Engels Gesamtausgabe (MEGA²) has given rise to the entirely spurious argument that Marx abandoned the theory of the TRPF after writing the main text in 1864-5 (it is typical of Harvey’s scattergun approach than he welcomes this argument while declaring his ignorance of German prevents him from taking a stand on the scholarship: Harvey, 2015a: 5). 

Second, and much more importantly, we have a (continuing) crisis to explain. Marxist political economists are divided over whether the profound, systemic crisis of capitalism that exploded in 2007-8 has to be understood starting from the TRPF or, typically, through some combination of underconsumptionism and the kinds of theories of the financialisation of capitalism that have become current in recent years. One reason why this debate is so important is that even the more intelligent bourgeois economists acknowledge that the recovery from the Great Recession has revealed that something has gone badly wrong with capitalism. (...)

Read more @ Michael Roberts :: HERE

DAVID HARVEY: CRISIS THEORY AND THE FALLING RATE OF PROFIT (This is a draft of an essay to be published in 2015 in: The Great Meltdown of 2008: Systemic, Conjunctural or Policy-created?)

DAVID HARVEY:
CRISIS THEORY AND THE FALLING RATE OF PROFIT 

Read more @ thenextrecession

This is a draft of an essay to be published in 2015 in:

The Great Meltdown of 2008: Systemic, Conjunctural or Policy-created? 
Editors: Turan Subasat (Izmir University of Economics) and John Weeks (SOAS, University of London); Publisher: Edward Elgar Publishing Limited


In the midst of crises, Marxists frequently appeal to the theory of the tendency of the rate of profit to fall as an underlying explanation.1 In a recent presentation, for example, Michael Roberts attributes the current long depression to this tendency.2 
The tendency/law operates as follows:
1) Competition forces capitalist producers to invest in labour-saving technologies in order to preserve market share.
2) The value of the means of production consumed (c, the constant capital) tends to outstrip the value of labour power (v, the variable capital) employed.
3) The ratio of constant to variable capital employed (the productivity or value composition of capital, c/v) rises. If the rate of exploitation (s/v, the ratio of surplus value produced to variable capital employed) is unchanged, then the rate of profit, (s/c+v) will fall.
4) There are, however, counteracting tendencies. The rate of exploitation of labour power can rise. Constant capital can become cheaper with increased productivity in the sectors supplying machinery, raw materials and intermediate products. But these counteracting tendencies are insufficient, it is held, to offset the downward trend in the profit rate in the long run. “Thus,” Roberts concludes, “profitability tends to fall and capitalism tends towards crises, a movement interrupted only by short periods of growth.”  (...)

(Read more @The Next Recession blog)

Notes

1. 1  Among others see Carchedi, G., Behind the Crisis: Marx’s Dialectics of Value and Knowledge, Brill, Leiden, 2011; Kliman, A., The Failure of Capitalist Production: Underlying Causes of the Great Recession, London, Pluto Press, 2011; Shaikh, A., “The First Great Depression of the 21st century,” (see http://homepage.newschool.edu/~AShaikh/); Moseley, F., The Falling Rate of Profit in the Postwar United States Economy. New York: St. Martin’s Press, 1990; Maito, Esteban Ezequiel, “The Historical Transience of Capital: The Downward Trend in the Rate of Profit since XIX Century,” unpublished paper, University of Buenos Aires, Argentina, n.d.
   
   
2. 2  Power point presentation: Michael Roberts, “The Nature of Current Long Depression,” Marxism 2014; 11 July 2014 
   

Oct2014 David Harvey - A commentary on the falling rate of profit in Marx’s crisis theory @ Izmir University of Economics - Workshop on “The Great Meltdown of 2008: Systemic, Conjunctural or Policy-created?”

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