Social Scientist. v 6, no. 65 (Dec 1977) p. 47.

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Marxian Political Economy


THIS is the concluding article of the above series. Here we shall first complete our discussion of the sources of economic crises under capitalism. We shall then refer briefly in succession to three important aspects which we have so far not touched upon—namely, the role of money and credit, the features of the imperialist stage of capitalism and developments in contemporary capitalism. We shall close -with some concluding comments.

The Falling Rate of Profit

We had noted last time that the law of the tendency for the rate of profit to decline must be distinguished from other forces that may cause the rate of profit to fall. In particular, a temporary rise in wages brought about by a sharp increase in the rate of accumulation is one important source of such a (transitory) decline in the rate of profit. Marx examines this case at some length in Volume I of Capital. He points out that under certain conditions, se.. . .the scale of accumulation may be suddenly extended . ...the demand for labourers may exceed the supply, and, therefore, wages may rise.991 But while this may lead to a decline in the rate of profit, such a decline will be a rather temporary phenomenon. For accumulation will slacken as soon as profitability is seriously threatened. What is more, the capitalists facing higher wages

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