On the Falling Rate of Profit

Abstract

Marx’s theory of the law of the tendency of the rate of profit to fall (LTRPF) has been extremely controversial, in terms of its validity, its interpretation and its significance. In this chapter the attempt will be made to outline Marx’s law and to answer some of the criticisms that have been levelled against it. In much of the literature, Marx’s analysis has been treated too simplistically, as a set of algebraic propositions that have been asserted to be correct, incorrect or somewhere in between. On the other hand, Marx’s contribution has often been removed to the realm of high philosophy, in which the law takes on the character of an abstract truth, something derived from the logic of capital itself.