Falling Rate of Profit and Overaccumulation in Marx and Keynes

Tsoulfidis, Lefteris (2005): Falling Rate of Profit and Overaccumulation in Marx and Keynes. Published in: Political Economy Quarterly , Vol. 43, No. 3 (2006): pp. 65-75.

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.

• Item Type: MPRA Paper
• Language: English
• Keywords: Profitability, accumulation, crisis, Marx, Keynes
• Subjects: E - Macroeconomics and Monetary Economics > E1 - General Aggregative Models > E12 - Keynes ; Keynesian ; Post-Keynesian; B - History of Economic Thought, Methodology, and Heterodox Approaches > B1 - History of Economic Thought through 1925 > B12 - Classical (includes Adam Smith); B - History of Economic Thought, Methodology, and Heterodox Approaches > B1 - History of Economic Thought through 1925 > B14 - Socialist ; Marxist; B - History of Economic Thought, Methodology, and Heterodox Approaches > B1 - History of Economic Thought through 1925 > B16 - Quantitative and Mathematical; E - Macroeconomics and Monetary Economics > E1 - General Aggregative Models > E13 - Neoclassical; E - Macroeconomics and Monetary Economics > E1 - General Aggregative Models > E11 - Marxian ; Sraffian ; Kaleckian

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