[OPE-L:5125] Re: RRI and The Rate of Profit

andrew kliman (Andrew_Kliman@msn.com)
Mon, 26 May 1997 23:51:18 -0700 (PDT)

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In response to John's ope-l 5124:

John wrote: "When I discussed "the most important" law, I thought I referring
to Part III of Vol. 3 of CAPITAL. A quick search of that text indicates that
I may be wrong here. (Can anyone find "most important" in that part of

If the words "most important" are there, I've never seen them. But the
substance of the 4th para. of Ch. 13, especially "of great importance ... a
mystery whose solution has been the goal of all political economy since Adam
Smith," is quite similar.

John: "I do note that after Marx began to refer to his own efforts as "a
critique" the law of the falling rate is referred to as one of political
economy. (See letter to Engels 4/30/1868.)"

It is "of" political economy, I think, in the sense that he indicates the the
passage I just quoted. Note that in that passage, as well, Marx distinguishes
between the "phenomenon" and the "law," as is appropriate for a Hegelian:
"Simple as this law appears ... all of political economy has so far had little
success in discovering it .... The economists perceived the phenomenon and
cudgelled their brain in tortuous attempts to interpret it."

John: "1. Is the "law of the tendency of the rate of profit to fall"
(written in 1865) equivalent to "the law of motion of modern
society" (a phrase written in 1867)?"

We'll never know for sure. (BTW, the phrase is "the *economic* law of
motion.") I think that it was part of what Marx had in mind there, but I
also think the absolute general law of capitalist accumuklation and the
collapse of the system might be involved as well. But this is little more
than speculation.

"2. How does the "law of the tendency of the rate of profit to fall" or "the
law of motion of modern society" relate to Marx's idea
that the periodicty of crises should be linked to the turnover of fixed
capital? Indeed, for how long did Marx have this
hypothesis concerning the periodicity of crises?"

I don't know the answer to the last question. With respect to the former, I
think the *tendency* is ever-present. But Marx clearly holds that the
tendency is periodically overcome by means of crises (I have no idea where the
interpretation of the law as a secular trend comes from. Does anyone?).
Capital is devalued, which then raises the profit rate and leads to an upturn.
So to relate turnover to the FRP, one needs an explanation of the link
between devaluation and turnover. Rather than the bunching of investment
being cause and the FRP being effect, it seems more plausible that the reverse
is the case. Even if most machinery tends to last 5 years, or 10 years, etc.,
nothing except general economic conditions would suggest that firms tend to
invest in it at the same time.

Andrew Kliman