[OPE-L:5167] TRPF

Michael Williams (mwilliam@compuserve.com)
Mon, 2 Jun 1997 15:49:25 -0700 (PDT)

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> Three short questions related with your comments on my post.
> (1) Is there any sentence which 'directly' supports your and Fine's
> interpretation of TRPF in Marx's work?

Michael W
There may not be ( I'm still looking), but:
Here is something helpful: "We see here once again how the same factors
produce the tendency for the rate of profit to fall also moderate the
realisation of this tendency." Marx 1894 (Penguin): 343. And then, what
grounds does Marx offer that this 'moderation' might not quantitatively
overwhelm the tendency? Not very direct, I know, so here are a few more
comments about what informs my Hegelian-Marxist critique of economics:
a) Whilst it is useful to show that some development of the Marxist
critique of modern economics (and so of fin de millennium capitalism) is in
keeping with Marx's own work, it is not crucial that this can always be
b) In Marx's day it was almost universally accepted as a 'stylised fact'
that the rate of profit manifested a falling trend empirically (see, eg,
Jevons, 1871, Cannan, 1893, Schumpeter, 1954, Dobb, 1973). So Marx may well
have felt able to focus on an explanation compatible with his own dynamics
of what was to him an uncontroversial empirical trend. In which case, the
*direct* textual evidence you seek may be hard to come by. Today the
empirical evidence is tenuous and highly controversial (including amongst
those authors that you cite, below). One consequence of this is that we (to
a greater extent than Marx) are faced with difficult questions of
epistemological criteria and ontological commitment. If we take the *law of
the tendency of the rate of profit to fall* as a simple empirical law (in a
Humean sense) then it has undoubtedly been refuted - reference to 'long
periods' notwithstanding.
c) That the law of the trpf is presented in Volume 3 may be taken to
indicate that it is relatively concrete, and so may perhaps be expected to
issue directly in an empirical trend. But, first, it may be argued that
Marx would not have located it there had he edited his own work for
publication (see, eg, Rosdolsky 1968, Fine, 1982). And secondly, to do so
does not take seriously the use of the concept 'tendency' in Marx's work.
First, a tendency refers to a systemic ('structural') force (see Balibar
1965), that is necessarily at work (whether empirically manifest or not):
eg "The general and necessary tendencies of capital must be distinguished
from their forms of appearance." Marx, 1867 (Penguin 1976): 433. This is a
dialectical version of the very similar use of the concept tendency in
classical political economy, as discussed in Mill, 1836, and JM Keynes,

> I still don't think the paragraph which I quoted (Capital, Vol.3,
> Penguin, p346) can be read as your interpretation that TRPF is "an
> abstract ... tendency ... is never observable per se."

Michael W:
Well, interpretation of a text in translation is a tricky thing, the
passage you cite from the Penguin version of Marx 1894: 346, "The law
operates therefore simply as a tendency, whose effect is decisive only
under certain particular circumstances and over long periods." *seems* to
take refuge in the standard empiricist excuse when the short run catches
her out - that it will all come right 'in the long run'. However, the
German original is more subtle : "So wirkt das Gesetz nur als Tendenz,
dessen Wirkung nur unter bestimmten Umstanden [a umlaut] und im Verlauf
langer Perioden schlagend hervortritt." (Marx 1894: 249). A better
translation of which is 'The law acts therefore only as a tendency; its
*operation* emerges strikingly only under certain circumstances and in the
course of long periods.' We (Reuten and I) read this as meaning that only
under very specific circumstances (so specific that they will only be
manifest within a very long historical period) will the tendency be
manifest in an actual fall in the rate of profit. (The L&W version, p. 239,
and the Kerr translation (in Freedman 1961, 129) are both more conducive to
our interpretation than the Penguin edition.)

> (2) If the Law of TRPF is just an abstract law, then what is the meaning
> of the word "Fall," of "Falling"? What would be the meaning of "abstract"

> falling of rate of profit?

Michael W
As I have already stressed, I do not accept the diminution of the abstract
implied by the use of the word 'just' here. Anyway, IMO, 'abstract
tendency' is strictly an oxymoron. A tendency is a force or a pressure at
work, identifiable only by abstracting from the other forces and pressures
at work, both systemic and contingent. There are in Marx a whole variety of
'tendencies of accumulation', not to mention 6 or so 'counter-tendencies',
each of which may exert a pressure on the rate of profit. Even in those
'bestimmten Umstanden' when the rate of profit actually falls, it is no
easy job to establish that it does so because of a rising organic
composition of capital (ie because of the law of the trpf). So, the
intuition is simple - think of mechanics, where the outcome is the vector
sum of a collection of forces, each of which 'tends' to effect the outcome.
Indeed, for modern transcendental realists, like Bhaskar, the laws of
natural science are no less tendential (or 'normic') than those of
political economy.

> (2) If Marx's Law of TRPF is not an empirical tendency, then what is the
> meaning or usefulness of empirical Marxian economic analysis, like,
> Moseley, Shaikh, Dumeni and Levy etc., who tried to find the empirical
> evidence of falling rate of profit in the long run?

Michael W
I am not an empiricist, but it is clear that (conceptually adequate)
empirical investigation is vital - if only to tell us what has to be
explained! But as I have suggested above, I do not buy the empircist
'long-run' cop-out (although I am perfectly happy with the formal economic
modelling notion of the long-run as when all factors of production are
variable, one empircial operationalisation of which would be in terms of
capitalist decision-making modes: when he is considering investment in a
new machine, he is in long-run mode, once it has been bought - perhaps only
notionally - he is in short-run mode).

Dr Michael Williams
"Books are Weapons"

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