Comment on Michael Burke on ‘Marxism Revisited’
Blog-Reference
You say: “It was this point, the law of the tendency of the profit rate to fall which was Marx’s most important contribution to economic theory and his most important discovery in that field.”
Wrong. The tendency of the profit rate to fall had already been a tenet of the founding fathers of classical Political Economy.
Marx was a sociologist first and an economist second. His research program was essentially the same as classical Political Economy: "The science which traces the laws of such of the phenomena of society as arise from the combined operations of mankind for the production of wealth, ..." (Mill, 1874, V.39)
The main difference was that Marx put the social antagonisms into the foreground (no harmonizing Invisible Hand here) and derived them from economic laws: “Intrinsically, it is not a question of the higher or lower degree of development of the social antagonisms that result from the natural laws of capitalist production. It is a question of these laws themselves, of these tendencies working with iron necessity towards inevitable results." (Marx, 1906, M.6)
Marx used the supposed iron law of the falling profit rate to derive his iron law of societal evolution.
Whether Marx was a good sociologist is not our concern. What is decisive for Heterodoxy is that his profit theory is false (see 2014b). Because of this, the law of the falling profit rate is also false.
Methodologically valid economic analysis tells us, roughly speaking, that the monetary economy (national or global; capitalist or communist) moves to the brink of breakdown as soon as the growth of overall public/private debt reverses (see 2014a). How this affects the respective societies is an altogether different question to which economists hitherto have not contributed much of scientific value.
Egmont Kakarot-Handtke
References
Kakarot-Handtke, E. (2014a). Mathematical Proof of the Breakdown of Capitalism. SSRN Working Paper Series, 2375578: 1–21. URL
Kakarot-Handtke, E. (2014b). Profit for Marxists. SSRN Working Paper Series, 2414301: 1–25. URL
Marx, K. (1906). Capital: A Critique of Political Economy, Vol. I. The Process of Capitalist Production. Library of Economics and Liberty. URL
Mill, J. S. (1874). Essays on Some Unsettled Questions of Political Economy. On the Definition of Political Economy; and on the Method of Investigation Proper To It. Library of Economics and Liberty. URL
Related to 'Methodology — Marx, too, messed it up'
For details of the big picture see cross-references Profit
