Back in April the Monthly Review posted a piece by Michael Heinrich about Marx’s theorization of the tendency of the rate of profit to fall. Here I have attached/linked a response co-authored by Andrew Kliman, Nick Potts, Alan Freeman, Alexy Gusev and myself.
Michael Heinrich’s recent Monthly Review article claims that the law of the tendential fall in the rate of profit (LTFRP) was not proved by Marx and cannot be proved. Heinrich also argues that Marx had doubts about the law and that, for this and other reasons, his theory of capitalist economic crisis was only provisional and more or less in continual flux.
This response shows that Heinrich’s elementary misunderstanding of the law – his belief that it is meant to predict what must inevitably happen rather than to explain what does happen – is the source of his charge that it is unproved. It then shows that a simple misreading of Marx’s text lies at the basis of Heinrich’s claim that the simplest version of the LTFRP, “the law as such,” is a failure. Marx’s argument that increases in the rate of surplus-value cannot “cancel” the fall in the rate of profit is then defended against Heinrich’s attempt to refute it. Finally, the paper presents evidence that Marx was indeed convinced that the LTFRP is correct and that he regarded the crisis theory of volume 3 of Capital as finished in a theoretical sense.