Extended Summary

The Law of the Tendency of the Rate of Profit to Fall (LTRPF) is a frequently
debated subject within Marxist economics literature. LTRPF does not state that the
rate of profit is falling at every moment. But it expresses a downward tendency in
the rate of profit in the long run. It has given rise to extensive discussions since the
publication of Marx’s ‘Capital,’ resulting in a wealth of scholarly work. These
debates tend to resurface, especially during times of economic crisis.
Critiques directed towards Marx’s crisis theory can be summarized around
two main axes. The first one begins with the Okishio Theorem, suggesting that
Marx’s theory of crisis has internal inconsistencies. According to this perspective,
rational decisions aimed at maximizing the profit rate cannot lead to a decline in
the profit rate. On the contrary, competition among capitalists results in increased
productivity and physical output. Contrary to Marx’s claim, competition would lead
to an upward trend in profit rates because with each technical innovation,
production costs and the labor force used in production gradually decrease. This
approach evaluates labor power solely as a cost factor, whereas in Marxist theory,
labor power is not only a cost factor but also a unique source of surplus value.
Marxist theory focuses on changes in the value carried by each commodity, rather
than changes in the physical quantity of commodities.
Another axis of criticism directed at Marxist crisis theory focuses on its
uncertainty. This perspective can be traced back to Paul Sweezy, and a significant
portion of contemporary criticisms of Marx’s crisis theory falls within this
framework. According to this view, it cannot be proven that economic crises are
caused by changes in the profit rate because there are numerous factors influencing
a crisis. Even if a tendency of decline in the profit rate is observed historically,
there is no evidence that this is the main cause of crises. Moreover, there is no
evidence supporting Marx’s theory that the organic composition of capital will
increase faster than the rate of exploitation. Contemporary economic crises emerge
from a complex structure that cannot be reduced to a single cause. Responses to
such criticisms argue that the proof of the crisis theory lies not in empirical
observations but in the continuity of the capitalist mode of production.
This study provides a comprehensive review of the ongoing debates
surrounding The Law of the Tendency of the Rate of Profit to Fall. These
discussions have generally followed two distinct lines of argument.
Methodologically, these debates can be categorized along the same lines. An
analysis of the critiques of the law and the corresponding responses suggests that it
has gained widespread acceptance as a coherent theory of economic crises which
presents the contradictions inherent in the capitalist system among Marxist
economists