Schrödinger’s Capital: How the value-form school bet on a dead cat bounce

NOTE 27: Avoiding empirical proof at all costs

As I showed in my last post, the classical theorists prior to Marx held that the rate of profit had a definite tendency to fall. Since the capitalist mode of production is essentially production for profit, this immediately raised the question whether capitalism has a definite shelf-life beyond which it must collapse.

A falling rate of profit is inherently incompatible with the indefinite continuation of the capitalist mode of production for the rather obvious reason that the capitalist mode of production is production for profit. If the capitalist cannot realize a profit on his investment, he has no incentive to invest.

Marx had two tasks regarding this alleged tendency: first, to establish whether it in fact existed and why; second, to establish that the falling rate of profit in fact actually limited the life-span of the capitalist mode of production.

The value-form theorist, Michael Heinrich, has produced a critique of Marx’s effort in an essay published in Monthly Review, Crisis Theory, the Law of the Tendency of the Profit Rate to Fall, and Marx’s Studies in the 1870s, in which he argues Marx’s theory is not scientifically valid. Read the rest of this entry »