Crisis and the rate of profit in Marx’s Laboratory

This paper examines the role of ‘the tendency of the rate of profit to fall’ in Marx’s successive drafts of the critique of political economy. On the basis of a philological analysis of the Grundrisse (manuscript of 1858),  a 1861-63 manuscript and finally the drafts for Capital Volume III (manuscript of 1864-65), it is argued that Marx’s views on the ‘law’ or ‘tendency’ of the rate of profit to fall developed from a law about the historical destination of the capitalist system as tending towards breakdown, to a theory about the functioning of the capitalist mode of production as a (potentially) reproductive system. Marx’s analysis of the tendency of the rate of profit to fall in the Grundrisse, as in his earlier economic writings from the 1840s, remains indebted, in many key respects, to the conceptual matrix in which this theme had been previously developed in classical political economy, particularly in Smith and Ricardo. As his research-project develops, Marx’s texts begin to display a development away from a notion of an ‘empirical’ trend for the rate of profit to fall, and towards a notion of tendency as operative power, which results in a notion of the cyclical variation of the rate of profit. On the basis of this textual analysis, it is hypothetically attempted to indicate some of the theoretical and political reasons that may have encouraged Marx to undertake this development. [Extended version of “From the ‘fall of the rate of profit’ in the Grundrisse to the cyclical development of the profit rate in Capital” in Science & Society 2011].