The notion of tendency in Marx's 1894 Law of Profit

This paper examines the concept of ‘tendency’ in economic theory in general and especially in Marx’s theory of the tendency of the rate of profit to fall in Capital, Volume III (Engels’s edition 1894). The main question addressed is whether Marx’s concept of tendency refers to a ‘power’ or ‘force’ which may not be directly observable or to an ‘expression’ or ‘result’ which is directly observable. Section 1 reviews related notions of tendency in the works of Roy Bhaskar and J.S. Mill. Section 2 examines all the editions of Volume III of Capital, including a recently published German edition of Marx’s I864-65 manuscript without Engels’s editing. In section 3.1 it is concluded that Marx’s texts are ultimately ambiguous. One can interpret the texts as supporting either the ‘power’ notion of tendency or the ‘expression’ notion of tendency. Section 3.2 briefly sketches the implications of the ‘power’ notion of tendency for empirical research, and argues that the cross-fertilization of methodological, theoretical, and empirical research is the most promising way to reclaim a ‘real world political economy’ whose aim is to provide theoretically informed explanations of important empirical phenomena.