The law of the tendency of the rate of profit to fall shows that capitalism cannot develop in a gradual and crisis free way, so it has always been the target of criticism by the defenders of the capitalist order and the left-wing reformers. As for why the profit rate of developed capitalist countries has been declining for along time since the end of the 1960s, Western radical political economics, while denying the law of the tendency of the rate of profit to fall, proposed three alternative theories: the theory of insufficient demand, the theory of profit squeeze and the theory of excessive competition. These three alternative theories cannot be theoretically consistent. Marx’s law of the tendency of the rate of profit to fall clearly states that the essence of the long-term decline of profit rate is that the surplus value production tends to decrease relative to the total capital and its root is that the capitalist mode of production has the tendency to reduce the productive labor to the minimum. This trend is reflected in two aspects: the substitution of materialized labor for living labor in the productive field, that is, the improvement of the organic composition of capital, and the transfer of living labor from the productive field to the non-productive field, that is, the rapid expansion of non-productive labor relative to productive labor. According to his age, Marx emphasized in Capital and its manuscripts that the improvement of the organic composition of capital was the reason for the long-term decline of profit rate. In the contemporary era, non-productive labor dominated by circulation labor and social maintenance labor is growing rapidly. The rapid expansion of non-productive labor relative to productive labor constitutes another important reason for the long-term decline of profit rate. Marx's law of the tendency of the rate of profit to fall is not only not out of date, but also has achieved new performance.

Editor: Zhong Yao、Liu Tingting

From:Studies on Marxist Theory.2023.No.8.