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The Falling Rate of Profit and the Great Recession of 2007-2009

A New Approach to Applying Marx’s Value Theory and Its Implications for Socialist Strategy

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Peter Jones

In The Falling Rate of Profit and the Great Recession of 2007-2009, Peter Jones develops a new non-equilibrium interpretation of the labour theory of value Karl Marx builds in Capital. Applying this to US national accounting data, Jones shows that when measured correctly the profit rate falls in the lead up to the Great Recession, and for the main reason Marx identifies: the rising organic composition of capital.
Jones also details a new theory of finance, which shows how cycles in the profit rate relate to stock market booms and slumps, and movements in the interest rate. He discusses the implications of the analysis and Marx and Engels’ work generally for a democratic socialist strategy.

Series:

Paresh Chattopadhyay

‘Socialism’ is a word that is now habitually taken to refer to a particular social system that prevailed in different parts of the globe during the twentieth century. This system was defined primarily by single-party rule with public (mainly state) ownership of the means of production along with a centrally planned economy. Its material base was generalised commodity production. The spokespersons of this system claim that this socialism was derived from Marx.

Paresh Chattopadhyay’s Socialism and Commodity Production argues the falsity of this claim. On the basis of a comprehensive study of Marx's own texts, as well as a detailed engagement with a wide variety of theorists of socialist economics, it shows that Marx's socialism constituted an ‘Association’ of free individuals in which private ownership, the commodity, wage labour and the state have no place.