Technical change and falling profitability: A critical review of theoretical perspectives

This article critiques the theoretical attempts to refute the Marxian law of the tendency of the rate of profit to fall through an analysis of the relationship between technical change and the decline in profitability as formalized by Marx. Focusing on the arguments of the critics, we have divided the latter between those who consider that the law cannot operate due to its ‘indeterminacy’ and those who claim that technical change must increase the rate of profit. In this article, we will demonstrate that these positions are based either on misunderstandings or on theoretical principles that are antithetical to the Marx’s critique of political economy and are therefore not adequate as a refutation of the law of the tendency of the rate of profit to fall. Our final conclusion is that the logical-formal critical approach is unproductive, and that only a more advanced empirical analysis can dictate a verdict on this relationship in capitalist historical development.

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Publication Details

Journal
Capital & Class
Published
2025-08-10
DOI
https://doi.org/10.1177/03098168251362326
Primary Topic
Economic Theory and Policy
Type
article
Field-Weighted Citation Impact
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article

Technical change and falling profitability: A critical review of theoretical perspectives

Pablo Fernández Ruiz
Capital & Class
Economic Theory and Policy
article

Technical change and falling profitability: A critical review of theoretical perspectives

Pablo Fernández Ruiz
article en

Abstract

This article critiques the theoretical attempts to refute the Marxian law of the tendency of the rate of profit to fall through an analysis of the relationship between technical change and the decline in profitability as formalized by Marx. Focusing on the arguments of the critics, we have divided the latter between those who consider that the law cannot operate due to its ‘indeterminacy’ and those who claim that technical change must increase the rate of profit. In this article, we will demonstrate that these positions are based either on misunderstandings or on theoretical principles that are antithetical to the Marx’s critique of political economy and are therefore not adequate as a refutation of the law of the tendency of the rate of profit to fall. Our final conclusion is that the logical-formal critical approach is unproductive, and that only a more advanced empirical analysis can dictate a verdict on this relationship in capitalist historical development.

Capital & Class
Universidad Complutense de Madrid (ES)
Openalex Percentile: Top 67%
Economic Theory and Policy
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