Trond said: Secondly: If this rate really has been falling, it could perfectly well do so without being caused by mechanization/automation. Even a static economy (static in the sense of negligible technical change and productivity growth in the period considered) will experience long run financial crisis symptoms simply due to accumulation of assets. As long as all sorts of returns (from loans, bonds, stocks) are re-invested, aggregate net assets (mirrored by net debts) will grow, regardless of productivity growth and technical change. Sooner or later the net assets holders (and I am not only talking of the financial sector here, also any economic agent who holds dividend-giving assets - including firm owners who behave as rentiers towards their own firms) will have trouble upholding a return flow that is proportional to net assets. Paul ---- The above is the strongest formulation of the tendancy of the rate of profit to decline. As you say it is independent of technical change, but it does rely upon the recognition that the amount of new value created it dependent on the workforce size. You also have to make assumptions about the rate of growth of the workforce being slower than the rate of accumulation - something which may not apply in rapidly developing economies.
