Destructive Creativity: Institutional Arrangements of Banking and the Logic of Capitalist Technical Change in the Perspective of Marx’s 1894 Law of Profit

Abstract

The theory on ‘the law of the tendential fall in the rate of profit’ (TFRP) is very much the centrepiece of volume III of Marx’s Capital. It is presented in part 3 of that volume, prior to the theory on the differentiation of capital into several functional forms — the division of surplus value into profit, interest and ground rent (parts 4–6). This indicates that there is a long way to go from the methodologically abstract level of that law to its actual concrete application. This indication is confirmed by Marx’s plans for the contents of the respective volumes of Capital, as laid down in several notes and letters.²

Faculty of Economics, University of Amsterdam, Roetersstraat 11, 1018 WB Amsterdam, Netherlands. Fax: X-31-20-525.4254. E-mail: Reuten @ FEE.UvA.NL. For their helpful comments, I am grateful to the discussants at the University of Bergamo conference on ‘Karl Marx’s third volume of Capital: 1894–1994’, as well as to Mary Morgan, an anonymous referee and the editor of this volume, Riccardo Bellofiore.