Credit, The Turnover of Capital, and the Law of the Falling Rate of Profit: A Critical Note

Abstract

This paper argues that the total turnover period of capital, comprising both its time of production and circulation, has been almost totally ignored in the Marxian literature as an important counteracting factor to the law of the declining rate of profit. It is not mentioned at all by Marx in his famous Chapter XIV, Vol. III of Capital where he discusses other important counteracting forces, nor by Engels (in this particular context), who edited both Vols II and III of Capital. Moreover, this note contends that had Marx lived to re-write Vols II and III, he probably would have explicitly connected the expanding role of credit (associated with the development of capitalism) to a significant reduction in the turnover period of capital, thereby boosting the rate of surplus value, and countering, in an highly erratic, and contradictory manner, the fall in the rate of profit.