MARX’S RATE OF PROFIT AND THE THEORY OF LABOUR VALUE AS CONSERVATION LAW

The paper argues that Ricardo’s concern with determining the rate of profit had no central place in Marx’s analysis. Marx, in fact, utilised his own version of the labour theory of value – very different from that of Smith and Ricardo – not to determine the rate of profit, but to analyse the dynamics of economic aggregates and bring to light the inner social nature of production and distribution processes. The present analysis of the peculiar use of Marx’s labour theory of value is also an attempt to explain the role played by it in his system, for better or worse. The final thesis of the paper is that, in his system, Marx’s version of the labour theory of value plays the same role that conservation laws play in most physics theories, with significant consequences for an understanding of the dynamics of capital accumulation, business cycles and economic crises.