47-573: Communist Workers Organisation may refer to: Communist Workers' Organisation (UK) , the British section of the Internationalist Communist Tendency Communist Workers Organisation (Marxist–Leninist) Communist Workers Organisation (Netherlands) Topics referred to by the same term [REDACTED] This disambiguation page lists articles associated with
94-574: A Marxist scholar. There have been a number of non-Marxist empirical studies of the long-term trends in business profitability. Particularly in the late 1970s and early 1980s, there were concerns among non-Marxist economists that the profit rate could be really falling. Various efforts have been conducted since the 1970s to empirically examine the TRPF. Studies supporting it include those by Michael Roberts, Themistoklis Kalogerakos, Minqi Li , John Bradford, and Deepankar Basu (2012). Studies contradicting
141-571: A decade after he wrote the manuscript that became. in Engels' edition, the third volume of Capital , Marx composed a mathematical manuscript where he deals at length with the case of rising profit-rates under an increasing value-composition of capital. David Ricardo , interpreting Adam Smith's falling rate of profit theory to be that increased competition drives down the average rate of profit, argued that competition could only level out differences in profit rates on investments in production, but not lower
188-436: A lower cost, enabling more sales in less time. Ladislaus von Bortkiewicz stated: "Marx’s own proof of his law of the falling rate of profit errs principally in disregarding the mathematical relationship between the productivity of labour and the rate of surplus value ." Jürgen Habermas argued in 1973–74 that the TRPF might have existed in 19th century liberal capitalism, but no longer existed in late capitalism , because of
235-674: Is different from Wikidata All article disambiguation pages All disambiguation pages Communist Workers%27 Organisation (UK) Defunct The Communist Workers' Organisation (CWO) is a British left communist group, founded in 1975, and an affiliate of the Internationalist Communist Tendency, formerly the International Bureau for the Revolutionary Party. It publishes a quarterly magazine called Revolutionary Perspectives and distributes
282-700: Is impossible to infer definitely a theoretical principle that a falling rate of profit must always and inevitably result from an increase in productivity. Perhaps the law of the tendency of the rate of profit to fall might be true in an abstract model, based on certain assumptions, but in reality no substantive, long-run empirical predictions can be made[?]. In addition, profitability itself can be influenced by an enormous array of different factors, going far beyond those which Marx specified[?]. So there are tendencies and counter-tendencies operating simultaneously, and no particular empirical result necessarily and always follows from them[?]. Steve Keen argues that if you assume
329-477: Is the class war ... if the workers of all countries united and refused to fight, there would be no war!". In its long-time history, the CWO circulated hundreds of thousands of leaflets and publications that it had produced over the years. Tendency of the rate of profit to fall NML: The tendency of the rate of profit to fall ( TRPF ) is a theory in the crisis theory of political economy , according to which
376-497: The October Revolution and its position on the period of transition. Revolutionary Perspectives had tried to mediate between Workers' Voice and World Revolution but was now forced to choose. As World Revolution had already rejected its draft platform and it had disagreements on several other positions, most notably the tendency of the rate of profit to fall , Revolutionary Perspectives chose to unite with Workers' Voice to form
423-645: The United States and Germany . In recognition of this expansion it moved towards a closer coordination of its activities in 2009 with the formation of the Internationalist Communist Tendency. The CWO remains an integral part of the ICT. An initiative that the organisation was at the centre of in 2003–2004, known as No War But the Class War (NWBCW), was revived in 2018 by the CWO with the Anarchist Communist Group;
470-412: The labor theory of value is wrong, then this obviates the bulk of the critique. Keen suggests that the TRPF was based on the idea that only labor can create new value (following the labor theory of value), and that there was a tendency over time for ratio of capital to labor (in value terms) to rise. If surplus can be produced by all production inputs, then he believes there is no reason why an increase in
517-475: The law of value with the reality of the distribution of capital and profits, a problem that had already preoccupied David Ricardo – who himself inherited the problem from Adam Smith , yet failed to solve it. Marx was already aware of this theoretical problem when he wrote The Poverty of Philosophy (1847). It gets a mention again in the Grundrisse (1858). At the end of chapter 1 of his A Contribution to
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#1733086302955564-518: The rate of profit —the ratio of the profit to the amount of invested capital —decreases over time. This hypothesis gained additional prominence from its discussion by Karl Marx in Chapter 13 of Capital, Volume III , but economists as diverse as Adam Smith , John Stuart Mill , David Ricardo and William Stanley Jevons referred explicitly to the TRPF as an empirical phenomenon that demanded further theoretical explanation, although they differed on
611-707: The Aberdeen section left within a month (it would split from the ICC within a few years to form the Communist Bulletin Group ). In 1977 the CWO majority adhered to the international conferences initiated by the Internationalist Communist Party from Italy , also known as the PCInt. In the course of these conferences, the CWO became convinced by the PCInt that the positions the latter had defended since 1943 were
658-815: The Bourgeois to the Proletarian Revolution" into English as well. By 1975 the two groups coalesced broadly around the positions of the KAPD 's "Essen Tendency". Both groups had also taken part in international conferences sponsored by the French group Révolution Internationale with the British group World Revolution . These two groups formed the International Communist Current , but the Workers' Voice group denounced this as "counter-revolutionary" over its defence of
705-519: The Communist Workers' Organisation. For a year the organisation grew, publishing ten issues (the journals Workers' Voice and Revolutionary Perspectives ) as well as distributing thousands of leaflets at factory gates and establishing groups in several factories. However, by the end of 1976 it was clear that the wave of working class struggle which had led to the rebirth of left communism in Britain
752-456: The Critique of Political Economy (1859), he referred to it, and announced his intention to solve it. In Theories of Surplus Value (1862–1863), he discusses the problem very clearly. His first attempt at a solution occurs in a letter to Engels, dated 2 August 1862. In Capital, Volume I (1867) he noted that "many intermediate terms" were still needed in his progressing narrative, to arrive at
799-418: The TRPF as a general tendency in the development of the capitalist mode of production. Marx maintained that it was only a tendency , and that there are also "counteracting factors" operating which had to be studied as well. The counteracting factors were factors that would normally raise the rate of profit. In his draft manuscript edited by Friedrich Engels , Marx cited six of them: Nevertheless, Marx thought
846-577: The TRPF include those by Òscar Jordà, Marcelo Resende, and Simcha Barkai. Other studies, such as those by Basu (2013), Elveren, Thomas Weiß and Ivan Trofimov, report mixed results or argue that the answer is not yet certain due to conflicting findings and issues with appropriately measuring the TRPF. From time to time, the research units of banks and government departments produce studies of profitability in various sectors of industry. The Office for National Statistics releases company profitability statistics every quarter, showing increasing profits. In
893-543: The U.S. census reports of 1870 and 1880, but Engels claimed that Stiebeling explained the results "in a completely false way" (Stiebeling's defence against Engels's criticism included two open letters submitted to the New Yorker Volkszeitung and Die Neue Zeit ). Stiebeling's analysis represented "almost certainly the first systematic use of statistical sources in Marxian value theory." Although Eugen Varga and
940-486: The absence of fixed capital in Okishio's model, and therefore modified Okishio's model, to include the effect of fixed capital. He concluded though that: "... there is no hope for producing a falling rate of profit theory in a competitive, equilibrium environment with a constant real wage... this does not mean... that there cannot exist a theory of a falling rate of profit in capitalist economies. One must, however, relax some of
987-403: The agitational broadsheet Aurora . Works of the CWO and ICT have been cited in various academic and political sources internationally, across several countries and languages. The organisation has its origins in north England and Scotland (Liverpool, Newcastle, Aberdeen, Edinburgh), though it has since grown to encompass other areas with members and sympathisers across the world. The group
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#17330863029551034-436: The aid of a bigger investment in equipment and materials. The central idea that Marx had was that overall technological progress has a long-term "labor-saving bias", and that the overall long-term effect of saving labor time in producing commodities with the aid of more and more machinery had to be a falling rate of profit on production capital, quite regardless of market fluctuations or financial constructions. Marx regarded
1081-447: The answer. In the 1870s, Marx certainly wanted to test his theory of economic crises and profit-making econometrically, but adequate macroeconomic statistical data and mathematical tools did not exist to do so. Such scientific resources began to exist only half a century later. In 1894, Friedrich Engels did mention the research of the émigré socialist Georg Christian Stiebeling, who compared profit, income, capital and output data in
1128-440: The argument in his published theoretical work. And at the level of the reasoning of the argument, the mathematician Heinrich demonstrates that "a long-lasting tendency for the rate of profit to fall cannot be substantiated at the general level" with the argument we're given. In order to safely deduce a fall in profit as a general tendency, Marx's argument requires the presumption that the rate of surplus-value grows faster than
1175-424: The assumptions of the stark models discussed here, to achieve such a falling rate of profit theory." It is also possible to construct an alternative Okishio-type model, in which the rising cost of land rents (or property rents) lowers the industrial rate of profit. Heinrich calls into question Marxist theories giving a central place to the tendency of the rate of profit to fall, as Marx himself neglected to include
1222-405: The average rate of profit. There could also be several other factors involved in profitability which Marx and others did not discuss in detail, including: The scholarly controversy about the TRPF among Marxists and non-Marxists has continued for a hundred years. There exist nowadays several thousands of academic publications on the TRPF worldwide. No available book provides an exposition of all
1269-556: The best product of the left communist tradition. The two organisations formed the International Bureau for the Revolutionary Party in 1983. Due to their opposition to Stalinism / Marxism–Leninism , Maoism , and Trotskyism – as well as their theoretical basis originating in the Italian left – the CWO has erroneously been referred to as a " Bordigist " or " council–communist " organisation by some authors. A key distinction between
1316-478: The cost criterion [i.e. if it reduces unit costs, given current prices] and the rate of real wage remains constant", then the rate of profit would increase . Assuming constant real wages, technical change would lower the production cost per unit, thereby raising the innovator's rate of profit. The price of output would fall, and this would cause the other capitalists' costs to fall also. The new (equilibrium) rate of profit would therefore have to rise. By implication,
1363-491: The countervailing tendencies ultimately could not prevent the average rate of profit in industries from falling; the tendency was intrinsic to the capitalist mode of production. In the end, none of the conceivable counteracting factors could stem the tendency toward falling profits from production. In Adam Smith 's TRPF theory, the falling tendency results from the growth of capital which is accompanied by increased competition. The growth of capital stock itself would drive down
1410-417: The different arguments that have been made. Professor Michael C. Howard [27] stated that "The connection between profit and economic theory is an intimate one. (...) However, a generally accepted theory of profit has not emerged at any stage in the history of economics... theoretical controversies remain intense." Japanese economist Nobuo Okishio argued in 1961, "if the newly introduced technique satisfies
1457-439: The expansion of "reflexive labor" ("labor applied to itself with the aim of increasing the productivity of labor"). Michael Heinrich has also argued that Marx did not adequately demonstrate that the rate of profit would fall when increases in productivity are taken into account. How exactly the average industrial rate of profit will evolve is either uncertain and unpredictable, or it is historically contingent; it all depends on
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1504-407: The general profit rate (the grand-average profit rate) as a whole. Apart from a few exceptional cases, Ricardo claimed, the average rate of profit could only fall if wages rose. In Capital , Karl Marx criticized Ricardo's idea. Marx argued that, instead, the tendency of the rate of profit to fall is "an expression peculiar to the capitalist mode of production of the progressive development of
1551-448: The goal behind this move was to highlight the need to oppose all imperialist wars, including efforts of national liberation and other forms of lesser evilism espoused by social democratic and other left-wing groups – and instead focusing on workers' unity and class struggle . The views of NWBCW can be succinctly summed up by a 2017 statement from the CWO: "The only war which is worth fighting
1598-454: The longer term. In the “unhindered” advance of capitalist production lurks a threat to capitalism that is much graver than crises. It is the threat of the constant fall of the rate of profit, resulting not from the contradiction between production and exchange, but from the growth of the productivity of labor itself. It declined in the long run, Marx argued, paradoxically not because productivity decreased, but instead because it increased, with
1645-566: The politics of the CWO/ICT and that of Bordigists is that the former do not view the party as the class itself, but an important tool used to fight for a communist perspective in the mass organs of proletarian power that are the workers' councils. For some time in the 1990s it was Sheffield that became a temporary HQ for the organisation. The International Bureau for the Revolutionary Party was eventually joined by left communist groups in France , Canada ,
1692-409: The rate of profit could, in that case, fall if real wages rose in response to higher productivity, squeezing profits. David Ricardo also claimed that a fall in the average rate of profit could ordinarily be brought about only by rising wages (one other scenario could be, that foreign competition would drive down the local market prices for outputs, causing falling profits). John E. Roemer criticized
1739-438: The ratio of capital to labor inputs should cause the overall rate of surplus to decline. Eugen Böhm von Bawerk and his critic Ladislaus Bortkiewicz (himself influenced by Vladimir Karpovich Dmitriev ) claimed that Marx's argument about the distribution of profits from newly produced surplus value is mathematically faulty. This gave rise to a lengthy academic controversy. Critics claimed that Marx failed to reconcile
1786-510: The ratio of capital to value, which cannot be mathematically demonstrated from the concepts with which Marx is working. While the general direction of movement of both quantities may be known—both the rate of relative surplus-value, and the ratio of capital to value, are taken in ordinary capitalist conditions to increase— neither can grow without limit, and easy conclusions about their comparative rates of growth are not forthcoming. Marx, Heinrich argues, later became cognisant of this difficulty. Over
1833-656: The reasons why the TRPF should necessarily occur. Geoffrey Hodgson stated that the theory of the TRPF "has been regarded, by most Marxists, as the backbone of revolutionary Marxism. According to this view, its refutation or removal would lead to reformism in theory and practice". Stephen Cullenberg stated that the TRPF "remains one of the most important and highly debated issues of all of economics" because it raises "the fundamental question of whether, as capitalism grows, this very process of growth will undermine its conditions of existence and thereby engender periodic or secular crises." In Marx's critique of political economy ,
1880-442: The same and the more productive methods are adopted across the entire economy, the amount of labour required (as a ratio to capital, i.e. the organic composition of capital ) would decrease. Now, assuming value is tied to the amount of labor necessary, the value of the physical output would decrease relative to the value of production capital invested. In response, the average rate of industrial profit would therefore tend to decline in
1927-409: The social productivity of labor". Marx never denied that profits could contingently fall for all kinds of reasons, but he thought there was also a structural reason for the TRPF, regardless of current market fluctuations. By raising productivity, labor-saving technologies can increase the average industrial rate of profit rather than lowering it, insofar as fewer workers can produce more output at
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1974-409: The specific configuration of costs, sales and profit margins obtainable in fluctuating markets with given technologies. This "indeterminacy" criticism revolves around the idea that technological change could have many different and contradictory effects. It could reduce costs, or it could increase unemployment; it could be labor-saving, or it could be capital-saving. Therefore, so the argument goes, it
2021-410: The title Communist Workers Organisation . If an internal link led you here, you may wish to change the link to point directly to the intended article. Retrieved from " https://en.wikipedia.org/w/index.php?title=Communist_Workers_Organisation&oldid=929734375 " Categories : Disambiguation pages Political party disambiguation pages Hidden categories: Short description
2068-399: The value of a commodity is the medium amount of labour that is socially necessary to produce that commodity. Marx argued that technological innovation enabled more efficient means of production . In the short run, physical productivity would increase as a result, allowing the early adopting capitalists to produce greater use values (i.e., physical output). In the long run, if demand remains
2115-481: The young Charles Bettelheim already studied the topic, and Josef Steindl began to tackle the problem in his 1952 book, the first major empirical analysis of long-term trends in profitability inspired by Marx was a 1957 study by Joseph Gillman. This study, reviewed by Ronald L. Meek and H. D. Dickinson, was extensively criticized by Shane Mage in 1963. Mage's work provided the first sophisticated disaggregate analysis of official national accounts data performed by
2162-668: Was founded in the mid-1970s with the union of Workers' Voice , based in Liverpool , and Revolutionary Perspectives , a group based in the North of England and Scotland – some of whose members had previously been active in Solidarity . Both groups were influenced by German left communism and in particular the KAPD . Both also published articles on the German Revolution . Additionally, Revolutionary Perspectives translated Otto Ruhle 's "From
2209-428: Was over. The Liverpool section now began to retreat into local activity and, without issuing a document or giving any political explanation, abandoned joint political work and dissolved. This loss was followed in 1977 by the demand of the Aberdeen section that the CWO should now join the International Communist Current , which they now claimed was the communist movement. Although the majority were prepared to discuss this
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