Accumulation, Technical Change, and Prisoners' Dilemmas: A Rejoinder to Frank Thompson

Frank Thompson has proposed (this Review, 30(1): 90-107) that accumulation can cause the profit rate to fall (by forcing the wage rate to rise), but that biased technical change, by itself, can only cause the profit rate to rise (by forcing the wage rate to fall). By contrast, this paper argues that: 1) accumulation pressure generates cycles in the profit rate, but no trend; 2) biased technical change may (and in most circumstances is likely to) produce cycles around a falling trend. This is because the fall in the profit rate is associated with a rise in the profit share, and this latter rise reduces the degree of the optimal bias sought by capitalists and therefore establishes dynamic balance in the labor market at a lower rate of profit. Marx's story is therefore confirmed in a nuanced and conditional manner that focuses attention on the empirical conditions and social relations pro-ducing this particular contradictory law of motion.