Garegnani’s surplus equation and Marx’s falling rate of profits

Martins, Nuno Ornelas

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Authors

Martins, Nuno Ornelas

Abstract(s)

Here I shall argue that Pierangelo Garegnani’s surplus equation can help in understanding the relationship between Piero Sraffa’s economic system and Karl Marx’s idea of a tendency for the rate of profits to fall. Garegnani’s surplus equation enables us to understand Marx’s analysis of the composition of capital in the context of Sraffa’s system, in order to identify the tendency for the rate of profits to fall, and the countervailing tendencies that act against it. This analysis is in line with Garegnani’s own view that the perspectives of Marx and Sraffa are best seen as complementary approaches, rather than opposed ones.