the broken cornucopia

Bronze statuette of a god holding a cornucopia, Period: Late Hellenistic or Early Imperial, Date: ca. 100 BC-100 AD, MET Collection.


Thinking and theorizing about economics without taking into account the nature of its structuring core makes the economist, as a scientist, a conniving being

When Marx, in Contribution to the Critique of Political Economy, stated that “the anatomy of bourgeois society must be sought in political economy”, he highlighted social relations (established in the “social production of the very existence” of social subjects) as a structuring element of that society; from which we may understand its nature and motion. In other words, he stressed that the core of bourgeois society was its economic structure.

A proposition that is intended to be valid as long as capitalism is in force, given that such a structure is continuously reproduced, producing capitalists, on the one hand, and salaried workers, on the other. However, there is a set of propositions, laws and economic theories that are valid, accepted and applicable in certain stages of capitalism, but not in others. As are, for example, the cases of the law of markets (Say's law), and of Ricardo's theory of comparative advantages.

From the above paragraphs, three considerations deserve attention. First, thinking and theorizing about economics without taking into account the nature of its structuring core makes the economist, as a scientist, a conniving being and, depending on his area of ​​expertise, even a “creator” of new forms of exploitation and expropriation of social work to private appropriation of its product.

Second, we have to demystify the neutrality claim of economics as a science; roughly speaking, as economists we formulate theories for and against capital and its implications for society and nature (the condition of science as a purely theoretical-cognitive system has already been overcome; in addition to theory, it is also a social, economic, political practice, phenomenon culture and source of power).

Third, some economists do not seem to consider the relationship of validity between theoretical propositions and historical contexts to be important, and others, the relationships between theoretical propositions and the structural differences between economies of different degrees of development for which such propositions were elaborated.

Based on the above considerations, we will make some comments on the article by José Luís Oreiro “Profit rate, capital accumulation and economic growth: comments on the article by Professor Adalmir Marquetti”, published in Corecon-DF website.

José Luís Oreiro begins the article with the following statement: “One of the fundamental principles of classical (and Marxist) political economy is that the pace of capital accumulation – and, by extension, the pace of economic growth – is determined by the level of the rate of profit. This is because classical political economy, upon assuming the validity of Say's Law, admits that investment is determined by saving and that this originates, fundamentally, from the saved fraction of profits. In this way, the relationship between the rate of profit and the rate of growth of the capital stock can be presented by the so-called 'Cambridge equation'”. Here, the referred author makes at least three very hasty assessments on three subjects of very different nature. First, by stating that the pace of capital accumulation is determined by the level of the rate of profit both in the classics and in Marx, he implies that this has the same determination for both. Second, that the relationship between rate of profit, capital accumulation and economic growth of the classics (and of Marx?) can be summarized by the “Cambridge equation”, when in fact the latter represents “a by-product of the post-Keynesian approach to economic growth”. 'Harrod-Domar dilemma'”, also known as “Pasinetti's theorem”, as clarified by the author himself in another article (OREIRO and MAGALHÃES, 2019). Third, it makes it appear that the set of variables presented in this discussion was common to both the classics and Marx.

Oreiro, based on the “Cambridge equation” concludes that: “the production technique, the level of use of productive capacity and the distribution of income between wages and profits affect the profit rate and, consequently, the level of savings and investment in the economy with repercussions on the pace of capital accumulation and the creation of income and employment in the economy”. This rather generic conclusion, based on the authority of the classics, Marx and post-Keynesians, aims both to introduce his analysis and to advance some conclusions of the article by Adalmir Marquetti, co-authored with Eduardo Maldonado Filho, Alessandro Miebach and Henrique Morrone, entitled “An interpretation of the Brazilian economy based on the rate of profit: 1950-2020”. The following considerations were established based on the results of the study by Marquetti et al, presented by Oreiro (2022), as well as another article by Marquetti et al (2010), The Profit Rate in Brazil, 1953-2003, and also from the article by Morandi and Reis (2004), “Fixed capital stock in Brazil, 1950-2002”.

First, some theoretical remarks. When Marx elaborated his “law of the tendency of the rate of profit”, he did so considering a certain standard of capitalism: that of large mechanized industry. In other words, English capitalism with its “integrated industrial apparatus”, as explained by Barbosa de Oliveira (2003). This presupposes not only the differentiation of the departments of consumer goods and production goods (with the growth process led by the latter), but “[...] also the existence of a credit system that guarantees the mobility of capital between the different spheres of economic activity [...] a working class composed of free workers is still an element of this structure” (BARBOSA DE OLIVEIRA, 2003, p. 175). In general, we can only understand the idea of ​​the “tendency law” if we consider that it was thought of in the context of the mechanization of production (including the department of production goods), which in turn makes technical progress autonomous, making it a central element of capitalist competition. Therefore, the validity of the “tendency law” is related to an economy that has developed an integrated industrial apparatus.

As we can see in Marx’s own reading (2017, p. 276): “The law of the decreasing rate of profit, in which the same rate is expressed or even a higher rate of surplus value, means, in other words, that , starting from any given amount of the average social capital, for example, a capital of 100, the part destined to instruments of labor tends always to increase, while that destined to living labor tends to decrease. As the total mass of living labor attached to the means of production decreases in relation to the value of these means of production, so does unpaid labor, and the share of value in which it represents itself, in relation to the value of the total advanced capital. Or: an ever smaller proportion of the total capital expended is converted into living labour, and this total capital thus absorbs less and less surplus labor in relation to its size, although the proportion between the unpaid part of the labor employed and the paid part of the latter can grow simultaneously. The relative decrease of variable capital and the increase of constant capital, though both increase in absolute terms, is, as we have already seen, just another expression of the increased productivity of labour.

On the other hand, the development of capitalism in Brazil and its dynamics follows a set of logics specific to a particular pattern of capitalism; peripheral capitalism, or “bastard”, as Furtado (2000) called it. An enormous intellectual effort, on the part of several scholars from different disciplines, was implemented throughout the XNUMXth century to characterize this social formation. The result was an important set of theoretical contributions, including ECLAC's theory of underdevelopment, Chico de Oliveira's critique of dualism, the contributions of Celso Furtado, Caio Prado Júnior, Florestan Fernandes, dependency theory and the School of Unicamp (despite clashes and controversies, they established original knowledge about the nature, functioning and dynamics of peripheral capitalism).

Although, as economists, we continue to prefer “[…] the use of a theoretical and methodological arsenal […] marginalist and Keynesian, these granting honor and scientific recognition to the establishment technical and academic […]”, as already denounced Chico de Oliveira (2011, p. 20), in his Criticism of dualistic reason.

A hallmark of our social formation is structural heterogeneity, which initially has causes of an economic nature (primary-export phase), but deepens with the development of underdevelopment (formation of the internal market and industrialization process), due to technological factors. One of the explanations for this phenomenon is that the expansion of the manufacturing sector occurs with equipment that aims to allow great savings in the workforce. Therefore, the deepening of structural heterogeneity results in a permanent mismatch at the level of factors (capital and labor) with clear implications on the concentration of income and on the increase in technological dependence.

This thesis is defended by Celso Furtado in Theory and policy of economic development (2000). There, he concludes that the deepening of structural heterogeneity gives permanence and makes “underdevelopment a process that tends to generate itself”. Applying the “tendency law” to explain the behavior of an economy with such characteristics is a controversial exercise to say the least.

Let us see, in empirical terms, the economic structure resulting from heavy industrialization (1955-61) and the economic miracle period (1968-73), and its adequacy to Marx's “tendency law”. Heavy industrialization corresponded to the accelerated growth of the production goods sector and the durable consumer goods sector and, consequently, the establishment of new global and sectoral patterns of accumulation, with a significant participation of transnational companies. Some of the characteristics of this industrialization are: oligopolization (productive concentration); high participation of transnational companies; strong concentration of income; technological dependency; productive disproportions between sectors, strong cyclical trends and imbalances between industrial sectors and subsectors.

Themes developed by Maria da Conceição Tavares in several of her works and which cover the foundations and relationships that really matter for understanding the dynamics of a peripheral economy. Chapter 3, The cyclical dynamics of recent industrialization in Brazil, from the book Cycle and crisis: the recent movement of Brazilian industrialization (1998), reveals not only the intellectual greatness of that author but also her commitment to science and Brazilian society. A tradition of thought that needs to be resumed in order to understand that the determinations of profit in the economy go much further than a statement like the following: “total profits at current prices are calculated as value added at current prices minus total wages at current prices ” (MARQUETTI et al, 2010, p. 501). Or even, that only a profit rate equation, found by dividing this total profit by the non-residential fixed capital stock, may be sufficient to explain the “pace of capital accumulation in Brazil”.

In any case, given the verification of sectoral disproportions and the arrangement that peripheral capitalism establishes for its reproduction, based on the “three structures: wages and distribution, consumption and production” (RODRÍGUEZ, 2009, p. 385), it becomes a finding to match Marx's “law of tendency” with the dynamics of the Brazilian economy. So it becomes questionable to conclude as Oreiro (2022) does from Marquetti's article et al that “the slowdown in the pace of capital accumulation in Brazil in the early 1980s was due to the fall in the rate of profit, a result consistent with the law of tendency for the rate of profit to fall in Marx”.

Or even, that “these results seem to point out that the deceleration of the long-term growth of the Brazilian economy would be associated with the secular trend of falling profit rate, which is an inexorable result of the industrialization process of the Brazilian economy in the period 1950- 1980 which is necessarily capital intensive, that is, it acts to reduce the real productivity of capital” (OREIRO, 2022). More importantly, the dynamics of the Brazilian economy cannot be explained only by internal phenomena, given its “internationalized industrialization process” (1965-1980), the debt crisis in the 1970s, the structural crisis of capital in terms of world and its transformations for the implantation of neoliberalism.

In any case, a country that in the 1970s had a high rate of urbanization, a strong migratory process fostered by the industrialization of the Southeast region, a generalized increase in slums in large cities and large repositories of labor force in other regions, cannot be treated as an economy that is at a stage of development such that labor power is being replaced by constant capital at such an intense pace as to imply a reduction in the rate of profit; basic premise of Marx's law of tendency.

In figure 2, taken from the article by Oreiro (2022), it is curious to observe that in the period of implementation of the production goods sector in Brazil (1955-1961) there is a period of fall in the rate of profits (1952-1959, with the exception from 1954 to 1955).

Another result of the aforementioned study by Marquetti et al analyzed by Oreiro (2022) is the finding of “the existence of a strong correlation between the rate of profit and the rate of capital accumulation”. A basic formula for the rate of fixed capital accumulation is given by the relationship between investment and the stock of productive fixed capital. In turn, the rate of profit is defined by r = П / K, where П is the total profit and K is the non-residential fixed capital stock (variables established from the National Accounts in the study by Marquetti et al. of 2010). On the assumption that this is the relationship between the rate of profit and the rate of accumulation in the study by the aforementioned authors, the strong correlation found is nothing more than a statistical relationship that makes the two variables have the same direction of variation, as shown the figure 11.

Faced with the structural problems of the Brazilian economy and its type of insertion in the world economy, as we mentioned earlier, it seems very problematic to sustain conclusions as direct as: (1) “this reduction in the rate of profit in the Brazilian economy was associated with a strong reduction in the rate of capital accumulation and the rate of growth of the Brazilian GDP in the early 1980s”; (2) “the slowdown in the pace of capital accumulation in Brazil in the early 1980s was due to the fall in the rate of profit, a result consistent with the law of tendency for the rate of profit to fall in Marx”.

Moreover, the rate of accumulation of the fixed capital stock until the 1980s has a large weight of state investments, so that in this case it is difficult to establish a direct relationship between the rate of profit and the rate of accumulation. For later periods, the 1980s and early 1990s (high inflation), and more recently, with the advance of financialization, it is also not possible to directly establish a relationship between the rate of accumulation of productive fixed capital and the rate of profit.

An economy in which, in 2019, out of a total of 106 million occupations, only 50,2% are formally registered (according to IBGE National Accounts), in which about 8% of its population (approximately 17,1 million of Brazilians) lives in slums, in which regional inequalities are both a result and represent opportunities for the next cycle of capital accumulation (the Legal Amazon as a territory for the expansion of the agricultural monoculture and mining frontier, for example), in a frank process of deindustrialization (in 2014, the participation of the manufacturing industry in GDP was at the level of the 1950s) and reprimarization (under the command of transnational capital); it simply does not fit into Marx's 'law of tendency'. Although, its behavior can very well be explained considering the internal structures that give it life and the global movement of capital accumulation that determines its dynamics and direction.

The late Chico de Oliveira, already in 1972, therefore, 50 years ago, warned of the broken cornucopia of economists. Although his statement is addressed to “a good part of the Latin American intelligentsia”, nothing prevents it from being applied to contemporary Brazilian economists: “[...] his theoretical and analytical schemes tied us to discussions around the product-capital relationship, propensity to save or invest, marginal efficiency of capital, economies of scale, market size, leading them, without realizing it, to build the strange world of duality and to end up, against their will, in the ideology of the vicious circle of poverty”.

The difference is that our current strange world is that of a peripheral capitalism transformed into a mere international platform for the accumulation of capitalism with financial dominance. Perhaps in the face of this new imperialist race, depending on the degree of destruction of the world and the resulting polarization, we will finally become aware of our “eternal” colonial condition and, from there, we can finally be reborn as a nation.

*José Micaelson Lacerda Morais is a professor in the Department of Economics at URCA. Author, among other books, of The problem of income in Smith, Ricardo and Marx.



BARBOSA DE OLIVEIRA, Carlos Alonso. Process of industrialization: from original to late capitalism. São Paulo: Editora Unesp; Campinas, SP: Unicamp, 2003.

FURTADO, Celso. Theory and policy of economic development. Rio de Janeiro: Peace and Land, 2000.

MARQUETTI, Adalmir; FILHO, Eduardo Maldonado; LAUTERT, Vladimir. The profit rate in Brazil, 1953-2003. Review of Radical Political Economics, 2010. Available at:

MARX, Carl. Contribution to the Critique of Political Economy. São Paulo: Expressão Popular publishing house, 2008.

________. Capital: critique of political economy: book III: the global process of capitalist production. Sao Paulo: Boitempo, 2017.

MORANDI, Lucilene; REIS, Eustáquio J. Fixed capital stock in Brazil, 1950-2002. Available in:

OLIVEIRA, Francis. Criticism of Dualistic Reason / The Platypus. Sao Paulo: Boitempo, 2011.

OREIRO, Jose Luis. Rate of Profit, Capital Accumulation and Economic Growth: comments on Professor Adalmir Marquetti's article. (2022). Available in:

________; MAGALHÃES, Luís Carlos G. de. The Cambridge equation and the New Pasinetti Theorem in post-Keynesian models of growth and income distribution. Political Economy Magazine, vol. 39, nº 3 (156), July-September/2019. Available in:

RODRÍGUEZ, Octavio. Latin American structuralism. Rio de Janeiro: Brazilian Civilization, 2009.

TAVARES, Maria da Conceição. Cycle and crisis: the recent movement of Brazilian industrialization. Campinas, SP: Unicamp, 1998.


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