Law of accumulation
The law of accumulation is an economic law of capitalism first propounded by the classical economist Adam Smith.[1]
The law of accumulation was further elaborated in Karl Marx's critique of political economy, where it refers to the development of the accumulation of capital as a systemic element of the capitalist mode of production.[2] In the course of its development, capitalism reaches a crisis from an Overaccumulation of capital which was prompted by the law of accumulation in the capitalist economy.
The growth of capital proceeds through an increase in the organic composition of capital (greater portion of capital employment relative to labor employment), reducing employment. It also goes along with proletarianization of the population so that more and more of the labor force consists of people dependent on a wage or salary for a living.[3]
Marxian economists usually distinguish between the absolute and relative immiseration of the working class. In absolute immiseration, the living standards of the working class decline absolutely. In relative immiseration, the wealth of the capitalists grows faster than the real wages of the working class.
In Henryk Grossman's theory, capital accumulation leads to a gradual decline of the rate of profit, culminating in a collapse of the capitalist system.
See also[edit]
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References[edit]
- ↑ "Introduction to Adam Smith". Retrieved 5 December 2014.
- ↑ http://www.economictheories.org/2008/12/law-of-accumulation-falling-rate-of.html
- ↑ Marx, Karl. "Das Kapital, ch.25".
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