Law of accumulation

Accumulation can refer to a cumulative or compound increase in a variable, or to capital accumulation.

Marxian economics

In Karl Marx's critique of political economy, the law of accumulation refers to the way in which the accumulation of capital necessarily develops in the capitalist mode of production.

The growth of capital proceeds via an increase in the organic composition of capital and goes together with the proletarianization of the population. More and more of the labor force consists of people dependent on a wage or salary for a living.[1]

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

References