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.
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.
Read more about this topic: Law Of Accumulation
Famous quotes containing the word economics:
“There is no such thing as a free lunch.”
—Anonymous.
An axiom from economics popular in the 1960s, the words have no known source, though have been dated to the 1840s, when they were used in saloons where snacks were offered to customers. Ascribed to an Italian immigrant outside Grand Central Station, New York, in Alistair Cooke’s America (epilogue, 1973)