The document summarizes Marx's theory that the rate of profit in capitalist systems will tend to fall over time due to factors like increased capital accumulation making it harder to obtain desired profit rates. This downward trend in profit rates is a threat to continued capitalist growth and accumulation. The document also discusses how capitalists have adopted measures like increased exploitation of labor and financialization to try to counteract and delay this falling profit rate tendency, but that these cannot prevent the eventual overthrow of the capitalist system due to factors like technological change eliminating jobs and the immense social costs.

1. 1
THE FUTURE OF CAPITALISM
Fernando Alcoforado *
In a capitalist society, what interests the holder of capital is the pursuit of higher rates of
profit. The rate of profit is the key through which capitalists can advance their capital
accumulation objective. But the more capital accumulation develops, the more difficult
it is for capitalists to obtain profit rates at the desired level to continue the accumulation
process. The rate of profit, being the goal of capitalist production, its continuous
decline, as it has been, appears as a threat to the capitalist production process.
The decreasing trend of profit rates in the world capitalist system shows the historical,
transitory character of the capitalist mode of production and the conflict that is
established with the possibilities of continuing its development. Karl Marx was right
when he predicted in The Capital that the rate of profit will tend to fall in the long run
decade after decade. Not only will there be ups and downs in each boom and crisis
cycle, but there will also be a downward trend in the long run, making each boom
shorter and each fall deeper. Thus, the foundations of Marx 's theory of the downward
trend in the rates of profit of the world capitalist system are being confirmed [MARX,
Karl. O Capital (The Capital). Rio de Janeiro: Civilização Brasileira, 1999]
Another trend that also manifests with the evolution of the world capitalist system is the
decline in GDP growth rates of the world economy. The world economy shows an
evident decline in GDP from 1980 to 2016. Except for China and India, the GDP of
other countries presents declines or economic stagnation. In addition to the economic
stagnation affecting the European Union and Japan, the United States shows meager
signs of recovery after the 2008 global crisis and China shows signs of slowing down. A
disintegrating economic syndrome is present in the world. It is the present unbearable
indebtedness of the sovereign states of Europe, Japan, and the United States.
According to Eric Hobsbawn, the global crisis of 2008 was worse than that of 1929-
1933, because it is absolutely global. The international financial system no longer
works. An indisputable fact is that there will be depression that will last for many years.
There is no turning back to the absolute market that has ruled the last 40 years since the
1970s. The global crisis that began in 2008 is, for the market economy, equivalent to
what was the fall of the Berlin Wall in 1989 in relation to the socialist economy. In
addition, this depression can lead to a new world economic system. It is necessary to
redesign everything in the direction of the future (MAGAZINE "EL VIEJO TOPO". En
la tercera crisis. Entrevista a Eric J. Hobsbawn (In the third crisis, interview with Eric
J. Hobsbawn). Available on the website www.elviejotopo.com, 2009].
Faced with the inexorable tendency of the fall of the rate of profit in the world capitalist
system, neutralizing actions have been adopted aiming at its reversion. The first
neutralizing tendency of the drop in the rates of profit explained by Marx in The Capital
is a more intense exploitation of labor. This has been happening on a massive scale
since the 1990s with the escalation of neoliberalism in the world in which the share of
national income that goes to wages has fallen to its lowest levels since these records
began to be made after World War II. In addition, the working day has been increased in
all countries of the world in recent years. The working class is also being pressured by
the introduction of part-time work, just-in-time production, short-term contracts, and
other regressive measures to increase the exploitation of the working class.

2. 2
The fall in wages below its value is one of the actions taken to counterbalance a falling
rate of profit. The relative excess of the economically active population is another factor
that neutralizes the fall in profit rates. Global unemployment, which has now become a
permanent feature, is serving to lower wage levels and to cheapen the cost of the
workforce, in addition to increasing surplus labor time, that is, the surplus value for the
capitalists. The reduction of "wage costs" is the main feature in recent years as
capitalists sought to raise their profits. The capital investment in low-cost foreign
countries of the labor force also yields a higher rate of profit. Market liberalization of
the peripheral and semi-peripheral capitalist countries, including the privatization of
basic public services, also opened up possibilities for new investments, all of which
allowed the capitalists to neutralize the downward trend in the rate of profit.
It should be noted that successive crises affecting the capitalist system can counteract
the downward trend in the rate of profit because by bringing some capitalists to ruin,
crises can allow a recovery of profits at the expense of other capitalists. The means of
production of ruined capitalists can be bought by other capitalists at liquidation prices,
the value of raw materials will fall and unemployment will force workers to accept
lower wages. Production would again be profitable and capital accumulation would
restart. In this way, there can be long periods, even decades, in which the tendency of
the rate of profit to fall is canceled by the neutralizing actions mentioned above. These
can stop the whole process and even reverse it, but not indefinitely. Eventually, this
downward trend will reassert itself and act as a barrier to the development of capitalism.
State intervention is also a weapon used to neutralize the downward trend in the rates of
profit of the world capitalist system by avoiding the first symptoms of the crisis that are
developing towards an absolute collapse but also obstructing the capacity of some
capitalists to re-establish their rates of profit at the expense of others. This is what is
happening in the world capitalist system after the global crisis of 2008. National
governments intervened to avoid the threat of major breakdowns. But in so doing, they
prevented the restructuring of the capitalist system from being sufficient to overcome
the pressures that had caused the threat of bankruptcy. In short, it is important to
recognize that the capitalist system has been able to survive only because of its recurrent
crises, the exploitation of the working class, investments in peripheral and semi
peripheral countries, state intervention on the economy and large sums of capital
diverted to unproductive expenditure by the state.
Faced with the problems faced by capitalism with the declining trend in their rates of
profit in the development of productive activity, most of the available capital has been
allocated to investments in financial investments. As a result, the capitalists developed a
gigantic financialization of the economy functioning purely by speculative
considerations. But the financialization of the economy is limited, however, by the real
productive economy that is the one that generates wealth. In other words, financial or
fictitious capital that does not generate wealth cannot become autonomous in relation to
productive capital. The main drivers of fictitious capital are public debt securities, debt
securities of any nature, shares traded on the stock exchanges and the credit currency
itself issued by banks without a backing in the respective deposits.
According to François Chesnais, no other sector of the economy can boast such high
rates of return, not even any of the largest companies in the productive sector can even
match the record profits of the financial system. Due to its links with other concrete

3. 3
forms of capital, in the face of crises in the productive and commercial sectors, financial
capital also suffers the consequences of its collapses and vice versa. It is, therefore, an
explosive symbiosis. Hence, the domination of financial capital, which in turn is
dominated by the fetish of immediate profit, is dependent on the production of
commodities and the contradictions resulting from the extraction of profit and its
distribution between the fractions of capital in the permanent process and infinity of the
search for the valorisation of capital as the motor of accumulation (CHESNAIS,
François. Les dettes illégitime, Quand les banques font main basse sur politiques
publiques. Paris: Editions Raisons d'agir, 2011).
The current technological advancement based on artificial intelligence will negatively
impact on the world of work because it can lead to the end of employment and the
consequent fall in the demand for goods and services, also putting capitalism as a world
system in check. This means that scientific and technological advancement may lead the
current economic system to collapse by pointing to the need for the invention of a new
economic system. It will certainly not be in capitalism that the world can reconcile the
wonders of science and technology with the end of employment. Another economic
system will have to be invented in which science and technology will act as liberating
humanity from the burdens of labor and fostering economic and social progress.
In spite of all the artifices to neutralize the tendency of the fall of the rates of profit of
the world capitalist system and the technological advance will not prevent its overthrow
because the political and social cost would be immense for the humanity with its
maintenance. Before its collapse in the 21st century, the world capitalist system will be
ruined by economic depression for many years leading to the collapse of many
businesses, mass unemployment on a planetary scale, the economic indebtedness of the
heavily indebted nation states, and the rebellion of masses around the world.
*Fernando Alcoforado , member of the Bahia Academy of Education, engineer and doctor of Territorial
Planning and Regional Development from the University of Barcelona, a university professor and
consultant in strategic planning, business planning, regional planning and planning of energy systems, is
the author of Globalização (Editora Nobel, São Paulo, 1997), De Collor a FHC- O Brasil e a Nova
(Des)ordem Mundial (Editora Nobel, São Paulo, 1998), Um Projeto para o Brasil (Editora Nobel, São
Paulo, 2000), Os condicionantes do desenvolvimento do Estado da Bahia (Tese de doutorado.
Universidade de Barcelona, http://www.tesisenred.net/handle/10803/1944, 2003), Globalização e
Desenvolvimento (Editora Nobel, São Paulo, 2006), Bahia- Desenvolvimento do Século XVI ao Século XX
e Objetivos Estratégicos na Era Contemporânea (EGBA, Salvador, 2008), The Necessary Conditions of
the Economic and Social Development-The Case of the State of Bahia (VDM Verlag Dr. Muller
Aktiengesellschaft & Co. KG, Saarbrücken, Germany, 2010), Aquecimento Global e Catástrofe
Planetária (P&A Gráfica e Editora, Salvador, 2010), Amazônia Sustentável- Para o progresso do Brasil e
combate ao aquecimento global (Viena- Editora e Gráfica, Santa Cruz do Rio Pardo, São Paulo, 2011),
Os Fatores Condicionantes do Desenvolvimento Econômico e Social (Editora CRV, Curitiba, 2012),
Energia no Mundo e no Brasil- Energia e Mudança Climática Catastrófica no Século XXI (Editora CRV,
Curitiba, 2015) and As Grandes Revoluções Científicas, Econômicas e Sociais que Mudaram o Mundo
(Editora CRV, Curitiba, 2016), among others.