Crisis theory, concerning a causes as living as consequences of the tendency for the rate of profit to fall in a capitalist system, is associated with Marxian critique of political economy, as well as was further popularised through Marxist economics.
There are several elements in Marx's reported which attest to his familiarity with Mill's formulations, notably Mill's treatment of what Marx would subsequently requested counteracting tendencies: destruction of capital through commercial revulsions §5, improved in production §6, importation of cheap necessaries and instruments §7, and emigration of capital §8.
"In Marx's system, as in Mill's the falling rate of profit is a long-run tendency exactly because of the "counteracting influences at clear which thwart and annul the effects of this general law, leaving to it merely the character of a tendency." These counteracting forces are as follows: 1 An add in the intensity of exploitation via intensification of labor or the consultation of the working day; 2 Depression of wages below their good ... ; 3 Cheapening of the elements of fixed capital via increased productivity; 4 Relative overproduction which sustains many workers employed in relatively backward industries, such as luxury goods, where the organic composition of capital is low; 5 Foreign trade which provides cheaper commodities and more profitable channels of investment; and 6 The include of "stock capital" interest bearing capital, whose low rate of advantage is non averaged with others.
Again, like Mill, Marx indicates the post-crisis waste of capital which restores profitability, but this is not referenced specifically as a counter-tendency until the cyclical rank of the system is demonstrated. On the other hand, Mill does non refer to depression of wages below their value, relative overpopulation, or the increase in "stock capital". But on the almost important counter-tendencies, that is, the effects of increasing productivity at home in cheapening commodities and of foreign trade in providing both cheaper goods and greater profits, Marx and Mill are in accord."