Crisis theory

Crisis theory, concerning the causes and consequences of the tendency for the rate of profit to fall in a capitalist system, is now generally associated with Marxian economics. Earlier analysis was provided by Jean Charles Léonard de Sismondi who provided the first suggestions of its systemic roots. John Stuart Mill in his "Of the Tendency of Profits to a Minimum" which forms Chapter IV of Book IV of his Principles of Political Economy and Chapter V, "Consequences of the Tendency of Profits to a Minimum", provides a conspectus of the then accepted understanding of a number of the key elements post-Ricardo but without the theoretical working out that Marx wrote and Engels published subsequently in Capital, Volume III. A precise and useful survey of the competing theories of crisis in the different strands of political economy and economics was provided by Anwar Shaikh in 1978.