This is a longish note that was originally part of an email discussion concerning the tendency of the rate of profit to fall (TRPF) in Marx’s own writings, and that of later Marxists. It might be of wider interest, so I’ve reproduced it here.
The evidence from Rosa Luxemburg’s principle writings does not tend to support the conclusion that she viewed the falling rate of profit as an essential part of her analysis. Her critical focus, in The Accumulation of Capital, was on the crisis of realisation: of what we might now think of as effective demand. On the basis of her updates of Marx’s volume 2 reproduction schemes, she concluded that this realisation crisis – not a profits crisis – could be resolved through the expansion of capital into the non-capitalist world; that is, through imperialism. The dynamic of her system, in other words, was not determined by a crisis of profitability emerging at the point of production (as in the orthodox, Chris Harman version of TRPF), but of crisis emerging as result of problems in the circulation of commodities.