The Marx’s Theory of Industrial Circles and the Innovative Models of Extended Reproduction in the USARyzhenkov A.V.
K. Marx fragmentarily presented the theory of industrial cycles in “Capital”, which investigated the formation and development of capitalism up to the maturing of free competition. A brief review of this theory shows that J. Schumpeter’s criticism is superficial. K. Marx did not deduce the mathematical laws of crises. The present paper partially fills this gap for the state-monopoly capitalism on the basis of the laws of surplus value and monopoly profit. Two models are considered, the transition from the first TM-2 to the second TM-2m is an ascent from the abstract to the concrete.Whereas TM-2 endogenously reproduces cycles in the positive growth rate of net output, TM-2m endogenously generates industrial cycles with decreases in net output in crises. This is achieved by converting a key parameter of the automation function into a new discrete variable, depending on the excess accumulation of capital. In addition, proportional control over the rate of capital accumulation has been introduced.TM-2m allows comparing impacts of economic policies on industrial cycles and on long-term trends in the US economy depending on a target rate of capital accumulation chosen by the State and financial capital in distinct scenarios.In 2018, the crisis will start, opening the next industrial cycle ending in 2025 according to scenario 1 or in 2026 according to scenario 2. The state monopoly-capitalism is entering a new period of over-production when sound economic policy becomes even more critical.