Marxist theory of the cycle Main article: Crisis Marx returned cyclical considerations of the classical economists who preceded him (Smith, Ricardo, etc..) And using classical concepts and concepts invented by him ( “organic composition of capital,” “rate of surplus value “) formulated a theory of crises that although scattered in several of his works, is a relatively complete theory of the expansion-contraction cycles, according to authors such as Henryk Grossman, Paul Mattick, Maurice Dobb and Anwar Shaikh. Richard Goodwin developed mathematical models of business cycles from the ideas of Marx.In Marx’s theory of mass gain (s) increases during economic expansion, but the profit rate (r s / c v , where c is constant capital, ie machinery, raw materials and other inputs, v are wages) tends to decrease because it increases the organic composition of capital (ie, c / v, which is the value of machinery and raw materials per unit of expenditure on wages). As the profit rate r s / (c v), can also be / ( 1) where s / v the rate of surplus value and c / v the organic composition of capital, so that the increase in will tend to bring down the rate of profit r.In Marx’s vision of the falling rate of profit and the accelerated accumulation are the two aspects that manifest the same process of development of productive capacity. The return on investment in form of profits is the spring booster of capitalist production and accelerated growth by reducing the overall profitability of capital leads to lower investment. The conflict of these factors opens up periodically in crisis. The conditions of capitalist growth is restored by the destruction of capital that takes place during crises. The corporate failures occur the destruction of capital, that ceases to function as such. Capitalists are not broken with their former markets and competitors can purchase at very low prices their companies, their plants, machinery or inventory.The economic destruction is the most acute to the capital invested in securities representing the right to future profits. Due to massive increase in unemployment, the crisis pushes down wages, contributing together to the above factors to the capital that exceeds the crisis could give high yields again. The crisis ends when the same capital destruction caused by it leads to the general rise in the rate of profit and the economy revived. The shutdown of production preparing its further expansion in the same way that prepares the growth crisis. So the cycle resumes. Indeed, since 1825, when the first general crisis broke, do not spend ten years in a row without the whole industrial and commercial world, production and exchange … will go crazy.Trade stalls, markets seem saturated with goods, products are stuck in crowded stores, and found no exit, the cash becomes invisible, the cr disappears stop factories, the working masses have no means of life precisely because having produced in excess, bankruptcies and liquidations succeed each other. The stagnation lasts for years, the productive forces and products are wasted and destroyed in mass until, finally, the masses of accumulated goods, more or less depreciated, find out, and the production and exchange are gradually reviving . Gradually, the pace accelerates, the pace of walking becomes a trot, the industrial trot in canter and finally, in frantic race, beating of bells in industry, trade, cr and speculation, to finish finally, after more risky jumps in the pit of a crash. And so, again and again.