Capitalism is a system subject to recurrent phases of booms and slumps, or trade cycles. These cycles are not the result of accidents or fortuitous circumstances, but constitute a part of the dynamics of capitalist accumulation. In Capital I (pt. VII, and in particular ch. 23 on "The General Law of Capitalist Accumulation") Marx set out a model of the interrelations between the rate of accumulation, the rate of absorption of labour and the increase in labour productivity, and the resultant rate of change in real wages. By determining the rate and mass of profits, these variables determine the rate of future accumulation. In this sequence, accumulation is the primary motive force for the selfexpansion of capital and in turn is fuelled by the reinvestment of profits which are a form of capital's self-expansion. The main antagonism in this sequence is between the mass of labour power available and the rate of accumulation which absorbs it. Rapid accumulation overruns labour supply and raises real wages. This would threaten the rate of profit in the absence of counteracting forces, such as a rise in the rate of relative surplus value (via a rise in labour productivity) or a rise in the rate of absolute surplus value (longer hours of work), or again an increase in labour supply from noncapitalist sectors (peasant agriculture, household industry, colonies or other foreign nations not yet fully capitalist). The response to a threat to the rate of profit would be the introduction of new methods which would displace labour and replenish the pool of unemployed.
