[OPE-L:6110] falling profits

From: Rakesh Bhandari (rakeshb@stanford.edu)
Date: Mon Oct 29 2001 - 13:20:31 EST

thanks for your very helpful answers--would it possible for you to send me a 
copy of your capital and class paper over the net?

need to read it more carefully since i see that i confused your explanation for 
the movement in the profit rate of the non financial sector and for the profit 
rate in economy as a whole--it would seem that the present decline in the 
profit rate for the non financial sector in the US has been rising energy and 
interest costs, no? i thought interest rates had begun to rise in 1999--both in 
terms of Greenspan's action and the tightness in the corporate bond market? 
energy costs went from lows in early 1999 of $10 a barrel to highs in 2000 of 
$30 a barrel (as OPEC attempted to extricate itself from mounting 
indebtedness), which is now down to about $22. 

Did these rising costs kick in after the decline in the non financial sector 
profit rate?  

In an earlier post, you said the present steep decline in the US profit rate 
may have been caused by a decreasing rate of surplus value, but unit labor 
costs seemed to have been relatively stable throughout the late 90s (as the WSJ 
had been reporting; some of their editorialists were incensed by greenspan's 
rate hikes); so are unit labor costs not a good proxy for the rate of 

i think you are correct that even if declining raw material costs did reduce 
pressure on the OCC,  that decline was itself the result of a prior slow down 
in accumulation and consequent glut on the commodity markets.  

thanks for your answers,


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