[OPE-L:6122] Re: Re: Re: falling profits

From: Fred B. Moseley (fmoseley@mtholyoke.edu)
Date: Thu Nov 01 2001 - 00:49:51 EST

On Mon, 29 Oct 2001, antonio callari wrote:

> In response to Fred's and Jerry's thoughts:
> That would be my "guess:" that the increasing level of endebtedness (which
> I believe took place) over the 80s and 90s (a long process indeed) would
> explain the transfer of funds to the financial sector (and, a whole range
> of other activities might be identified as relevant here) even if interest
> rates did not increase. The mechanism for the redistribution of surplus
> value [a subsumed class payment] here might have taken an institutional,
> rather than market, form. The best work that suggests such a change
> remains, to my knowledge, Henwood's Wall Street, even if his history stops
> in the early 90s.
> What effects this will have on the "crisis" (whether it will be deep or
> not), therefore, will, PARTIALLY, depend on whether there are blockages
> (objective or not) to the flow of funds from the non-productive segment of
> FIRE to the productive sector of the economy. In other words, there may be
> a profit squeeze, but not necessarily a "capital" squeeze.
> Just some speculation!
> Antonio

I think there are both a profit squeeze and a capital squeeze.  Both net
profit (net of interest) and gross profit (profit + interest) have
declined since 1997, although the decline of net profit (25%) is greater
than the decline of gross profit (13%)


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