[OPE-L:6151] Re: Re: Re: falling profits

From: Fred B. Moseley (fmoseley@mtholyoke.edu)
Date: Sun Nov 04 2001 - 08:56:06 EST

On Sat, 3 Nov 2001, antonio callari wrote:

> Fred,
> writing to Rakesh, you say
> >
> >In my previous post, I guessed, without thinking about it too much, that
> >since the decline in the profit rate since 1997 has been so sharp, it must
> >have been due in part to a reduction in the rate of surplus-value. 
> >
> >But the more I think about it, I am not so sure.  According to my
> >estimates, the rate of surplus-value increased significantly from the
> >mid-70s to 1994 (about 30%), because real wages remained more or less
> >constant while productivity (although not increasing rapidly) was
> >increasing 1-2% a year. 
> >
> >Since 1997, real wages have increased some, due to the exceptionally low
> >rates of unemployment, but I would be surprised if real wages increased
> >faster than productivity since 1997.  So perhaps the rate of surplus-value
> >has levelled off since 1997, but I doubt if it has declined. 
> >
> >That means that the decline in the profit rate since 1997 must have been
> >due mainly to  continuing increases in the composition of capital and in
> >the ratio of unproductive labor to productive labor.  I have not updated
> >my estimates of these variables after 1994, but this discussion makes me
> >want to do that asap (hopefully in January).
> >
> This seems too simple to ask, so perhaps i'm missing something, but 
> wouldn't a third possibility be a problem of realization?

Antonio, yes, this is a good point.  The decline in the profit rate from
1997 to early 2000 was not due to realization problems, but the decline
since early 2000, while the economy has been slowing down and capacity
utilization rates falling, has been due in part to realization problems.  


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