reasons for US profitability recovery after 1982

From: Rakesh Bhandari (rakeshb@STANFORD.EDU)
Date: Sun Dec 14 2003 - 10:51:15 EST

reasons for recovery in US profitability after 1982.

1. what role did mergers and acquisitions play in it? has this
question ever been asked?

Paul Mattick:
"And because the centralizaton process can raise the rate of profit
even in the absence of capital concentration, simply by the
reorganization and different utilization of the  existing capital, a
relative stagnation of capital does not at once express itself in
lower profits. On the other hand, the hastened concentraton and
centralizaton of capital can also be seen as measures foruced upon
capital to maintain its profitability. Insofar as these measures
compensate for lack of sufficient new investments, they hold down the
rising organic composition of capital, thus bolstering the rate of
profit at the expense of accumulation. But while the rate of profit
may be maintained, general economic economic activity stagnates, for
it cannot advance without the
production of additional capital. Sooner or later, the stagnation
leads to a crisis, which can be overcome through the resumption of
the accumulaton process" Marxism: last refuge of the bourgeoisie?

See, though this very
rich analysis focuses on the impact on democracy from m & a activity,
not the effect on profitability

2. international dimension--Brenner's currency devaluation, more
unequal terms of trade for primary commodity producers. The inflow of
capital  has also allowed US firms to renovate cheaply. And foreign
outsourcing has allowed a very substantial increase in shiftwork

3. closing down of entire branches of production in which value added
may have been relatively low (James Galbraith's C sector), though
this drove workers from mfg jobs into working poverty in the so
called service sector.

4. of course a rise in the rate of increase in the rate of exploitation.


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