I had raised an objection to Fred's theory in 21987 and 99. I have
found that Samuel Hollander makes a similar criticism of Marx in his
classical Economics:
The curve relating the profit rate and accumulation--whatever its
slope--is continually shifting outward because of an increase in the
In a message dated 2/12/2002 2:18:34 PM Central Standard Time, [EMAIL PROTECTED] writes:
I had raised an objection to Fred's theory in 21987 and 99. I have
found that Samuel Hollander makes a similar criticism of Marx in his
classical Economics:
"The curve relating the profit rate and
Patrick Bond wrote:
Are you disaggregating the extremely high profits that derive from corporate
interest earnings or financial-asset capital gains, as US firms hollowed out
from the early 1980s and took higher earnings shares from their
financial/treasury operations? They would have paralleled
We've been through this before, but much of the profits that, say,
Ford and GM earn from their finance subsidiaries come from financing
cars and trucks. So it's not speculative profit - they're making the
money the bankers used to make.
Yeh, but it got bigger by an order of magnitude
Davies, Daniel wrote:
We've been through this before, but much of the profits that, say,
Ford and GM earn from their finance subsidiaries come from financing
cars and trucks. So it's not speculative profit - they're making the
money the bankers used to make.
Yeh, but it got bigger by an
Charles Brown wrote:
Do you think this fundamental problem can be solved through reforms ?
Fred writes:
Charles, thanks for the clarity of your question.
The short answer to your question is no, there is no reform - that I know
of - that will solve the fundamental problem of insufficient
On Mon, 28 Jan 2002, Doug Henwood wrote:
Devine, James wrote:
the data that Fred Moseley and I are discussing is from the BEA and is
available at:
http://www.bea.doc.gov/bea/ARTICLES/2001/09september/0901ror.pdf or
http://www.bea.doc.gov/bea/ARTICLES/2001/09september/ror.xls.
These
Subject: [PEN-L:22073] Re: Re: the profit rate recession
On Mon, 28 Jan 2002, Doug Henwood wrote:
Devine, James wrote:
the data that Fred Moseley and I are discussing is from the BEA and is
available at:
http://www.bea.doc.gov/bea/ARTICLES/2001/09september/0901ror.pdf or
http
I would reiterate that the denominator in the profit rate calculations is
a very questionable figure.
--
Michael Perelman
Economics Department
California State University
Chico, CA 95929
Tel. 530-898-5321
E-Mail [EMAIL PROTECTED]
Rakesh Bhandari wrote:
Why should capitalism be more vulnerable to recessions and
stagnation simply because the profit rate is falling or low?
Low profits mean low investment, which means a slower rate of growth
and reduced technical innovation. Profits are the main source of
investment
Rakesh Bhandari wrote:
Why should capitalism be more vulnerable to recessions and
stagnation simply because the profit rate is falling or low?
Low profits mean low investment, which means a slower rate of growth
and reduced technical innovation. Profits are the main source of
investment
Michael Perelman writes: Thank you, Rakesh. I have repeated a similar
theme in almost all of my writings -- but with a little bit different twist.
Low profits suggests heightened competition, which calls for more intensive
investment. This investment goes unnoticed in the macroeconomic data
- Original Message -
From: Devine, James [EMAIL PROTECTED]
To: [EMAIL PROTECTED]
Sent: Monday, January 28, 2002 9:38 AM
Subject: [PEN-L:22002] RE: Re: the profit rate recession
Michael Perelman writes: Thank you, Rakesh. I have repeated a
similar
theme in almost all of my writings
Well, empirically speaking - which I know is embarrassingly vulgar -
the best explanation for changes in investment is the change in
profits. Marx's argument in this excerpt just doesn't sound right.
Doug
Rakesh Bhandari wrote:
Rakesh Bhandari wrote:
Why should capitalism be more vulnerable
Devine, James wrote:
the data that Fred Moseley and I are discussing is from the BEA and is
available at:
http://www.bea.doc.gov/bea/ARTICLES/2001/09september/0901ror.pdf or
http://www.bea.doc.gov/bea/ARTICLES/2001/09september/ror.xls.
These data are not disaggregated by industry.
Ah, but
Well, empirically speaking - which I know is embarrassingly vulgar -
the best explanation for changes in investment is the change in
profits. Marx's argument in this excerpt just doesn't sound right.
Doug,
I am not necessarily disagreeing. I am saying that as long as a
falling rate of profit
support
this?
Cheers, Ken Hanly
- Original Message -
From: Doug Henwood [EMAIL PROTECTED]
To: [EMAIL PROTECTED]
Sent: Monday, January 28, 2002 12:33 PM
Subject: [PEN-L:22009] Re: Re: Re: Re: Re: Re: Re: the profit rate
recession
Well, empirically speaking - which I know is embarrassingly
my guess: both.
Was it uncompetitive capital-labor ratio costs or the overvalued
dollar or both that transformed the US steel industry?
Ian
I wrote:
the data that Fred Moseley and I are discussing is from the
BEA and is
available at:
http://www.bea.doc.gov/bea/ARTICLES/2001/09september/0901ror.pdf or
http://www.bea.doc.gov/bea/ARTICLES/2001/09september/ror.xls.
These data are not disaggregated by industry.
Doug writes:
Devine, James wrote:
The profit rate that the BEA measures seems to be in the same general league
as the marginal efficiency of investment of Keynesian theory (or Marx's
rate of profit, for that matter). The MEI is compared to the interest rate,
so if MEI i, the incentive to invest is there. If
weed[ing] out inefficient plant and equipment, creating a much newer
capital stock isn't disinvestment? (after all, cleaning out the dead wood
lowers the average age of the capital stock.) replacing 1/2 of all
manufacturing equipment in the US may not be disinvestment, but it's
probably not net
weed[ing] out inefficient plant and equipment, creating a much newer
capital stock isn't disinvestment? (after all, cleaning out the dead wood
lowers the average age of the capital stock.) replacing 1/2 of all
manufacturing equipment in the US may not be disinvestment, but it's
probably not net
How you measuring accumulation? If you're measuring profitability in
relative rather than absolute terms, shouldn't you measure
accumulation relatively as well?
Doug,
I meant by accumulation what Jim D is (I believe) referring to as net
investment. I think I agree with Jim that the
The profit rate that the BEA measures seems to be in the
same general league
as the marginal efficiency of investment of Keynesian
theory (or Marx's
rate of profit, for that matter). The MEI is compared to the
interest rate,
so if MEI i, the incentive to invest is there. If we
- Original Message -
From: Devine, James [EMAIL PROTECTED]
To: [EMAIL PROTECTED]
Sent: Monday, January 28, 2002 12:23 PM
Subject: [PEN-L:22019] RE: Re: RE: Re: the profit rate recession
my guess: both.
Was it uncompetitive capital-labor ratio costs or the overvalued
dollar or both
Really it should be expected future profits, but the current profit rate
is as good an indicator of expectations as we have. Robert Chirinko has
probably done the most on investment as a function of profit.
On Mon, Jan 28, 2002 at 01:33:48PM -0500, Doug Henwood wrote:
Well, empirically
I never got that idea. You were talking about deindustrialization in an earlier
post, which tends to be association with relocating production abroad. I only
said that that process was not that common during the 1930s, compared with
recent times.
Devine, James wrote:
I don't know where you
AM
Subject: [PEN-L:22002] RE: Re: the profit rate recession
Michael Perelman writes: Thank you, Rakesh. I have repeated a
similar
theme in almost all of my writings -- but with a little bit
different twist.
Low profits suggests heightened competition, which calls for more
intensive
On Fri, 25 Jan 2002, Doug Henwood wrote:
Michael Perelman wrote:
Doesn't fraud also accompany a falling rate of profit? I have thought about
this relationship quite a bit, but I have seen relatively little written about
it.
As profit rates fall, companies resort to more and more risky
Fred B. Moseley wrote:
Doug, this may be misleading. The rate of profit certainly did not
increase continuously from 1980 to 1977, and then decline. Rather, the
rate of profit fluctuated up and then down in the 1980s, so that the rate
of profit in 1992 (7.0%) was only slightly higher than it
Doug, this may be misleading. The rate of profit certainly did not
increase continuously from 1980 to 1977, and then decline. Rather, the
rate of profit fluctuated up and then down in the 1980s, so that the rate
of profit in 1992 (7.0%) was only slightly higher than it was in 1980
(6.2%).
Fred writes:
3. The current recession was caused by a sharp decline in investment
spending, beginning in late 1990.
The main point of disagreement seems to be - whether or not the decline of
investment spending that caused the recession was itself caused by the
decline in the rate of
Rakesh Bhandari wrote:
I raise a single question (and Doug your reply would doubtless be
most illuminating--am I way off here?):
Why did the drop off in investment spending *lag behind* the drop
in profitability?
The financial mania, of course. There were plenty of outside funds to
tap,
I raise a single question (and Doug your reply would doubtless be
most illuminating--am I way off here?):
Why did the drop off in investment spending *lag behind* the drop
in profitability?
Doug writes:
The financial mania, of course. There were plenty of outside funds to
tap, and
Michael Perelman wrote:
Doesn't fraud also accompany a falling rate of profit? I have thought about
this relationship quite a bit, but I have seen relatively little written about
it.
As profit rates fall, companies resort to more and more risky behavior to
compensate for the fall into rate of
I don't disagree with you, except to the extent that I think that the real
rate of profits has been declining since the late 1960s. It got a boost
from the decline in regulation and in the power of labor, as well as from
the opening up of new markets. None of these could be expected to
continue
Hi Jim,
I am sorry for my delay in responding to your last message of Monday,
Jan. 14. A sick son, an overdue paper deadline, and classes starting next
week have kept me otherwise occupied. I just have time for a few brief
comments.
We seem to agree on the following points (please correct me
On Mon, 14 Jan 2002, Doug Henwood wrote:
Rakesh Bhandari wrote:
yes what the previous collapse in basic memory chips suggests is
that constant capital had cheapened so considerably (esp relative to
consumer goods as is almost the case, I believe) that the rate of
profit on the lower
On Mon, 14 Jan 2002, Doug Henwood wrote:
Rakesh Bhandari wrote:
At any rate, the crisis hit Dept I first. Consumption was not a
problem. We also know Marx's famous vol II passge in which he
criticizes underconsumption. Consumption will now give.
We'll see. Wall Street's favorite
I am having a problem with this discussion. Marx, for me, is wholistic.
To say that profits, consumption, or investment causes a crisis seems
problematical -- since all are interconnected and enmeshed with
expectations.
Am I missing something?
--
Michael Perelman
Economics Department
Fred M. writes: I agree completely that the causes of this recession have
little to do with consumption (at least so far), and have mostly to do with
falling profits and investment. This is the main point I have been arguing
in my discussion with Jim D.
actually, it's not an argument in the
Fred B. Moseley wrote:
Doug, are you agreeing with Hyman and this growing consensus? What about
the recovery of profits and investment? If the cause of this recession is
mostly falling profits and investment, as we seem to agree, isn't a
necessary condition for recovery from the recession the
Devine, James wrote:
Hasn't he also said that consumer spending is what's been holding up the
U.S. economy? My point -- and that of Godley Izureta, who also go beyond
surface appearances to think about the determinants of private-sector
spending -- is that this prop can't last. Similarly,
Jim D attempts to assure us:
actually, it's not an argument in the sense of a quarrel (and definitely
not a contradiction à la Monty Python). It's a discussion. (In this
thread, I had a argument with someone else. Or was it a contradiction?
Whatever, it was a waste of time.)
But Jim D had
Rakesh, please don't try to classify others on the list. Let Jim speak for
himself as to whether he is a social democrat or not, if he chooses to do
so.
As to untangling causes, it is hard to say. I recall that the CEO of Ford
wondered how the industry could deal with overcapacity -- this was
Rakesh, please don't try to classify others on the list. Let Jim speak for
himself as to whether he is a social democrat or not, if he chooses to do
so.
michael, i quoted jim d saying that social democracy is best for the
capitalists and thus can thus presumably be imposed on them for
their
I don't consider myself a social democrat, but I agree with Jim -- if I
understand him correctly. SD is good for the capitalists. That does not
make it the Valhalla for others. It is merely a social form that reduces
conflict and thus improves efficiency.
On Tue, Jan 15, 2002 at 10:03:26AM
I cite the likes of Hyman, though, because lefties always overstay
the recession, and are among the last diehards clinging to recession.
Doug
---
Where can I get ahold of his stuff?
Christian
Michael Perelman wrote:
Fred's approach of looking at profits makes a great deal of sense when
looking at long swings, but in the short run -- as to what causes a
particular downturn -- identification is still a problem.
What is the political importance of understanding the
Doug, that I think that the big capitalists do understand their interest.
The small ones to whom the Wall Street Journal appeals on their editorial
page do not. We were just discussing yesterday how major businesspeople
appreciate Marxist analysis.
On Tue, Jan 15, 2002 at 02:15:22PM -0500, Doug
Michael Perelman wrote:
Fred's approach of looking at profits makes a great deal of sense when
looking at long swings, but in the short run -- as to what causes a
particular downturn -- identification is still a problem.
What is the political importance of understanding the economics
Doug Henwood wrote:
And when are those contradictions of capitalism that Rakesh is
talking about really going to bite? I mean something more than a
nibble. The phrase has been around for what, like a century?
They've been biting every second of every day for several hundred years.
Rakesh Bhandari wrote:
At any rate, the crisis hit Dept I first. Consumption was not a
problem. We also know Marx's famous vol II passge in which he
criticizes underconsumption. Consumption will now give.
We'll see. Wall Street's favorite economist, Ed Hyman, has a piece
out today claiming
Rakesh Bhandari wrote:
yes what the previous collapse in basic memory chips suggests is
that constant capital had cheapened so considerably (esp relative to
consumer goods as is almost the case, I believe) that the rate of
profit on the lower value of this constant capital can now be
greater
Rakesh Bhandari wrote:
At any rate, the crisis hit Dept I first. Consumption was not a
problem. We also know Marx's famous vol II passge in which he
criticizes underconsumption. Consumption will now give.
We'll see. Wall Street's favorite economist, Ed Hyman, has a piece
out today claiming
Was anybody able to read Fred M's profit rate graphs?
--
Michael Perelman
Economics Department
California State University
Chico, CA 95929
Tel. 530-898-5321
E-Mail [EMAIL PROTECTED]
Fred Moseley writes: Over, the weekend I read with interest Jim D's
explanation of the millennium crisis (i.e. the current recession) on his
website, which was discussed last week on PENL. I also read his RRPE 2000
paper on the rise and fall of stagflation. I mostly agree with the latter
and
thanks for your comments, which definitely help raise the intellectual level
on pen-l. The last time I discussed this issue, the discussion developed to
a stage where one individual asserted that my politics stink. Luckily, it
got to that low level only off-list.[*]
jim, this is childish, i
so accumulation can indeed proceed on the tugan path that is
(however) dependent on volatile fixed capital accumulation and
capitalists' luxury consumption, overcoming shocks along the way (say
the Asia Financial Crisis, the Russian default, Japan's recession
after the value added tax and the
Me:
Isn't it worth getting some indication of the role of circulating (M) as
well as fixed (K) capital, roughly, that (change in) ROP = (change in)
K/Y+M/Y+S/Y?
Jim:
fine, do it. But I think that the rate of profit on fixed capital is more
important in determining the ratio of net investment to
I am on a poor telnet connection, so I will be brief. Marx said that
mechanization began in consumer goods and then moved to producer goods.
In the first stage K/L should autmatically increase; in the second, it is
indeteriminate.
On Sat, Dec 29, 2001 at 08:38:06PM -0800, Devine, James wrote:
I am on a poor telnet connection, so I will be brief. Marx said that
mechanization began in consumer goods and then moved to producer goods.
In the first stage K/L should autmatically increase; in the second, it is
indeteriminate.
I think Marx did think it was indeterminate, strictly speaking,
Bill Burgess writes: Yes, I did find your talk interesting. Do you have any
similar numbers for other countries, or when you compare your trends for the
US with profit trends in other countries, what are the differences?
I don't have that data, though the OECD used to publish them. It's clearly
Devine, James wrote:
Rakesh writes: Doug H and Fred M have both argued that spike of
profit rate (as conventionally measured) especially in the 90s was a
result influx of foreign capital, which reduced borrowing costs.
I missed this. I don't know what Doug and Fred argue here, but I
think
Devine, James wrote:
Rakesh writes: Doug H and Fred M have both argued that spike of
profit rate (as conventionally measured) especially in the 90s was
a result influx of foreign capital, which reduced borrowing costs.
I missed this. I don't know what Doug and Fred argue here, but I
think
Title: Re: [PEN-L:20980] the profit rate & recession
concerning
mynotes that I posted on-line (at http://bellarmine.lmu.edu/faculty/jdevine/FROP/sacramento.htm),Rakesh
writes:1. you have confused changes in vcc
with changes in occ.
I don't care,
since what's important is the change in K/Y
Title: Re: [PEN-L:20980] the profit rate & recession
Rakesh writes:
Doug H and Fred M have both argued that spike of profit rate (as
conventionally measured) especially in the 90s was a result influx of foreign
capital, which reduced borrowing costs.
I missed this. I
don't know what Doug
Title: Re: [PEN-L:20986] RE: Re: the profit rate
recession
concerning mynotes that I posted
on-line (at http://bellarmine.lmu.edu/faculty/jdevine/FROP/sacramento.htm),Rakesh
writes:
1. you have confused changes in vcc with changes in
occ.
I don't care, since what's important is
the change
68 matches
Mail list logo
