Eva Durant wrote,
>Tom, you say I asked the political questions, when
>in fact I asked economical ones - how can be
>profits maintained if your suggestions are
>accepted. You provide evidence for
>the maintanace of productivity, but
>not profits the essential motor
>of the present economic mechanism.
Eva,
A simple model would show profits increased for efficient firms and
decreased for inefficient firms. In the aggregate, the _rate_ of profit
would decrease but the total amount of profit would decrease to a lesser
extent or could even increase. The decreasing rate of profit is only a
problem from the perspective of finance capital because more and more of the
functions of capital have already been or are capable of being socialized
(viz., on the one hand, Long Term Capital Limited, on the other hand,
pension funds).
At any rate, current profit levels are unsustainable because they are
largely on paper. All Ponzi schemes come to an end. We _will_ see a fall in
profit levels, whether because of a financial collapse and depression or
because of a "prosperity covenant". A prosperity covenant in effect offers a
soft landing for capitalism. Those who assume that a crash offers a better
prospect of a socialist future must accept the burden of proof of showing
why such a crash wouldn't be at least as likely to lead to barbarism.
regards,
Tom Walker
