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 Marx's theory that the profit rate is determined independently >of -- and largely constrains -- the interest rate is a good one. >Since I see the profit rate as determined by accumulation, >technological change, class struggles, etc., I don't see how a >temporary spike in interest rates could determine the profit rate. >BTW, the profit rate I use has both interest and non-interest >profits in the numerator. >JD
I missed that too. I think the reason for the rise - it was much too long and extended to be a "spike" - in the profit rate from 1982-97 was the result of wage cuts, speedup, quicker turnover time, outsourcing, etc. etc. Most of the things in Marx's "countervailing factors" were in play, and successfully. The big question is whether the downturn over the last few yeqrs - which has given back around 2/3 of the rise - is just cyclical, and will recover when the economy does, or whether we're now back in a troubled period like the 70s. Doug
