Shane Mage wrote: > In Marxian theory a depression (the devaluation of overaccumulated capital) > expresses not a drastic fall in the profit rate (though that appears, as > symptom) but > a drastic fall in the profitability of new investment--what Keynes calls > the Marginal Efficiency of Investment. It is an expectational variable and > as such does not appear, cannot appear, in ex post statistics. It occurs > precisely after a period of high profitability and hence high accumulation.
you presume that there is just one "Marxian theory," some sort of orthodoxy. Simon Clarke's book _Marx's Theory of Crisis_ is convincing when he argues that Marx himself never presented a finished version of crisis theory. So we can allow for variety of different crisis theories based in Marx's ideas. That said, I agree that it's the expected rate of profit that's most important in driving investment (accumulation of fixed capital). In some eras, such as the 1920s, it's also true that the measured rate of profit was relatively high before the actual crisis. Usually, there's a positive relationship between the measured rate of profit and the expected rate of profit. Expectations are usually based to an important extent on reality. At the same time, a high expected rate of profit drives a high rate of accumulation, which in turn allows the realization of a high measured rate of profit. There can be "profit-led growth." This process -- which I also have termed the "Tugan-Baranowsky path" and "bootstrap growth" -- may describe what happened in the late 1920s. It seems to have been a _real_ bubble, not just a financial one. So there wasn't just increasing financial fragility: the real economy (the accumulation process) became increasingly prone to downturns. -- Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own way and let people talk.) -- Karl, paraphrasing Dante. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
