I haven't read the article, but I'd say yes (based on my research on the origins of the Great Depression of the 1930s). In a "labor abundant" or "weak labor" economy, a rising profit rate is encouraged. It's true that the stagnant incomes of the vast majority (the 99%) hold back consumer demand (absent a consumer credit boom), but to some extent rising profit rates can be realized by increased accumulation rates -- just as rising profit rates finance and motivate increased accumulation rates. (Is a path that Tugan-Baranowsky posited, and might be called "profit-led" or "bootstrap" growth.) The problem with this boom is that it is increasingly unstable (prone to a sudden end), just like a commodity-price bubble.
The rightward shift of the income distribution (helping the 1%) gives money to a sector of the population that's more prone to financial speculation. High profit rates encourage a bull market. But since the financial bubble is based on one in the real economy, it falls too. Obviously, this story leaves a lot of stuff out so cannot be used to describe recent real-world events exactly. -- Jim Devine / "An atheist is a man who has no invisible means of support." -- John Buchan _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
