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
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
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
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
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
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
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
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%).
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
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
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
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.
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]
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
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