Permanent Revolution

Graham B on Wed 04, April 2007 @ 17:04

Graham B — 2007-04-04 17:04:00

I've imported the BEA data into Excel, but I'm struggling to find the correct figures to calculate the annual mass of profit Could you specify exactly (or give row number on the worksheet?) for: 1. non-farm proprietors income after CCA and IVA 2. non�farm rental income with CCA and IVA 3. corporate profits after CCA and IVA Thanks.

Bill J on Wed 04, April 2007 @ 20:53

Bill J — 2007-04-04 20:53:38

Hi Graham Rows; 35,39,42 cheers bill

al h on Thu 20, August 2009 @ 05:01

al h — 2009-08-20 05:01:06

Bill J, I had come across your article a couple of months ago while I was trying to see if BEA figures would show any decline in the rate of profit since 1929. My own calculation (which I don't presume to be correct) shows an annual rate, adjusted for inflation, of about 5%. This is almost certainly too low; however, it seemed to me to reflect the effect of a managed capitalist economy, i.e. SEC, FDIC, Social Security, debt financed spending, etc. Also, it seemed to me that although there have been crises since the great depression (such as 1987) the government has "managed" to keep them under control. Then, of course, comes the current mess.

My question has to do with the rate of profit. If it has been 30% or so for the past several years how does this square with Marx's prediction that the rate of profit would inevitably fall? If capitalism has managed to avoid this trap are you suggesting that capitalism has finally triumphed?

Thank you for your attention.

Al h.

bill j on Thu 10, December 2009 @ 11:52

bill j — 2009-12-10 11:52:28

Hi Al

Sorry only recently saw your post. I've now added a graph for the rate of profit matched to recessions, you can see that the rate of profit did fall from the mid 1960s-early 1980s. But has recovered since then, we attribute this to the combined impacts of the neo-liberal offensive on labour from the early eighties onwards and the restoration of capitalism in the USSR, China and CEE in the early 1990s.

ojsna on Tue 15, December 2009 @ 19:20

ojsna — 2009-12-15 19:20:08

I have a brief comment to regarding the question about the falling rate of profit: the falling rate of profit is not a law but as Marx himself called it a tendency. The tendency is caused by increased investment in constant capital leads to lower labour value per commodity (I'm thinking Labour Theory of Value here), given the assumption that only human labour can create, or realize, value. In the graph, which I also have re-produced (a huge thank you to bill j for the method & article), I clearly can see that the profit rate does not always fall but sometimes rises. This is due to the effect of the countervailing tendencies to the tendency of the rate of profit to fall. So these countervailing tendencies can temporarily offset the falling rate of profit. The matter gets a bit more complicated since the tendency and the countertendency are dialectical in their relationship. This means, amongst other things, that these two affect each other in a dynamic way, i.e. the relationship is not linear. When the profit rate falls there arises a need to counter that fall for obvious reasons, and when the profit rates again are on the increase there will be competition for that profit rate boosting investment in constant capital, which again leads to a falling rate of profit. These two forces or tendencies of profit exist at the same time in any given production system, the question is which one is dominating at the same time. I haven't read the source myself but I think this is explained in Capital, Volume 3, Ch. 15: Exposition of the Internal Contradictions of the Law.

Also there is a great video explaining Marx and TRPF: http://www.youtube.com/watch?v=9oXEgH4HzYk

I'd love to hear your remarks on this.