Economía marxista para el Siglo XXI

Archivo para la Categoría "Capital medición"

Profitability and the Roots of the Global Crisis: Marx’s ‘Law of the Tendency of the Rate of Profit to Fall’ and the US Economy, 1950–2007

Abstract The relevance of Marx’s theory of value and his ‘law of the tendency of the rate of profit to fall’ to the analysis of the financial crisis of 2007–8 and the ensuing global slump is affirmed. The hypertrophic growth of unproductive constant capital, including the wages of ‘socially necessary’ unproductive labour and tax revenues, is identified as an important manifestation of an historical-structural crisis of capitalism, alongside the increasing weight of fictitious capital and the proliferation of fictitious profits in the lead-up to the financial crisis. These phenomena have obscured the deepest roots of the global slump in the long-term profitability problems of productive capital – that is, in a crisis of surplus-value production. With these considerations taken into account, a better empirical assessment of trends in the composition of capital becomes possible, and with it a more accurate understanding of the impact of the ongoing displacement of living labour from production on the average rate of profit and the future of US and global capitalism.

Affiliations: 1: Brock University ; 2: Brock University


Replacement versus Historical Cost Profit Rates: What is the di fference? When does it matter?

Deepankar Basu

January 4, 2012

This paper explains the BEA methodology for computing historical cost and replacement (current) cost measures of the net stock of capital in the U.S. economy. Historical cost profit rates are counter-clockwise (clockwise) rotated versions of replacement cost profit rates during periods of inflation (disinflation) in the price of capital goods. Hence, during periods when the price index for capital goods is flat, the two profit rates move together; an example of such a period for the U.S economy is the whole postwar period 1946–2010. Moreover, trends in both replacement cost and historical cost profit rates display very similar movements over long periods, making the choice of capital stock valuation irrelevant for empirical analysis of profitability

Keywords: replacement cost, historical cost, capital stock, profitability trends.
JEL Codes: E01, B51.

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