Trevor Evans writes: >But its interesting to note that today's Financial
Times (29 October, p. 14) carries an article by someone called Ricahrd
Waters, which says: 'Leaving aside the effects of lower taxes and declind
interest rates, the
profits miracle looks much less impressive. A return on sales of about 25
per cent before interest , taxes and depreciation leaves the profitability
of the average US company below the peak levels hit in both the 1970s and
1980s. ...'<
I don't think that the "return on sales" is relevant. It's like the big
grocery chains complaining about their small profit margins. What matters
is the profit rate on capital invested.
> Also, Andrew Glynn has an article on profitability in the September 1997
issue of the Cambridge Journal of Economics, in which he produces figures
showing that the profit share and the profit rate in the US have risen
since the early 1980s, but that they are still considerably below their
level in the mid-1960s.<
He's right (and I have an unpublished and unfinished ms. on this). But the
rapid rise of profit rates during the 1990s is also quite important.
How good profitability is depends on one's frame of reference. And more
than one frame of reference seems relevant.
that's enough for today.
Jim Devine [EMAIL PROTECTED]
http://clawww.lmu.edu/1997F/ECON/jdevine.html
"A society is rich when material goods, including capital, are cheap, and
human beings dear." -- R.H. Tawney.
