Michael Perelman writes:>I have been proposing the idea that the profit rate has been artifically high for some time. I had mostly thought in terms of decreased regulation and the defeat of labor. Enron and the dot.com bubble makes me think more in terms of fraud. Any thoughts on this?<
it seems to me that it's quite possible that the measured rate of profit has been high due to accounting tricks and the like. But there are limits to how high the measured rate of profit can be relative to the very-hard-to-measure actual rate of profit. A lot of the fraud benefits one group of capitalists (Enron, dot.conners) at the expense of others, and so doesn't affect the aggregate average rate of profit, which reflects the state of class relations (determining the actual mass of profit, the numerator) and the amount of fixed capital that exists (the denominator). Of course, a lot of the fraud is against the working class and would raise the mass of profit. But (1) that doesn't mean it's not real profits and (2) there are limits here, too, since usual measures of compensation of employees involve _actual_ payments, not promises (pension funds, etc.) BTW, I don't understand how fictitious capital affects calculations of the rate of profit such as the one by the BEA that Fred and I are discussing. -- Jim
