On Sat, 13 Dec 2003, Doug Henwood wrote:
> Fred B. Moseley wrote:
>
> >5. The most popular "radical-Marxian" explanation of these profit rate
> >trends has been the "reserve army profit squeeze" theory - that low
> >unemployment rates in the late 1960s and early 1970s increased workers
> >power, and enable them to gain substantial wage increases and to squeeze
> >profits. This theory then explains the increase in the rate of profit on
> >the higher rates of unemployment and the loss of workers' power in recent
> >decades. This seems to be Doug's explanation of these trends.
> >
> >However, this profit squeeze theory does not provide a very good
> >explanation of the only-partial recovery of the rate of profit, and
> >especially the share of profit, in recent decades. One would think that,
> >if greater worker power leading to wage increases in the 1960s and 70s
> >caused the profit share to decline, then surely the last three decades of
> >wage-cuts, speed-up on the job, and the general attack on workers and
> >unions should have fully restored the profit share by now.
>
> Why fully restored? The 1950s and 1960s were a Golden Age with few if
> any historical precedents that followed the worst depression in
> history. The corporate sector had net losses in 1932 and 1933,
> something it's never come close to replicating since. But the
> corporate profit share of GDP rose from the low of 5.2% in 1982 to
> 8.7% in 1997, a 67% increase. Sure it's below the 10-11% levels of
> the mid-1960s, but it's a major recovery. And though I haven't gotten
> a chance to analyze the latest benchmark revision of the NIPAs, they
> show a very substantial rise in profits in 2001 and 2002 - an amazing
> performance in a recession and weak recovery.
You are comparing a cyclical low (1982) with a cyclical high (1997).
And do your estimates include interest?
The estimates of the (profit + interest) share show cyclical ups and
downs, but very little overall increase since the 1970s.
>
> The 1982-97 and 2001-2002 profit recoveries happened despite an
> increase in what you call "unproductive" labor. Why?
In part because of the cyclical effects of higher capacity utilization
rates, but also over the long-term because of a very significant
increase in the rate of surplus-value, the ratio of the surplus-value
produced by productive workers to the wages of productive workers (S/V in
the following equation for the Marxian determination of the conventional
rate of profit, included in a prior post):
RP = P / K
= S - U / C + Ku
= [ S/V - U/V ] / [ C/V + Ku/V ]
Comradely,
Fred
