U.S. profit rates are way up from their recession lows. I don't see anything about that in Brenner's NLR piece. Does that mean the crisis is postponed?
Doug
michael wrote:
High wages need not play a role in the crisis as I see it. Modern industry is characterized by very low marginal costs. Increasing wages for such a configuration will not cut into profits very much. Doubling wages in a multibillion-dollar semiconductor factory will not affect the cost structure. The problem is that if prices fall to marginal costs, industry will go bankrupt.
Firms do try to cut wages when they get squeezed, but the wage cuts are generally insufficient. If all firms cut wages, and price gets pushed back toward the now-lower marginal cost, then wage cuts will do no good whatsoever.
[EMAIL PROTECTED] wrote:
My reading of Brenner's argument can be summed up --a bit crudely-- like this:
Competition among American/German/Japanese Manufacturers ==>
Decline in US Manufacturing Prices ==>
Decline in US Manufacturing Profitability ==>
Decline in US General Profitability ==>
Decline in German/Japanese Manufacturing Profitability ==>
Decline in Global Profitability ==> Global Crisis
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Michael Perelman Economics Department California State University michael at ecst.csuchico.edu Chico, CA 95929 530-898-5321 fax 530-898-5901
