Tavis Barr says: > ..if there is no tendency of the profit rate to fall, why > has it been on a downward trend for the last 25 years or so? First: Are economists in agreement on this? I have economist acquaintances who say otherwise. Just asking. Secondly: If this rate really has been falling, it could perfectly well do so without being caused by mechanization/automation. Even a static economy (static in the sense of negligible technical change and productivity growth in the period considered) will experience long run financial crisis symptoms simply due to accumulation of assets. As long as all sorts of returns (from loans, bonds, stocks) are re-invested, aggregate net assets (mirrored by net debts) will grow, regardless of productivity growth and technical change. Sooner or later the net assets holders (and I am not only talking of the financial sector here, also any economic agent who holds dividend-giving assets - including firm owners who behave as rentiers towards their own firms) will have trouble upholding a return flow that is proportional to net assets. Thirdly: Imagine a future class society with 5% of the workforce in manufacturing, and where physical production is undertaken 90% by robots and automated processes with the workers as overseers and maintenance personnel. Since this is a class society the workforce will be dependent on selling their labour power to capitalists on the market. This extremely productive society will therefore employ the majority of workers in a huge service sector, which to a great degree is employed with catering to the needs of the capitalist class. This service sector will - being a service sector - have a lower organic composition of capital than industry, and therefore give good possibilities for exploitiation of employees. The capitalists will exploit those service workers as hard as possible, and accumulate as today. If returns to capitalists in the automated industrial sector are lower than in the service sector, the industrial sector will shrink. But this will increase prices for products from this sector until profitability there is comparable to that of the service sector. So my conclusion is that as long as a society is divided into two main classes: Capitalists and wage labourers, there will be the same possibilities for harvesting profits as today, or for that sake 50 years ago. The average rate of profit doesn't depend on level of automation/mechanization, but on the power balance between exploiters and the exploited. And back to my second point: To the degree one observes a some-decades long path towards stagnation and crisis in capitalism (a "long wave"), this is explained by accumulation due to compound returns, not by increased organic composition. Futhermore to the third point above: If I am right here, any marxist who believes that socialism and then communism is inevitable in the long run because capitalism is doomed due to a profit rate tending towards zero because of automation/mechanization, must be in error. Capitalism can continue indefinitely as long as one class has the power to coerce the majority to work for them by control over their means of living. Incidently I _do_ believe that socialism and some sort of "asymptote" towards communism is bound to come in the long run. But this belief is based on the relentless and gradual increase in average workforce education level and the communication technologies that the capitalists themselves need in the global competitiveness rat race. In this sense they are themselves bringing forth the tools that will mean their future demise. But this is another discussion. All this, IMHO, of course. I may be wrong. cheers, Trond ------------------------------------------------- | Trond Andresen ([EMAIL PROTECTED]) | | Department of Engineering Cybernetics | | The Norwegian Institute of Technology | | N-7034 Trondheim, NORWAY | | | | phone (work) +47 73 59 43 58 | | fax (work) +47 73 59 43 99 | | private phone +47 73 53 08 23 | | private mobile phone +47 90 16 69 30 | | | | http://www.itk.unit.no/ansatte/Andresen,Trond | -------------------------------------------------
