John R. writes: >> I agree with Alan that it (the FROP) can stand up to pretty much all challenges. However, I do not believe that FROP provides an adequate basis for *crisis theory* and that's mostly what my present endeavors are on about. << I think that's a key issue. A lot of the FROP stories seem to have no connection with "actually-existing capitalism." The stories seem to hover at an extremely high level of abstraction, with the authors never getting to how the tendency manifests itself at the level of appearence. One problem is that the profit rate that falls may not be the profit rate that's relevant to capitalist accumulation. I'm agnostic about the FROP on the macro-level, perhaps because I don't understand it well enough, but I think that a micro- economic FROP story makes tremendous amounts of sense. This sees the FROP as part of the nature of capitalist competition (as distinct from the neoclassical theory of competition). A capitalist who doesn't change technology in production, management strategies, and/or marketing or political or pollution-emission strategies will suffer from a falling rate of profit. There are two main _structural tensions_ which cause this: the accumulate-to-compete of capitalists and the class antagonism in production. These tensions are not abolished by individual capitalist efforts, so the micro-FROP remains. In my 1980 dissertation, I had a diagram that looked somewhat similar to the following: On the one hand, there's the "classical sequence" of Marxian crisis theory: FROP tendency (or, for Baran & Sweezy, the underconsumption tendency) --> crises, world-wide expansion of capitalism, etc. (in the absence of counteracting tendencies). To this I oppose my view of how things work: structural tensions (see above) --> micro-level FROP --> crises, world-wide expansion of capitalism, etc. Sometimes (as noted in my 1983 Review of Radical Political Economics and my 1994 Research in Political Economy articles), the structural tensions result in a macro-level FROP, but in other periods, such as the late 1920s, the rate of profit rose, which causes a crisis of a different kind (over-investment relative to consumption). We might be undergoing this kind of crisis at present. in pen-l solidarity, Jim Devine [EMAIL PROTECTED] Econ. Dept., Loyola Marymount Univ., Los Angeles, CA 90045-2699 USA 310/338-2948 (daytime, during workweek); FAX: 310/338-1950 "Segui il tuo corso, e lascia dir le genti." (Go your own way and let people talk.) -- K. Marx, paraphrasing Dante A.
