In a message dated 2/12/2002 2:18:34 PM Central Standard Time, [EMAIL PROTECTED] writes:
I had raised an objection to Fred's theory in 21987 and 99. I have
found that Samuel Hollander makes a similar criticism of Marx in his
classical Economics:
"The curve relating the profit rate and accumula
I had raised an objection to Fred's theory in 21987 and 99. I have
found that Samuel Hollander makes a similar criticism of Marx in his
classical Economics:
"The curve relating the profit rate and accumulation--whatever its
slope--is continually shifting outward because of an increase in the
the profit rate & recession
by Fred B. Moseley
29 January 2002 22:55 UTC
>
>
> CB: Do you think this fundamental problem can be solved through reforms ?
Fred: Charles, thanks for the clarity of your question.
Charles: Thanks your further clarifying discussion
Charles Brown wrote:
>> Do you think this fundamental problem can be solved through reforms ? <<
Fred writes:
> Charles, thanks for the clarity of your question.
>The short answer to your question is no, there is no reform - that I know
of - that will solve the fundamental problem of insuffic
Davies, Daniel wrote:
> >We've been through this before, but much of the profits that, say,
>>Ford and GM earn from their finance subsidiaries come from financing
>>cars and trucks. So it's not speculative profit - they're making the
>>money the bankers used to make.
>
>Yeh, but it got big
>We've been through this before, but much of the profits that, say,
>Ford and GM earn from their finance subsidiaries come from financing
>cars and trucks. So it's not speculative profit - they're making the
>money the bankers used to make.
Yeh, but it got bigger by an order of magnitu
Patrick Bond wrote:
>Are you disaggregating the extremely high profits that derive from corporate
>interest earnings or financial-asset capital gains, as US firms hollowed out
>from the early 1980s and took higher earnings shares from their
>financial/treasury operations? They would have parallel
I would reiterate that the denominator in the profit rate calculations is
a very questionable figure.
--
Michael Perelman
Economics Department
California State University
Chico, CA 95929
Tel. 530-898-5321
E-Mail [EMAIL PROTECTED]
uary 30, 2002 12:49 AM
Subject: [PEN-L:22073] Re: Re: the profit rate & recession
>
> On Mon, 28 Jan 2002, Doug Henwood wrote:
>
> > Devine, James wrote:
> >
> > >the data that Fred Moseley and I are discussing is from the BEA and is
> > >availa
On Mon, 28 Jan 2002, Charles Brown wrote:
> the profit rate & recession
> by Fred B. Moseley
> 28 January 2002 00:20 UTC
> My conclusion from these estimates, as I have said many times before, is
> that the fundamental problem in the US economy of insufficient
> pro
On Mon, 28 Jan 2002, Doug Henwood wrote:
> Devine, James wrote:
>
> >the data that Fred Moseley and I are discussing is from the BEA and is
> >available at:
> >http://www.bea.doc.gov/bea/ARTICLES/2001/09september/0901ror.pdf or
> >http://www.bea.doc.gov/bea/ARTICLES/2001/09september/ror.xls.
>
OTECTED]>
> Sent: Monday, January 28, 2002 9:38 AM
> Subject: [PEN-L:22002] RE: Re: the profit rate & recession
>
>
> Michael Perelman writes: > Thank you, Rakesh. I have repeated a
> similar
> theme in almost all of my writings -- but with a little bit
> different
Really it should be expected future profits, but the current profit rate
is as good an indicator of expectations as we have. Robert Chirinko has
probably done the most on investment as a function of profit.
On Mon, Jan 28, 2002 at 01:33:48PM -0500, Doug Henwood wrote:
> Well, empirically speakin
- Original Message -
From: "Devine, James" <[EMAIL PROTECTED]>
To: <[EMAIL PROTECTED]>
Sent: Monday, January 28, 2002 12:23 PM
Subject: [PEN-L:22019] RE: Re: RE: Re: the profit rate & recession
my guess: both.
> Was it uncompetitive capital-labor ratio cos
> >The profit rate that the BEA measures seems to be in the
> same general league
> >as the "marginal efficiency of investment" of Keynesian
> theory (or Marx's
> >rate of profit, for that matter). The MEI is compared to the
> interest rate,
> >so if MEI > i, the incentive to invest is there. I
>
>How you measuring accumulation? If you're measuring profitability in
>relative rather than absolute terms, shouldn't you measure
>accumulation relatively as well?
Doug,
I meant by accumulation what Jim D is (I believe) referring to as net
investment. I think I agree with Jim that the overco
Devine, James wrote:
>The profit rate that the BEA measures seems to be in the same general league
>as the "marginal efficiency of investment" of Keynesian theory (or Marx's
>rate of profit, for that matter). The MEI is compared to the interest rate,
>so if MEI > i, the incentive to invest is the
I wrote:
> >the data that Fred Moseley and I are discussing is from the
> BEA and is
> >available at:
> >http://www.bea.doc.gov/bea/ARTICLES/2001/09september/0901ror.pdf or
> >http://www.bea.doc.gov/bea/ARTICLES/2001/09september/ror.xls.
> >
> >These data are not disaggregated by industry.
Doug
my guess: both.
> Was it uncompetitive capital-labor ratio costs or the overvalued
> dollar or both that transformed the US steel industry?
>
> Ian
>
ircal data support
this?
Cheers, Ken Hanly
- Original Message -
From: "Doug Henwood" <[EMAIL PROTECTED]>
To: <[EMAIL PROTECTED]>
Sent: Monday, January 28, 2002 12:33 PM
Subject: [PEN-L:22009] Re: Re: Re: Re: Re: Re: Re: the profit rate &
recession
> Well,
>Well, empirically speaking - which I know is embarrassingly vulgar -
>the best explanation for changes in investment is the change in
>profits. Marx's argument in this excerpt just doesn't sound right.
Doug,
I am not necessarily disagreeing. I am saying that as long as a
falling rate of profi
Devine, James wrote:
>the data that Fred Moseley and I are discussing is from the BEA and is
>available at:
>http://www.bea.doc.gov/bea/ARTICLES/2001/09september/0901ror.pdf or
>http://www.bea.doc.gov/bea/ARTICLES/2001/09september/ror.xls.
>
>These data are not disaggregated by industry.
Ah, but
the profit rate & recession
by Fred B. Moseley
28 January 2002 00:20 UTC
My conclusion from these estimates, as I have said many times before, is
that the fundamental problem in the US economy of insufficient
profitability has not yet been solved and continues to causes recessions
- Original Message -
From: "Devine, James" <[EMAIL PROTECTED]>
To: <[EMAIL PROTECTED]>
Sent: Monday, January 28, 2002 9:38 AM
Subject: [PEN-L:22002] RE: Re: the profit rate & recession
Michael Perelman writes: > Thank you, Rakesh. I have repeated a
simi
Michael Perelman writes: > Thank you, Rakesh. I have repeated a similar
theme in almost all of my writings -- but with a little bit different twist.
Low profits suggests heightened competition, which calls for more intensive
investment. This investment goes unnoticed in the macroeconomic data
be
] & http://bellarmine.lmu.edu/~jdevine
> -Original Message-
> From: Les Schaffer [mailto:[EMAIL PROTECTED]]
> Sent: Monday, January 28, 2002 4:19 AM
> To: [EMAIL PROTECTED]
> Subject: [PEN-L:21995] the profit rate & recession
>
>
> Fred wrote:
>
> >
Thank you, Rakesh. I have repeated a similar theme in almost all of my
writings -- but with a little bit different twist. Low profits suggests
heightened competition, which calls for more intensive investment. This
investment goes unnoticed in the macroeconomic data because of the manner
in whi
>Rakesh Bhandari wrote:
>
>>Why should capitalism be more vulnerable to recessions and
>>stagnation simply because the profit rate is falling or low?
>
>Low profits mean low investment, which means a slower rate of growth
>and reduced technical innovation. Profits are the main source of
>invest
Rakesh Bhandari wrote:
>Why should capitalism be more vulnerable to recessions and
>stagnation simply because the profit rate is falling or low?
Low profits mean low investment, which means a slower rate of growth
and reduced technical innovation. Profits are the main source of
investment fun
Fred wrote:
> Rather, the rate of profit fluctuated up and then down in the 1980s,
> so that the rate of profit in 1992 (7.0%) was only slightly higher
> than it was in 1980 (6.2%). Similar fluctuations (with somewhat
> larger amplitudes)
where can i find data for the ROP? is it possible to fin
>
>Doug, this may be misleading. The rate of profit certainly did not
>increase continuously from 1980 to 1977, and then decline. Rather, the
>rate of profit fluctuated up and then down in the 1980s, so that the rate
>of profit in 1992 (7.0%) was only slightly higher than it was in 1980
>(6.2%).
Fred B. Moseley wrote:
>Doug, this may be misleading. The rate of profit certainly did not
>increase continuously from 1980 to 1977, and then decline. Rather, the
>rate of profit fluctuated up and then down in the 1980s, so that the rate
>of profit in 1992 (7.0%) was only slightly higher than i
One other dimension with profit rate estimates is valuing the base on which it is
based, a la Marx's concept of fictitious capital.
--
Michael Perelman
Economics Department
California State University
[EMAIL PROTECTED]
Chico, CA 95929
530-898-5321
fax 530-898-5901
On Fri, 25 Jan 2002, Doug Henwood wrote:
> Michael Perelman wrote:
>
> >Doesn't fraud also accompany a falling rate of profit? I have thought about
> >this relationship quite a bit, but I have seen relatively little written about
> >it.
> >
> >As profit rates fall, companies resort to more and
On Fri, 25 Jan 2002, Charles Brown wrote:
> the profit rate & recession
> by Fred B. Moseley
>
>
> -clip-
> The main point of disagreement seems to be - whether or not the decline of
> investment spending that caused the recession was itself caused by the
> d
I don't disagree with you, except to the extent that I think that the real
rate of profits has been declining since the late 1960s. It got a boost
from the decline in regulation and in the power of labor, as well as from
the opening up of new markets. None of these could be expected to
continue
Michael Perelman wrote:
>Doesn't fraud also accompany a falling rate of profit? I have thought about
>this relationship quite a bit, but I have seen relatively little written about
>it.
>
>As profit rates fall, companies resort to more and more risky behavior to
>compensate for the fall into rat
Doesn't fraud also accompany a falling rate of profit? I have thought about
this relationship quite a bit, but I have seen relatively little written about
it.
As profit rates fall, companies resort to more and more risky behavior to
compensate for the fall into rate of profit. In the process, t
> >I raise a single question (and Doug your reply would doubtless be
> >most illuminating--am I way off here?):
> >
> > Why did the drop off in investment spending *lag behind* the drop
> >in profitability?
Doug writes:
> The financial mania, of course. There were plenty of outside funds to
>
the profit rate & recession
by Fred B. Moseley
-clip-
The main point of disagreement seems to be - whether or not the decline of
investment spending that caused the recession was itself caused by the
decline in the rate of profit since 1997. I argue yes and you argue
no. You argue
Rakesh Bhandari wrote:
>I raise a single question (and Doug your reply would doubtless be
>most illuminating--am I way off here?):
>
> Why did the drop off in investment spending *lag behind* the drop
>in profitability?
The financial mania, of course. There were plenty of outside funds to
ta
Fred writes:
>
>3. The current recession was caused by a sharp decline in investment
>spending, beginning in late 1990.
>
>
>
>The main point of disagreement seems to be - whether or not the decline of
>investment spending that caused the recession was itself caused by the
>decline in the rate
Hi Jim,
I am sorry for my delay in responding to your last message of Monday,
Jan. 14. A sick son, an overdue paper deadline, and classes starting next
week have kept me otherwise occupied. I just have time for a few brief
comments.
We seem to agree on the following points (please correct me
Doug Henwood wrote:
>
>
> And when are those contradictions of capitalism that Rakesh is
> talking about really going to bite? I mean something more than a
> nibble. The phrase has been around for what, like a century?
>
They've been biting every second of every day for several hundred years
>Michael Perelman wrote:
>>
>>
>>
>> Fred's approach of looking at profits makes a great deal of sense when
>> looking at long swings, but in the short run -- as to what causes a
>> particular downturn -- identification is still a problem.
>>
>
>What is the political importance of understanding
Doug, that I think that the big capitalists do understand their interest.
The small ones to whom the Wall Street Journal appeals on their editorial
page do not. We were just discussing yesterday how major businesspeople
appreciate Marxist analysis.
On Tue, Jan 15, 2002 at 02:15:22PM -0500, Doug
Michael Perelman wrote:
>
>
>
> Fred's approach of looking at profits makes a great deal of sense when
> looking at long swings, but in the short run -- as to what causes a
> particular downturn -- identification is still a problem.
>
What is the political importance of understanding the ec
I cite the likes of Hyman, though, because lefties always overstay
the recession, and are among the last diehards clinging to recession.
Doug
---
Where can I get ahold of his stuff?
Christian
I don't consider myself a social democrat, but I agree with Jim -- if I
understand him correctly. SD is good for the capitalists. That does not
make it the Valhalla for others. It is merely a social form that reduces
conflict and thus improves efficiency.
On Tue, Jan 15, 2002 at 10:03:26AM -08
Rakesh, please don't try to classify others on the list. Let Jim speak for
himself as to whether he is a social democrat or not, if he chooses to do
so.
As to untangling causes, it is hard to say. I recall that the CEO of Ford
wondered how the industry could deal with overcapacity -- this was so
Jim D attempts to assure us:
>
>actually, it's not an "argument" in the sense of a "quarrel" (and definitely
>not a "contradiction" à la Monty Python). It's a discussion. (In this
>thread, I had a argument with someone else. Or was it a contradiction?
>Whatever, it was a waste of time.)
But Jim
Devine, James wrote:
>Hasn't he also said that consumer spending is what's been holding up the
>U.S. economy? My point -- and that of Godley & Izureta, who also go beyond
>surface appearances to think about the determinants of private-sector
>spending -- is that this prop can't last. Similarly, E
Fred B. Moseley wrote:
>Doug, are you agreeing with Hyman and this growing consensus? What about
>the recovery of profits and investment? If the cause of this recession is
>mostly falling profits and investment, as we seem to agree, isn't a
>necessary condition for recovery from the recession
Fred M. writes: > I agree completely that the causes of this recession have
little to do with consumption (at least so far), and have mostly to do with
falling profits and investment. This is the main point I have been arguing
in my discussion with Jim D.<
actually, it's not an "argument" in the
I am having a problem with this discussion. Marx, for me, is wholistic.
To say that profits, consumption, or investment causes a crisis seems
problematical -- since all are interconnected and enmeshed with
expectations.
Am I missing something?
--
Michael Perelman
Economics Department
Californ
On Mon, 14 Jan 2002, Doug Henwood wrote:
> Rakesh Bhandari wrote:
>
> >At any rate, the crisis hit Dept I first. Consumption was not a
> >problem. We also know Marx's famous vol II passge in which he
> >criticizes underconsumption. Consumption will now give.
>
> We'll see. Wall Street's favo
On Mon, 14 Jan 2002, Doug Henwood wrote:
> Rakesh Bhandari wrote:
>
> >yes what the previous collapse in basic memory chips suggests is
> >that constant capital had cheapened so considerably (esp relative to
> >consumer goods as is almost the case, I believe) that the rate of
> >profit on th
>>Rakesh Bhandari wrote:
>>
>>>At any rate, the crisis hit Dept I first. Consumption was not a
>>>problem. We also know Marx's famous vol II passge in which he
>>>criticizes underconsumption. Consumption will now give.
>>
>>We'll see. Wall Street's favorite economist, Ed Hyman, has a piece
>>ou
Rakesh Bhandari wrote:
>yes what the previous collapse in basic memory chips suggests is
>that constant capital had cheapened so considerably (esp relative to
>consumer goods as is almost the case, I believe) that the rate of
>profit on the lower value of this constant capital can now be
>gre
>Rakesh Bhandari wrote:
>
>>At any rate, the crisis hit Dept I first. Consumption was not a
>>problem. We also know Marx's famous vol II passge in which he
>>criticizes underconsumption. Consumption will now give.
>
>We'll see. Wall Street's favorite economist, Ed Hyman, has a piece
>out today
Rakesh Bhandari wrote:
>At any rate, the crisis hit Dept I first. Consumption was not a
>problem. We also know Marx's famous vol II passge in which he
>criticizes underconsumption. Consumption will now give.
We'll see. Wall Street's favorite economist, Ed Hyman, has a piece
out today claiming
Jim D states his big idea:
Rather, the idea is that if the growth process as a whole is more
like a "house of cards," i.e., more fragile, a fall in investment is
more likely to have a big effect.
I agreed that the direct, proximate, cause of the recession was a fall in
fixed investment. Wher
Fred, thanks for your thoughtful comments. (For those who haven't been
paying attention, we are discussing only the United States in this thread,
using the BEA data.)
1. I said: >>I should acknowledge that if I recalculate the trend profit
rate in a few years, the trend will probably be differen
Was anybody able to read Fred M's profit rate graphs?
--
Michael Perelman
Economics Department
California State University
Chico, CA 95929
Tel. 530-898-5321
E-Mail [EMAIL PROTECTED]
so accumulation can indeed proceed on the tugan path that is
(however) dependent on volatile fixed capital accumulation and
capitalists' luxury consumption, overcoming shocks along the way (say
the Asia Financial Crisis, the Russian default, Japan's recession
after the value added tax and the
By accident, I sent the following missive before it was finished. Please
respond to this version, not the other.
Fred Moseley writes: >Over, the weekend I read with interest Jim D's
explanation of the "millennium crisis" (i.e. the current recession) on his
website, which was discussed last week
By mistake, I posted my reply to Fred Moseley before I finished it. Please
reply to the complete one, which I'll post soon.
Jim Devine [EMAIL PROTECTED] & http://bellarmine.lmu.edu/~jdevine
>
>thanks for your comments, which definitely help raise the intellectual level
>on pen-l. The last time I discussed this issue, the discussion developed to
>a stage where one individual asserted that my "politics stink." Luckily, it
>got to that low level only off-list.[*]
jim, this is childish
Fred Moseley writes: >Over, the weekend I read with interest Jim D's
explanation of the "millennium crisis" (i.e. the current recession) on his
website, which was discussed last week on PENL. I also read his RRPE 2000
paper on the rise and fall of stagflation. I mostly agree with the latter
and
Over, the weekend I read with interest Jim D's explanation of the
"millennium crisis" (i.e. the current recession) on his website, which was
discussed last week on PENL. I also read his RRPE 2000 paper on the rise
and fall of stagflation. I mostly agree with the latter and strongly
disagree wit
>Devine, James wrote:
>
>>Rakesh writes: >Doug H and Fred M have both argued that spike of
>>profit rate (as conventionally measured) especially in the 90s was
>>a result influx of foreign capital, which reduced borrowing costs. <
>>
>>I missed this. I don't know what Doug and Fred argue here, b
Devine, James wrote:
>Rakesh writes: >Doug H and Fred M have both argued that spike of
>profit rate (as conventionally measured) especially in the 90s was a
>result influx of foreign capital, which reduced borrowing costs. <
>
>I missed this. I don't know what Doug and Fred argue here, but I
>
Bill Burgess writes:> Yes, I did find your talk interesting. Do you have any
similar numbers for other countries, or when you compare your trends for the
US with profit trends in other countries, what are the differences?<
I don't have that data, though the OECD used to publish them. It's clearly
Concerning my notes that I posted on-line (at
http://bellarmine.lmu.edu/faculty/jdevine/FROP/sacramento.htm), Rakesh
writes:
>>> 1. you have confused changes in vcc with changes in occ.<<<
I wrote: >>I don't care, since what's important is the change in K/Y (the
fixed capital-output ratio).
Concerning my notes that I posted on-line (at
http://bellarmine.lmu.edu/faculty/jdevine/FROP/sacramento.htm), Rakesh
writes:
>>> 1. you have confused changes in vcc with changes in occ.<<<
I wrote: >>I don't care, since what's important is the change in K/Y
(the fixed capital-output ratio)
Yes, I did find your talk interesting. Do you have any similar numbers for
other countries, or when you compare your trends for the US with profit
trends in other countries, what are the differences?
I generally agree with your focus on fixed capital and using 'conventional'
profits rates, but
Title: Re: [PEN-L:20986] RE: Re: the profit rate &
recession
concerning my notes that I posted
on-line (at http://bellarmine.lmu.edu/faculty/jdevine/FROP/sacramento.htm), Rakesh
writes:
> 1. you have confused changes in vcc with changes in
occ.<
I don't care, since what
Title: Re: [PEN-L:20980] the profit rate & recession
Rakesh writes:
>Doug H and Fred M have both argued that spike of profit rate (as
conventionally measured) especially in the 90s was a result influx of foreign
capital, which reduced borrowing costs. <
I missed this. I
don&#
Title: Re: [PEN-L:20980] the profit rate & recession
concerning
my notes that I posted on-line (at http://bellarmine.lmu.edu/faculty/jdevine/FROP/sacramento.htm), Rakesh
writes: > 1. you have confused changes in vcc
with changes in occ.<
I don't care,
since what
Title: Re: [PEN-L:20980] the profit rate &
recession
For those interested, I recently gave a
talk at the Marxist School in
Sacramento, California, suggesting that the recent recession is
connected
with the trend rise of the rate of profit. My notes are available
at:
http://bellarmine.lmu
For those interested, I recently gave a talk at the Marxist School in
Sacramento, California, suggesting that the recent recession is connected
with the trend rise of the rate of profit. My notes are available at:
http://bellarmine.lmu.edu/faculty/jdevine/FROP/sacramento.htm
Jim Devine [EMAIL PRO
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