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
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]
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 paralleled the
interest-payments
But minimills are not necessarily specialty steel producers. They began
with low-end steel and remained that way until the 1980s when automotive
sheets were attempted with new technologies. They succeeded up to a
point but the fixed costs per ton in a minimill was so low that the big
producers w
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
- 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
similar
theme in almost all of my wri
>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
>
>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
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
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
> >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
>
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
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:
>
> >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
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]
>
>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
>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
>
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's important is
the c
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't know what Dou
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