Re: Interesting exchange on overproduction (from psn-l)

["David Schanoes" <Schanoes@xxxxxxx>]

Investors don't care about the "rate of profit," which is merely as
statistic that compares profits to corporate asset bases.  What they
care
about is the rate of return on investment, which is the amount of
profit
they get back on top of what monies they put (or leave) in
quarter-to-quarter and year-to-year.

"Overproduction" is mainly caused by "overaccumulation" -- too much
money at
the top, leaving too little spending power at the bottom to justify
big, new
productive investments.
___________________

What the individual or collective investor "cares about" is of little
importance or rather, is of importance to the degree that it reflects
the underlying (temporary) economic predicament.  On Wall Street
everyone knows investors are motivated by two things, and two things
only, fear and greed.  But attributing very much to investor motivation
is like, no it is exactly similar to  attributing either/both the smooth
operation or disruption of markets to speculators.

The declining rate of profit, which is in my opinion the secular,
developed, materialized truth of overproduction has significance to
sustaining the reproduction of capital.

What exactly is meant by "too much money at the top leaving too little
spending power at the bottom to justify big new productive
investments"?

Are you referring to large concentrations of capital crowding out
smaller capitals?  But the big new productive investments in the
1991-1998 period were made exactly at the top.

Are your referring to overaccumulations of money capital in banks-
choking off funds to the bottom?  But that certainly was not the case in
the 1990s, in fact, the acute manifestation of overproduction was
precisely the speculative lending to untested, unsecured, "concept"
enterprises.




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