[PEN-L:256] rising rate of profit

[James Devine <jdevine@xxxxxxxxxxxxxxx>]

what do pen-l folks think of the following data, which show that the rate
of profit on U.S. business investment has been rising steeply (though have
not attained the rates of the 1960s)?

Rate of Return, Domestic Nonfinancial Corporations (percentages)

average:	total	from current production	net interest
1960-69	10.8		9.7			1.0
1970-79	 8.0		6.4			1.7
1980-89	 7.5		5.2			2.3
1990-97	 8.5		6.7			1.8

yearly:
1990		 8.0		5.2			2.8
1991		 7.5		5.0			2.5
1992		 7.3		5.4			1.9
1993		 7.7		6.1			1.7
1994		 8.9		7.3			1.6
1995		 9.1		7.5			1.6
1996		 9.5		8.2			1.3
1997	 	 9.8		8.6			1.2

source: U.S. Department of Commerce, Bureau of Economic Analysis, SURVEY OF
CURRENT BUSINESS, June 1998, p. 9.

BTW, I don't think that the "Marxian rate of profit" (which includes the
wages of unproductive labor as part of the numerator) is relevant to fixed
investment and the economy's dynamics. Above shows what Fred Moseley terms
the "conventional rate of profit."

It's also interesting the output/capital is rising (the organic composition
of capital is falling) toward the 1960s ratio after the troughs of the
1970s and 1980s. The effective corporate tax rate is falling, while the
ratio of interest to total property income has fallen from its 1980s highs.
All of these  boost the after-tax profit rate on enterprise in recent years.

Capital's share of domestic income is roughly the same for the 1990-7
period (13.7%) as for the 1970s (13.8%), up from the 1980s (11.9%) but down
compared to the 1960s (21.5%). But behind the 1990-7 average, there's a
steep rise in capital's share after 1991.

in pen-l solidarity,

Jim Devine jdevine@xxxxxxxxxxxxxxx &
http://clawww.lmu.edu/Departments/ECON/jdevine.html
"Segui il tuo corso, e lascia dir le genti." (Go your own way and let
people talk.) -- K. Marx, paraphrasing Dante A.