Re: Re: RE: RE: Re: the profit rate & recession

[Rakesh Bhandari <rakeshb@xxxxxxxxxxxx>]

> 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
> > think Marx's theory that the profit rate is determined
> > independently of -- and largely constrains -- the interest rate is
> > a good one. Since I see the profit rate as determined by
> > accumulation, technological change, class struggles, etc., I don't
> > see how a temporary spike in interest rates could determine the
> > profit rate. BTW, the profit rate I use has both interest and
> > non-interest profits in the numerator.
> > JD
>
> I missed that too. I think the reason for the rise - it was much too
> long and extended to be a "spike" - in the profit rate from 1982-97
> was the result of wage cuts, speedup, quicker turnover time,
> outsourcing, etc. etc. Most of the things in Marx's "countervailing
> factors" were in play, and successfully.

why not cheaper circulating capital, raw materials in particular--as
Prabhat Patnaik argues? of course that makes us think out of the
national box; maybe if capital is a global social relation, a
national rate of profit has no more significance as to the state of
the system as a whole than would the profit rate in global shoe or
oil industry.

am i wrong that you have often said that much, if not most, of the
increase in the profit rate as you were measuring was the result of a
decline in interest costs?

Rakesh