6. I have suggested another explanation of these important trends, one
based on Marx's distinction between productive labor and unproductive
labor - that an important cause of the declines in the share and the rate
of profit was a very significant increase in the ratio of unproductive
labor to productive labor. I am not sure that this is the correct
explanation of these trends, but I think it may be, and I think that it
worthwhile to at least consider what Marx's theory implies about the
causes of these trends and the likely prospects for the future.
And one important advantage that this theory has over the profit squeeze
explanation is that it provides a consistent explanation of why the share
and rate of profit have only partially recovered in recent decades, in
spite of the loss of workers' power and stagnant real wages - because the
ratio of unproductive to productive labor has continued to increase.
This theory also provides an important prediction about the future - that
if the ratio of unproductive to productive labor continues to increase (as
I expect), then the recovery of the share and rate of profit will continue
to be slow and partial, thus leading to more wage cuts, speed-up,
etc. According to this theory, the US economy is definitely NOT at the
beginning of another "long-wave" period of growth and prosperity, similar
to the early postwar period (with steady real wage increases). The only
partial recovery of the share and rate of profit makes such a return to
more prosperous conditions very unlikely.