Re: Perelman on Brenner

[Doug Henwood <dhenwood@xxxxxxxxx>]

U.S. profit rates are way up from their recession lows. I don't see
anything about that in Brenner's NLR piece. Does that mean the crisis
is postponed?

Doug

michael wrote:

> High wages need not play a role in the crisis as I see it.  Modern industry is
> characterized by very low marginal costs.  Increasing wages for such a
> configuration will not cut into profits very much.  Doubling wages in a
> multibillion-dollar semiconductor factory will not affect the cost structure.
> The problem is that if prices fall to marginal costs, industry will go
> bankrupt.
>
> Firms do try to cut wages when they get squeezed, but the wage cuts are
> generally insufficient.  If all firms cut wages, and price gets pushed back
> toward the now-lower marginal cost, then wage cuts will do no good whatsoever.
>
> eatonak@xxxxxxxxxxxxxxx wrote:
>
> >  My reading of Brenner's argument can be summed up --a bit crudely-- like
> >  this:
> >
> >  Competition among American/German/Japanese Manufacturers ==>
> >
> >  Decline in US Manufacturing Prices ==>
> >
> >  Decline in US Manufacturing Profitability ==>
> >
> >  Decline in US General Profitability ==>
> >
> >  Decline in German/Japanese Manufacturing Profitability ==>
> >
> >  Decline in Global Profitability ==> Global Crisis
>
> --
>
> Michael Perelman
> Economics Department
> California State University
> michael at ecst.csuchico.edu
> Chico, CA 95929
> 530-898-5321
> fax 530-898-5901