falling rate of profit

[william_b_ryan@xxxxxxxxxx]

Referencing again the diagram attached also archived
at http://www.geocities.com/socredus/input-output.jpg

Each firm is making A + B payments.  What is true for
each must be true for all.  For the firms sector as a
whole this means net B, i.e., the differential
between B and A2 in terms of the diagram.  A form of
purchasing power not included in A must distribute
the portion of the product equivalent to net B.  This
can take the form of credit in its broadest sense,
rational and irrational, consumer credit, "favorable"
balance in foreign trade, even bankruptcy.

An important element to the analysis is the fact that
while consumers are receiving A, they are being
charged the totality of A + the differential between
B and A2.

The differential is zero only in the condition of
dynamic stasis, in which case A + the differential =
A.  The differential is a positive number (and
therefore a subtrahend from consumer purchasing
power) if B is increasing, in which case A + the
differential > A.

The portion represented by the differential is not
charged immediately but is delayed in time through
the conventions of accrual accounting with the
subsequent expensing of depreciation.

This delayed expensing does potentially enable a
positive rate of accounting profit for the firms
sector as a whole (because today's costs are charged
against tomorrow's sales which are prospectively
greater than today's costs).

But it is a rate of profit that is necessarily
falling if the ratio of B is increasing to A1 and the
reflux to A + B is limited to the spending from A.