last time, all it took for the world to take just one step back from laissez-faire capitalism was

  • democracies collapsing all over europe
  • the great depression
  • a world war (or maybe two)
  • threat of imminent communist revolutions

The new deal era ended and neoliberalism took over because we had some inflation off and on for about 9 years.

  • adultswim_antifa [he/him]
    ·
    4 years ago

    Guess I'm gunna have to be a lib...

    I have heard of the falling rate of profit explanation of stagflation before, and I still don't know whether it's true. The falling rate of profit concept is one of the (many) things I don't really understand yet, but I got the impression Marxists are divided about how far this has progressed and whether it's even a real phenomenon. It seems to me that profits will probably go up and down over time when capitalists invest or don't invest for various reasons. By invest, I mean investing in actual capacity to meet an actual demand, not as in moving numbers from this account to another. As I said I'm pretty ignorant about it.

    The article doesn't really explain it very well. It presents the story, but I don't see a convincing presentation of facts here. There's a bar graph but I don't know what it's graphing or how the rate of profit is calculated.

    We all know capitalists wanted to undo the New Deal from day 1, and there was a sharp increase in oil prices that (probably?) drove up prices for just about everything, and this happened to be the crisis that shifted economic policy. Eventually a crisis causes a shift. Capitalists don't need a mortal threat to want to rig the system in their favor.

    Not saying it's wrong, but I just don't understand why the falling rate of profit is a better explanation than the oil one.

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    • Classic_Agency [he/him,comrade/them]
      ·
      4 years ago

      Yeah I agree thats one of his more simple articles. Here is how he measures the rate of profit for the US economy :

      Readers of my blog and other papers know that I prefer to measure the rate of profit by looking at total surplus value in an economy against total private capital employed in production; to be as close as possible to Marx’s original formula of s/C+v. So I have what I call a ‘whole economy’ measure, based on total national income (less depreciation) for surplus value; net non-residential private fixed assets for constant capital; and adding in employee compensation for variable capital. This is what might be called a general or gross rate of profit. The rate of profit will be lower if we look only at the corporate sector, or the non-financial corporate sector, before or after tax etc.

      I find the rate of profit argument to be convincing because it seems the most logical explanation for why the system seems to be teetering towards decline and collapse. The capitalists wouldn't want to risk a rise of socialism and the decline of imperialism just to 'rig the system in their favour', there must be something forcing them to implement these policies.