Article

Explaining the Global Economic Crisis

Authors:
To read the full-text of this research, you can request a copy directly from the author.

Abstract

During the late 1960s, the long post-war economic boom which had characterised the advanced capitalist countries began to fade away. In its wake came an equally long era of stagnation, decline, and political and economic turbulence. Unemployment, inflation, falling profitability, business failures and bankruptcies were the new order of the day, and it became commonplace to see fearful headlines about the possible collapse of the global financial system or even of accumulation itself.

No full-text available

Request Full-text Paper PDF

To read the full-text of this research,
you can request a copy directly from the author.

... The under-consumptionist/ Monthly Review school has argued that the stagnation tendencies of the advanced capitalist economies in the monopoly-finance stage have created the phenomenon of financialization as the surplus is invested in the financial sector something that exacerbates the problem of slow capital accumulation FORUM FOR SOCIAL ECONOMICS 8 and the deficiency of aggregate demand. Placed more within the classical Marxian tradition, Shaikh (1999), Dumenil and Levy (2004), Mohun (2005), Harman (2007), Moseley (1997) have insisted on the validity on the explanatory power of Marx's law of the falling rate of profit as far as the crisis of the 1970s is concerned but they disagree on the extent of the recovery of the profitability during the neoliberal period. ...
... It is well documented that profitability in the US economy started to fall in a significant way sometime in the 1960s disrupting the process of capital accumulation and growth, reaching its lowest point around 1982, and rebounding to a certain extent thereafter (Shaikh and Tonak 1994;Moseley 1997;Shaikh 1999;Mohun 2005). This behaviour of the rate of profit indicates that the entire post war period can be conveniently subdivided into three different stages, ''the golden age'' (1948)(1949)(1950)(1951)(1952)(1953)(1954)(1955)(1956)(1957)(1958)(1959)(1960)(1961)(1962)(1963)(1964)(1965), the crisis years (roughly 1966-1982) 5 Table (FAT), K (corporate) ¼ corporate nonresidential net capital stock, Table 4.1, line 13. 5 It is not entirely correct to describe the late 1960s as a crisis period per se. ...
... In Figures 2, 4 and 8 and Table 1 it is evident that a rising organic or materialized composition of capital (the ratio of dead to living labor) and a rising rate of surplus value produced a fall in the rate of profit which reached its lowest point in 1982. The fall in profitability was exacerbated by the continuous increase in the use of unproductive labor, which resulted in a fall in the profit share as well (Shaikh and Tonak 1994;Shaikh 1987Shaikh , 1992Shaikh , 1999Moseley 1997;Mohun 2005). ...
Article
Full-text available
This paper uses data from the US economy and finds that among Marxist theories of crisis the marxian law of the falling rate of profit as a result of the increasing composition of capital explains the crisis of the 1970s and the end of the “golden age” of capital accumulation. Despite the dramatic increase in the rate of surplus value and the limited fall in the capital-output ratio profitability has not recovered sufficiently during the neoliberal period due to the survival of lagging capitals and the increasing use of unproductive labor. Financialization is one of the effects of low profitability. In the recent years financial bubbles the associated wealth effects and the significant increase in the debt of all domestic sectors raised aggregate demand and provided the stimulus for the anemic growth of the period. The break of the bubbles implies the return to the weak fundamentals of the real economy and possibly a deep and prolonged period of stagnation and crisis.
... The model is mainly built upon the Post-Keynesian Agent Based-Stock Flow Consistent (AB-SFC) models implemented by (Caiani et al. 2016;Caiani et al. 2018b;2018c). I introduce within this framework the possibility of classicalfashioned 'induced' and 'biased' technical change processes as the heterogeneous consumption-good firms choose both the intensity and direction of innovation towards labour-or capital-saving choice of techniques, thereby adopting the new production technique depending on a classical profitability criterion (Okishio 1961;Shaikh 1978;1999;Nakatani 1979;Park 2001). ...
... Then, the evolutionary technical change process has been modelled by following the two steps procedure implemented in the 'K+S' models (Dosi et al. 2010), although here this process takes place within the consumptiongood sector (i.e. with 'disembodied' technical change). As anticipated, we also have a classical-fashioned directed technical change process as the heterogeneous consumption-good firms choose both the intensity and the direction of the innovation towards a labour-or capital-saving choice of technique, and as they decide to adopt the new production technique depending on a classical profitability criterion (Okishio 1961;Shaikh 1978;1999;Nakatani 1979;Park 2001). This modelling framework allows us to let the 'innovation bias', that is the bias towards the choice of labour-saving production techniques, be an emergent property of the evolutionary technical change process engaged by heterogeneous consumption-good firms. ...
... Each period firms C undertake an evolutionary innovation process and they decide to adopt the new random technology only by comparing its expected profit rate with the actual one Okishio (1961), Shaikh (1978), Nakatani (1979), Shaikh (1999), Park (2001), and Shaikh (2016). The innovation process starts after the decision about the desired investment in the R&D activity, which is a (fixed) share γ of the expected sales (Silverberg and Verspagen 1996; Dosi et al. 2010) and (Caiani et al. 2019), as follows: ...
Article
Full-text available
This paper introduces the classical idea about the so-called directed and induced technical change (ITC) within a Keynesian demand-side and evolutionary endogenous growth model in order to analyse the interplay between technical change, long-run economic growth and functional income distribution. The ITC process is analysed within an Agent-Based Stock-Flow Consistent (AB-SFC) model, wherein credit-constrained heterogeneous firms choose both the intensity and the direction of innovation towards a labour- or capital-saving choice of technique. In the long-run, the model reproduces the so-called ‘Kaldor stylised facts’ (i.e. a purely labour-saving technical change process), however during the transitional phase the model shows a labour-saving/capital-using innovation pattern, as the aggregate output-capital ratio decreases until it stabilises in the long-run, and the labour share persistently decline as observed during the last decades in many advanced (and developing) economies. Within the present model, we can ascribe these results mainly to the effect exerted by the interplay between directed and biased technical change, the process of wage formation and the dynamics of aggregate demand. In order to stress the effective role of the innovation bias on the model dynamics, the baseline scenario has been compared with a ‘counterfactual’ scenario wherein ‘neutral’ technical progress is at work. The main findings are also confirmed by computing a sensitivity investigation on the key parameters shaping innovation and wage formation process.
... One debate is how to valorise capital at current prices (i.e. replacement costs) as carried out in most work, including Shaikh (1999), Duménil and Lévy (2011a), Kotz (2009Kotz ( , 2013, , 2010, and Basu and Vasudevan (2013), or at historic cost, as preferred by only Kliman and Freeman (see Kliman and McGlone, 1988;Freeman and Carchedi, 1996;Kliman, 2011) within the Temporal Single System Interpretation of Marx's theory of value. ...
... Regarding the former, Duménil and Lévy (2011a) claim that profit tax deductions are necessary to realistically reflect profit flows. Regarding the latter, it is noted that net stock measures overstate profit rates since net stocks decline over time (Shaikh, 1999;Basu and Vasudevan, 2013). Although gross stocks could be an alternative measure, there is no available data. ...
... According to Kotz (2009), however, higher demand leads to overinvestment, which becomes excessive due to asset price bubbles. For Shaikh (1987Shaikh ( , 1999Shaikh ( , 2011, capital-intensive production lowers profit rates, which increases the composition of capital. Finally, Moseley (1991) argues that the growth of the ratio of unproductive to productive labour leads to the fall in profits. ...
... Kotz (2009), by contrast, states that overinvestment is caused by higher demand that reaches above its normal level as a result of asset price bubbles. Shaikh (1987Shaikh ( , 1999Shaikh ( , 2011 finds that profit rates fall as a result of a rise in capital-intensive production that results in an increasing composition of capital. For Moseley (1991), however, the main reason behind the fall in profits was the growth in the ratio of unproductive to productive labor (see also Mohun 1996Mohun , 1998. ...
... For example, Dum enil and L evy (2011) make the case that profit tax deductions are necessary to realistically reflect profit flows. Basu and Vasudevan (2013) find that net stock measures overstate profit rates because net stocks depreciate over time (Shaikh, 1999). Gross stocks might be used as a substitute measure, but appropriate data are lacking. ...
... On the one hand, Skott and Zipperer (2012), Lévy (2012, 2014), Kiefer and Rada (2015), Blecker (2016), Pierce andWisniewski (2018), Fiebiger (2018), Setterfield (2019), Nersisyan and Wray (2019) and Setterfield and Avritzer (2019) agree that there is a declining trend in capacity utilization in the US: Evidence of their views may be sourced from FRB estimates. On the other hand, Shaikh (1987Shaikh ( , 1989Shaikh ( , 1992Shaikh ( , 1999Shaikh ( , 2016 and Nikiforos (2016Nikiforos ( , 2018Nikiforos ( , 2019b disagree with this, based on a measurement error argument, as the FRB estimates do not correctly capture the true value of capacity utilization. ...
... Recent contributions have mentioned the possibility of a declining trend in capacity utilization in the US since the 1970s. However, no consensus has emerged on the empirical evidence: Some authors severely criticized FRB's measure of capacity utilization (Shaikh 1987(Shaikh , 1989(Shaikh , 1992(Shaikh , 1999(Shaikh , 2016Nikiforos 2016Nikiforos , 2018Nikiforos , 2019b, on the basis that they consider the estimate of capacity utilization of the Federal Reserve Board not to be appropriate. ...
Article
Recent contributions have mentioned the possibility of a declining trend in capacity utilization in the US since the 1970s. However, no consensus has emerged on the empirical evidence. The aim of this paper is to identify if such a declining trend in capacity utilization exists in the US economy: New empirical evidence is shown confirming that this is the case, at least since 1989.
... The capital stock (K) is taken from the Mas, Pérez & Uriel (2011), by far the most complete and rigorous database, being the reference for the EU-KLEMS project (Mas, Pérez & Uriel, 2013) 5 . This measure is: i) at replacement costs, although there are also strong reasons for the use of the capital stock at historic cost, as the adherents of the Temporal Single System Interpretation (TSSI) claim (Kliman, 2011); ii) on net terms (net), though Shaikh (1999) explains the advantages of the gross capital stock (and at replacement cost), and iii) without residential assets (nr), and excluding the activities considered unproductive. ...
Article
Full-text available
The paper provides an in-depth analysis of profitability in Spain between 1995 and 2014, showing that behind the asset-price inflation of the growth period and its corresponding macroeconomic imbalances, an underlying problem of capital valorization can be found. For this purpose, a study of various measures of profitability is carried out based on the concept of productive labor and highlighting the role of finance (interest rates and indebtedness). The evolution of the profit rate in previous years is also shown, together with a comparison with countries in the Eurozone, both in the most advanced areas and in the periphery. The paper reveals the large extent of the underlying profitability crisis, with a huge fall of profit rates from the late sixties, during the period of the housing boom, and throughout the subsequent recession. In addition, this drop in profitability stands out in relation to other economies of the European periphery. Hence, the study puts the rate of profit at the center of the debate on the Great Recession in Spain, despite its absence in much of the economic literature.
... Since the 1970s, many have studied the movement of the profit rate and its determinants in advanced capitalist countries in the post WWII period. There is a general consensus that the profit rate had fallen in the US and other advanced capitalist countries between the mid-1960s and the early 1980s and the fall of the profit rate was a major factor that contributed to the economic stagnation and instabilities in the 1970s and the 1980s (among others, see Gordon, Weisskopf, and Bowles 1987;Armstrong, Glyn, and Harrison 1991;Moseley 1991;Shaikh and Tonak 1994;Moseley 1997;Brenner 1998;Shaikh 1999). ...
Article
Full-text available
In this paper we study the long-term movement of the profit rate and related variables in the UK, the US, Japan, and the Euro-zone. Since the mid-19th century there have been four long waves in the movement of the average profit rate and rate of accumulation. The average profit rate tended to fall between the late 19th century and the late 20th / early 21st century. The average profit share fell substantially in the transition from the UK hegemony to the US hegemony. The fall of the profit rate and profit share reflected rising wage and taxation costs. Our findings raise important questions regarding the future development of the capitalist world-economy.
... Brenner's analytical frame thus encounters problems in explaining how periods of accelerated technical change-such as what occurred after the Volcker shock of the early 1980s-can correspond to a rising profi t-rate. 2. Brenner 2000Brenner , 2001Brenner , 2004 3. Of particular note, see Shaikh 1999;Duménil and Levy 2002b;Fine, Lapavitas, and Milonakis 1999;Freeman 1999;and Zacharias 2002. 4. Zacharias 2002. ...
Article
This paper situates the subprime crisis in the context of the performance of the American economy over the last twenty-five years. The restructuring of the US economy is briefly reviewed, followed by an examination of some of the contradictions of the neoliberal model. Particular emphasis is placed on understanding the reasons behind stagnant investment, and how the US finance-led accumulation-régime has become dependent upon, and threatened by, credit-creation delinked from the financing of fixed-capital formation. I argue that while the defeat of the remnants of the New-Deal/Civil-Rights liberal-democratic coalition has provided the political context for the bold re-assertion of the prerogatives of capitalist owners, the neoliberal model has not provided a path out of problems of stagnation and growing debt-dependency that presently plague the US (and global) economy. Further, I argue that evidence suggests that the post-1982 restoration of profitability that underpinned the relative improvement of US economic performance has peaked, and that compelling historical and theoretical reasons exist to expect that the profit-rate will decline in the coming decade. This will introduce additional stresses on the current debt-structure of the US economy, triggering a period of prolonged crisis and economic dislocation. The conclusion is that the US economy faces the spectre of a protracted crisis associated with the reassertion of the falling rate of profit.
... Furthermore, in the denominator of the rate of profit, we use the net fixed capital stock as is used in similar studies. 12 It is interesting to note at this juncture that Shaikh (1999) has argued that for the estimation of the (general or net) rate of profit it is better to use the gross instead of net capital stock. The idea is that the measurement of depreciation is often of dubious quality and potentially may give rise to certain biases in the estimation of net capital stock, and therefore the rate of profit. ...
Article
This paper by using the categories of productive and unproductive labor and by extending and further elaborating the data series utilized in Shaikh and Tonak (1994) reveals a sharp expansion of the unproductive activities in the U.S. economy during the period 1964-2007. The combination of growing productivity and the stagnant or even falling real wages of productive workers increased the rate of surplus value in the recent decades to unprecedented highs. As a consequence, the general rate of profit from the early 1980s onwards was also rising until the last years of our analysis; meanwhile the net rate of profit remained at levels much lower than those of the 1960s and the slightly rising trend during the post-1980s has been already reversed. The patterns of these crucial variables reveal startling similarities with the onset of the slowdown that started in the mid- to late 1960s. JEL classification: B5, E1, O51
... Since the 1970s, many have studied the movement of the profit rate and its determinants in advanced capitalist countries in the post WWII period. There is a general consensus that the profit rate had fallen in the US and other advanced capitalist countries between the mid-1960s and the early 1980s and the fall of the profit rate was a major factor that contributed to the economic stagnation and instabilities in the 1970s and the 1980s (among others, see Gordon, Weisskopf, and Bowles 1987;Armstrong, Glyn, and Harrison 1991;Moseley 1991;Shaikh and Tonak 1994;Moseley 1997;Brenner 1998;Shaikh 1999). ...
Article
Full-text available
In the contemporary conjuncture financialization is driving a fundamental reorganization of American capitalism and increasingly that of other economies significantly impacting the trajectory of the world-system. This paper interrogates the nature and extent of financialization, the ways it is adding to systemic risk with attention to the future of the dollar, and implications for the relationship between US- based finance and new emerging centers of the world-system.
... Since the 1970s, many have studied the movement of the profit rate and its determinants in advanced capitalist countries in the post WWII period. There is a general consensus that the profit rate had fallen in the US and other advanced capitalist countries between the mid-1960s and the early 1980s and the fall of the profit rate was a major factor that contributed to the economic stagnation and instabilities in the 1970s and the 1980s (among others, see Gordon, Weisskopf, and Bowles 1987;Armstrong, Glyn, and Harrison 1991;Moseley 1991;Shaikh and Tonak 1994;Moseley 1997;Brenner 1998;Shaikh 1999). ...
Article
Full-text available
This paper addresses the issue of the globalization of food production and consumption in the last half-century through the medium of fats and oils, or lipids. The dual traits of being essential for human life and signifying a diverse range of regional styles of consumption make lipids an ideal bulk commodity to study international differences in food. FAOSTAT food balance sheet data on fats and oils from 1961 and 2003 are interrogated using correspondence analysis, which provides a means of displaying the principal trends in large tables of data. The analyses reveal evidence for a global convergence in lipid availability from 1961 to 2003 (from animal fats to vegetable oils), in addition to a trends towards an increased disparity which at the extremes is between the wealthiest, as importers of diversity, and least affluent regions, as the most resistant areas to homogenizing trends.
... Since the 1970s, many have studied the movement of the profit rate and its determinants in advanced capitalist countries in the post WWII period. There is a general consensus that the profit rate had fallen in the US and other advanced capitalist countries between the mid-1960s and the early 1980s and the fall of the profit rate was a major factor that contributed to the economic stagnation and instabilities in the 1970s and the 1980s (among others, see Gordon, Weisskopf, and Bowles 1987;Armstrong, Glyn, and Harrison 1991;Moseley 1991;Shaikh and Tonak 1994;Moseley 1997;Brenner 1998;Shaikh 1999). ...
Article
This paper presents a cross-country empirical investigation of the impact of Foreign Direct Investment (FDI) on manufacturing wages. Our results indicate that FDI-Flows have a negative impact on overall wages in the manufacturing sector and this impact is stronger for female wages. We argue that one possible explanation for such an impact may be a decrease in the bargaining power of labor due to new labor market arrangements in a global economy where capital is free to move across countries in search of more favorable conditions. This decline in labor power also tends to have a greater impact on the more vulnerable workers female workers whose bargaining positions have been traditionally lower than male workers.
... 4 Beginning with the works by Gillman (1957) and Mage (1963), considerable research has been devoted to the historical movement of the general rate of profit in the U.S., both theoretically and empirically. It is beyond the immediate scope of this paper to address the incidents and particulars surrounding the extraordinary bulk of works regarding the measurement of rates of profit or the subsequent bequest of prolific debates they have given birth to. 5 However, it is likely that the estimations found in Shaikh (1987; 1989; 1990; 1992; 1999; 2011 ), Moseley (1988 1997;, and Duménil and Lévy (1993a; 1993b; 1993c; 1994; 2002a; 2002b; 2004; 2007) are the ones grounded on stronger theoretical roots. 6 Following these three authors, the general ...
Article
Full-text available
Despite its well-known importance and the relatively abundant theoretical literature, there have been few empirical studies specifically dealing with the relationship between the rates of interest and profit. The current paper aims at contributing to the study of the relationship between the rates of interest and profit by offering an empirical analysis of the United States (U.S.) economy during the period 1869-2009, which has rendered the following findings: 1) the general rate of profit has fixed an upper limit to the real short-term and long-term Federal Funds interest rates; 2) the real long-term Federal Funds interest rate has undergone movements similar to those of the general rate of profit, whereas the short-run Federal Funds interest has experienced opposite movements regarding the latter; and 3) there is evidence supporting heterodox theories emphasizing that monetary policy affects the distribution of income through the modification of the rate of profit, which entails that monetary factors can be directly allowed in the determination of the rate of profit.
... 4 Beginning with the works by Gillman (1957) and Mage (1963), considerable research has been devoted to the historical movement of the general rate of profit in the U.S., both theoretically and empirically. It is beyond the immediate scope of this paper to address the incidents and particulars surrounding the extraordinary bulk of works regarding the measurement of rates of profit or the subsequent bequest of prolific debates they have given birth to. 5 However, it is likely that the estimations found in Shaikh (1987; 1989; 1990; 1992; 1999; 2011 ), Moseley (1988 1997;, and Duménil and Lévy (1993a; 1993b; 1993c; 1994; 2002a; 2002b; 2004; 2007) are the ones grounded on stronger theoretical roots. 6 Following these three authors, the general 4 A rate of profit must be differentiated from the share of profit (which can be obtained by dividing profit by total income and therefore is a ratio between two flows and reflects a straightforward measure of distribution) or from the profit margin (a ratio of profit to costs). ...
Article
The current paper aims to contribute to the study of the relation between the interest rate and the rate of profit by presenting an empirical analysis of the United States economy during the period of 1869-2009. The main findings rendered are: 1) the general rate of profit has set an upper limit for the real short-term and long-term interest rates; 2) the real long-term interest rate has undergone similar changes to those of the general rate of profit, whereas the real short-term interest rate has experienced movements opposite to the latter; and 3) evidence supports heterodox theories which stress that monetary policy affects the distribution of income through the modification of the rate of profit.
... Respecto del denominador, se puede utilizar el stock de capital bruto, como defiende Shaikh (1999), o neto, como realizan la mayoría de autores. ...
... Al no incluir el desgaste, los retiros de capital se toman en cuenta únicamente al final de su vida útil. La utilización del ABC es defendida por Shaikh (1999), pues conforme se deprecian los elementos del activo fijo, el desembolso total vuelve a la forma dinero, por lo que "estos descuentos de depreciación acumulada pueden mantenerse en forma de dinero o en activos financieros, o incluso reinvertidos. Pero en cualquier caso, cuentan como parte del valor del capital total así como el valor depreciado de las máquinas, ya que es la recuperación de la suma de ambos lo que permite la continuación de la empresa" (Shaikh, 1999: 106) 11 . ...
Article
Full-text available
En este artículo se lleva a cabo un análisis de diferentes expresiones de la rentabilidad del capital en la economía venezolana, en función de diversas medidas del excedente empresarial y el acervo de capital, para el período 1957-2006. El espacio económico de análisis es el ámbito capitalista no rentístico, excluyendo la actividad petrolera e inmobiliaria, se distinguen los sectores público y privado, así como el ingreso mixto en la última fase. La perspectiva teórica de referencia es la teoría laboral del valor, por lo que se considera que la categoría de la tasa de ganancia constituye el fundamento del crecimiento económico a partir de su incidencia en la inversión
... una ca?da de los ingresos significativa entre 1968 y 1979. Una variedad de estudios para distintos pa?ses del centro y la periferia demuestra que la ca?da de la rentabilidad desde fines de los a?os sesenta y hasta fines de los setenta, fue una marca distintiva del per?odo (v?ase Moseley, 1997;Shaikh, 1999;C?mara Izquierdo, 2006;Maniatis, 2005;Venida, 2007). ...
Book
Full-text available
Prólogo El comienzo del siglo XXI ha encontrado a la Argentina y a buena parte de los países latinoamericanos sumidos en una suerte de cambio de época luego del huracán neoliberal que arrasó estas tierras durante largos años. El libro de Emiliano López nos ofrece numerosas y valiosas claves para pensar e interpretar este tiempo histórico a partir de una propuesta teórica y metodológica sumamente rica y creativa, la cual abreva en diferentes tradiciones dentro de las ciencias sociales. Se trata de un ejercicio que amerita ser reconocido, sobre todo si se tiene en cuenta que proviene de un economista de formación, graduado en la Universidad Nacional de La Plata, que logra articular en su planteo una diversidad de conceptos y métodos de, entre otras disciplinas, la sociología, la ciencia política y el análisis crítico del discurso, dando forma a una caracterización abarcadora de lo que él cataloga como un nuevo modo de desarrollo tras la debacle del régimen de convertibilidad. En términos teóricos, Emiliano ancla sus análisis y sus reflexiones en una perspectiva gramsciana que, en sus palabras, “procura establecer una ruptura teórica con las tendencias en gran parte de las investigaciones sociales a destacar las dimensiones políticas o económicas como determinantes de última instancia. Identificar cuál de estos elementos predomina en un momento histórico concreto corresponde a la investigación empírica y no puede ser mera especulación teórica. Es así que proponemos una síntesis teórica que nos permita abordar con mayor complejidad la aproximación empírica que es el eje central de este libro. Dicha síntesis tendrá como aspectos clave –no excluyentes– en la determinación del orden social a los siguientes: los procesos económicos de clase, la materialidad del Estado, los discursos políticos y la construcción de hegemonía”. Como el lector del libro tendrá ocasión de apreciar, semejante esfuerzo teórico arroja resultados esclarecedores para interpretar tanto la historia argentina reciente (el “kirchnerismo”), como cualquier coyuntura particular de un modelo de acumulación. Otro aspecto a destacar del marco analítico elaborado por el autor se vincula con el hecho de que focaliza su mirada en las clases sociales, pero “rompiendo” a cada una de ellas en las distintas fracciones internas que las conforman. Ello, a partir de una propuesta metodológica rigurosa que, mediante una relectura de, entre otras fuentes, las Cuentas Nacionales y la Encuesta Permanente de Hogares, seguramente servirá de base para investigaciones futuras. En este punto interesa remarcar que, si bien es muy valiosa en sí misma, la propuesta metodológica elaborada le permite a Emiliano darle a los sectores subalternos un lugar relevante en la explicación del devenir de los procesos sociales, frente a perspectivas ampliamente difundidas en las ciencias sociales vernáculas que tienden a conferirle un rol central, si no prácticamente excluyente, a los sectores dominantes. Sin duda, esto redunda en una lectura mucho más profunda que las habituales sobre procesos de tanta complejidad y, por ende, tan difíciles de aprehender. Con base en este esquema teórico-metodológico, el análisis del autor llega hasta el año 2011 y reconoce dos fases bien definidas en el proceso de emergencia y consolidación de un nuevo modo de desarrollo en el país y, asociado, de un proyecto hegemónico de cuño “neo-desarrollista”. (Extracto del prólogo de Martín Schorr, Buenos Aires, 25 de febrero de 2015)
... The distinctive perspective of a Marxist value paradigm has also been usefully clari ed in a number of contributions to the recent debate about Brenner's global turbulence thesis. See Shaikh 1999, andFine, Lapavitsas andMilonakis 1999. Although both of these articles offer cogent critiques of Brenner 's particular variant of Marxist rate of pro t theory, the central role of pro tability in Brenner 's work has enabled him to construct complex and powerful accounts of the recent trajectories of the US, Japanese and German economies. ...
... On the one hand, Skott & Zipperer (2012), Duménil & Lévy (2012, Kiefer & Rada (2015), Blecker (2016), Setterfield (2018), Pierce & Wisniewksi (2018), Fiebiger (2018), Nersisyan & Wray (2019) and Setterfield & Avritzer (2019) agree that there is a decreasing trend in capacity utilisation in the US: They all rely for this on Federal Reserve Board (FRB, hereafter) estimates. On the other hand, Shaikh (1987Shaikh ( , 1989Shaikh ( , 1992Shaikh ( , 1999Shaikh ( , 2016 and Nikiforos (2016Nikiforos ( , 2018 disagree with this based on a measurement error argument, it means that the FRB estimates do not capture correctly the true value of capacity utilisation. First, we will analyse empirically the FRB time series and its critiques. ...
Preprint
Full-text available
Recent contributions have mentioned the possibility of a decreasing trend in capacity utilisation in the US since the 70's. However, no consensus has emerged on the empirical evidence. Comparing the rate of capacity utilisation of the Federal Reserve Board [FRB] with the Full Utilisation Rate [FUR] and the National Emergency Rate [NER] of the Census Bureau, new empirical evidence is shown confirming that there exists such a decreasing trend in capacity utilisation in the US economy, at least since 1989. JEL classification: D24, E22.
... If they are right and if economic growth follows a long wave path, then a long wave pattern should be found in several profit rate indicators. These processes have been empirically researched from different approaches by a number of authors, such as Poletayev, Shaikh, Fontvieille, Reati, Silver, Kuczynski and others 3 (see Kleinknecht 1992, p.6), and, most recently, the works of Dumenil and Levy (1993), Moseley (1997), Brenner (1998), Shaikh (1999, Goldstein (1999), Li and Hanieh (2006), Li et al. (2007), the model of which is going to be used as a benchmark for our comparative analysis in section four. ...
Article
Full-text available
Long waves research is currently dominated by two main approaches: a “neo-Schumpeterian” and a “social structure of accumulation” paradigm. While the former fits into evolutionary economics, the latter is rooted within Marxian and Keynesian macroeconomics. Although each research school continues with its own approach, without knowing what the other school has learned, a similarity between the two is inevitable, since long wave (or cycles) theory is a common framework for research. This makes both theories well-suited to help in understanding the factors underlying the financial and economic crises of capitalism. The primary purpose of this paper is to compare their respective accounts in this field, from a theoretical and analytical perspective, concluding that, despite the different premises and approaches of both schools, the resulting periodizations of capitalism elaborated by each theory are quite similar.
... In the case of conventional measures, despite including certain assets that are not part of the Marxian concept of capital, they are relevant since the purpose is to have a complete picture of the complex concept of profitability in a context of asset-price inflation. 7 In conclusion, the indices of profitability used in this research are the following: Shaikh (1999) explains the advantages of the gross capital stock at replacement cost. 7 Anyway, financial assets are part of the set of disbursements already carried out by capitalists. ...
... However, the events that generated the initial transition to financial activities within the US economy are still widely debated and contested. For instance, authors arguing within the classical Marxist tradition (Shaikh 1999;Zacharias 2002) tend to focus on the adoption of labor-saving technology within the 'productive' sectors throughout the post-war period, a process initiated by inter-capitalist competition, which brought down the rate of profit and depressed accumulation and investment in traditional industries. In contrast, scholars who stress the importance of aggregate demand-side factors as growth stimulants to generate private investment (Foster 1990(Foster , 2006Foster and McChesney 2009;Krugman 2013), emphasize the decline of Keynesian fiscal state policies as the catalyst for persistent stagnation in the manufacturing and non-financial sectors. ...
Article
Full-text available
Financialization can be partially attributed to the decline in the US manufacturing profit rate since the 1970s. However, scholars have not reached a consensus regarding the factors responsible for stagnation in manufacturing. This paper employs an Auto-regressive Distributed Lag (ARDL) model to test the impact of both national defense and government consumption expenditure on manufacturing profitability in the United States from 1973, the onset of stagnation, to 2015. Its goal is twofold: to determine whether stagnation is associated with a decline in Keynesian policies, and to examine the potential for state fiscal programs to reverse this trend and facilitate a shift of private investment away from the financial sector and into manufacturing. The paper finds that the impact of government consumption expenditure on the manufacturing profit rate is positive and significant in both the short-term and long-term (from 1973-2015 and 1973-1993), while the long-term impact becomes negative from 1983 to 2015, when the financial sector profit rate began its upward trend. This casts doubt on whether Keynesian fiscal policies could be employed to restore a healthy profit rate in the manufacturing sector and lower unemployment. ARTICLE HISTORY
... Más allá de las diferencias en las distribuciones, en general todos los autores que miden la tasa de ganancia toman un criterio de consumo anual del capital adelantado. La excepción podría serShaikh (1999), quien toma la distribución rectangular afirmando que al capitalista le importa el valor total de la maquinaria como adelanto de capital, y no su valor depreciado (stock neto de capital).34 En caso de no contar con las series de inversión de la empresa desde el comienzo del ejercicio de la empresa, y como no es posible calcular los flujos de inversión para los años en que no hay datos, Guerberoff propone estimarla a partir de medir la sensibilidad del stock de capital de cada empresa durante los años en que no hay información. ...
Article
Full-text available
This paper aims to present a methodology for calculating the rate of profit of an individual industrial capital using annual reports and accounting balance sheets from companies and developments presented by Marx. Despite the importance of the estimation of the rate of profit as an indicator of capital appreciation capacity, few studies have advanced in the study of the specific problems in calculating it. In general they take the margins as a measure of profitability, leaving aside the advanced capital to be valued. Given our objective, the first section of the paper is aimed at qualitatively defining our object of study. Then we proceed with a bibliographic review of the subject being studied from the early 19th century until today. Finally, we develop a methodology that considers the reestimation of fixed constant capital to be valued, as well as earnings obtained to determine the rate of profit of the individual capital.
... The scholars who insist on the theory of increase in the organic composition of capital, such as Mario (1987) [12], Anwar (1999) [13], etc. are called the orthodox school. The school believes that, as a result of the continuous development of capitalism, the mechanization leads to the increase in the organic composition of capital, which means the labor force is excluded from the production process. ...
Article
Full-text available
This article makes a macro-quantitative analysis on the relationship between the interest rate and the general profit rate, studies their interaction relationship in China from 1990 to 2014 with the Structural Vector Autoregressive (SVAR) model, and tests the erosion effect of the benchmark lending rate on the general profit rate. The results show that the changes of the benchmark lending rate have a significant negative effect on the general profit rate and the impulse response function analysis shows that the effect is enduring and lasts for 6 years; the variance decomposition results show that the changes of the benchmark lending rate have a high degree of explanation, and the final contribution rate is stabilized at approximately 33%. With a correct understanding of the interaction relationship between the interest rate and the general profit rate, we can adjust the interest rate policy to slow down the decrease in the general profit rate and then mitigate the negative effect of the decrease on economic growth.
Article
Full-text available
This paper explores aggregate profitability in Italy from 1994 to 2005 in its connection with structural change and gender employment disparities. The aggregate profit rate declined, but the profit share did not so. Male variables tend to have more weight than female ones in explaining aggregate outcomes. Structural change had a major role too, as the economy specialized in sectors with falling real wages and wage shares, the financial sector especially. Further falls in the wage share and widening wage gaps may not guarantee a rise in profitability.
Preprint
In this paper I develop a model that combines, on the one hand, a class-struggle theory of wage determination and induced technical change, and on the other hand, a neo-Luxemburgian theory of demand-driven growth with capacity utilization at the targeted level in the long run. There are two different regimes. In the first of these, called the profits without investment regime, rising profitability fails to generate corresponding increases in capital accumulation. In the second, called the breakdown regime, the profit rate shows a tendency to fall, putting businesses in an increasingly precarious financial situation and eventually setting the stage for a crash. Although the model simplifies reality in important ways, I note some similarities between the different regimes and different periods in US history.
Article
Dumenil-Levy and Foley (DLF) attempt to show that the falling rate of profit can be induced by applying Okishio's criterion of technical choice to DLF's framework on the evolution of potential technical change. This paper examines what would happen if Shaikh's criterion is applied to DLF's framework on the evolution of potential technical change. The following result is derived: while both criteria induce the K/L (capital-labor ratio) — increasing falling rate of profit at a sufficiently high wage share, only Shaikh's criterion induces the K/L — increasing falling rate of profit under a constant real wage (or a low wage share).
Article
G. A. Cohen's Karl Marx's Theory of History (KMTH) bears examination from the standpoint of the renewed critique of capitalism promoted by the anti-globalization movement. Cohen's own current view of his book places it firmly within the framework of rational-choice Marxism, which is characterized by a nihilist attitude towards the entire tradition of Marxist political economy. KMTH itself displays an ambivalent attitude towards Capital, simultaneously basing itself on a close reading of Marx's economic writings and seeking to make ever more explicit Cohen's rejection of the labor theory of value. This results in significant conceptual tensions, notably in Cohen's effort sharply to distinguish between the material and the social, but also weakens KMTH's account of the fettering of the productive forces by capitalist relations of production. The effect — particularly when combined with Cohen's espousal of rational-choice Marxism — is, regrettably, to shut him off from the current renaissance of Marxist political economy.
Article
Full-text available
This paper aims to contribute to the theoretical discussions on the effect of military spending on the economy. To this end, it first modifies the circuit of capital model proposed by Duncan Foley in 1982, which represents money value stock-flow relations for capital in Capital Volume II. Foley's model is extremely useful for examining the relationship between military spending and the rates of profit as it allows one to specify the parameters in both the military and civilian sectors. By incorporating the military sector, the adapted model shows that a larger military sector is associated with a higher rate of profit. Second, the paper provides some empirical evidence on the US for 1968-2008 for the main proposition of the theoretical model. ARTICLE HISTORY
Article
Full-text available
This paper offers a synoptic account of the state of the debate among Marxist scholars regarding the current structural crisis of capitalism, identifies two broad streams within the literature dealing, in turn, with aggregate demand and profitability problems, and proceeds to concentrate on an analysis of issues surrounding the profitability problem in two steps. First, evidence on profitability trends for the non-farm non-financial corporate business, the non-financial corporate business and the corporate business sectors in post-war USA are summarised. A broad range of profit rate measures are covered and data from both the US Bureau of Economic Analysis (NIPA and Fixed Assets Tables) and the Federal Reserve (Flow of Funds Account) are used. Second, the underlying drivers of profitability, in terms of technology and distribution, are investigated. The profitability analysis is used to offer some hypotheses about the current structural crisis.
Article
Full-text available
The ground rent is a key variable to understand the limits of Latin American economies. In this work, after a short review of the debates about their determinations. We analyze deeper the methodological and empirical difficulties to make a proxy of their measure, with emphasis in petroleum rent. We review critically the different ways to measure capital profitability of the capital in general and in the branches where commodities are produced no produced by the man work (particularly on oil). After established the general criteria, we analyze the technical difficulties to use the existent statistics to calculate the profits and the total advanced capital (the main issues of the profit rate).
Thesis
Full-text available
The theme of this research is the economic dynamics of Brazil between 2000 and 2016, based on the rate of profit and its determinants (technology, distribution and demand), linking the profitability approach with the financialization of the Brazilian economy. The rate of profit is a central variable in the analysis of capital accumulation and in the performance of capitalist economies. Departing from a Marxist perspective, the realized profit rate impacts on companies’ expected profitability and influences the capitalists’ investment plans and the level of employment of the economy. We estimate the rate of profit on the stock of fixed capital for Brazil based on data from the National Accounts of the Brazilian Institute of Geography and Statistics (IBGE). For the capital stock data, we used the Perpetual Inventory Method (MEP) and for distribution Gollin’s (2002) approach. We use Weisskopf’s (1979) methodology to decompose the rate of profit into its technological, distributive, and demand determinants, since the decomposition allows us to understand the impact of profitability on Brazilian economic performance in the period measured by the level of activity, inflation, employment and income, public finance and the external sector. The period’s overview was of economic growth with income distribution in favor of wages between 2003 and 2010 and drop in the rate of profit from 2011 and crisis from 2014 on. We point out that the Lula government was sustained by a social pact between the banking-financial fractions of capital and the workers, under the tutelage of Lulism. The Dilma government, in facing the rentier gains, lost political support and suffered the setback of the economic policy errors adopted in an environment of reduction of the Chinese dynamism and fall of the profitability. We also estimate a Goodwin Cycle for the period that points in the direction of cooperation between capitalists and workers under the Lula Era and competition under Dilma’s government. We then proceeded in the study of Brazilian financialization showing the interest burden on income (rentier-share), discussing the negative impacts of fiscal austerity in 2015 and pointing to particular facts of Brazilian financialization such as the power of commercial banks and sector’s concentration. Finally, we discuss the investment-profit nexus and the false opposition between interest and profit from a Marxist point of view. Finally, we used Economática’s database on balance sheets for Brazilian companies to calculate the profit rate on net worth (ROE) in order to explain, at the firm level, the impacts of financialization on the dynamics of the profit rate in the period. The decomposition of the profit rate on net worth in return on assets (ROA) and leverage (AL) shows the relationship of cooperation between finance and production in the period from 2003 to 2010 and the dysfunctionality of finance for accumulation from 2011 on, when profitability fell together with the increase in leverage, showing that the companies acquired assets through financing with third-party capital. Keywords: Rate of profit; Financialization, Brazilian Economy
Chapter
The unfortunate pioneering role of Greece in the course of the current economic crisis has made the country an international point of reference and analysis. Shock economic therapies implemented after May 2010, when Greece became the recipient of a financial bailout package, had serious social consequences (Kretsos, 2012a). Financial support from the Troika1 and especially the IMF has been conditional on reductions in public deficits and public spending, thus initiating drastic labour market reform and welfare state retrenchment that is unprecedented in the post-war period (Hall, 2011; Meardi, 2012). Young workers are, among other social groups, heavily affected by the current crisis and the policies that were gradually implemented in Europe after 2008 (European Commission, 2013).
Article
This article analyzes the economic growth in Brazil in 1950–2008. It shows that a fall in both the profit rate and the output/capital ratio is behind the debt crisis and the subsequent neoliberal restructuring since the late 1980s. Therefore, there has not been any disconnection between profitability and investment, so the capacity to generate surplus underlies the particularities of the capital accumulation during both the import substitution and the neoliberal phases.
Article
Most intellectuals would be pleased to have one major debate named after them. The Marxist economic historian Robert Brenner has managed the remarkable feat of unleashing two significant intellectual controversies. The first, in the historical journal Past & Present during the late 1970s and early 1980s, was provoked by his interpretation of the transition from feudalism to capitalism in early modern Europe. More recently, however, Brenner has switched his attention from the longue durée of European history to the economic dynamics of contemporary capitalism. In a massive journal-length article published in New Left Review in 1998 he offered a comparative analysis of the three major Western economies--the USA, Japan and Germany--from 1945 onwards, tracing the development of a protracted crisis of profitability that, Brenner contended, explained the 'long downturn' experienced by global capitalism since the early 1970s.
Article
The focus of this paper is on the evolution of the major macroeconomic variables of classical political economy and the contrast with their orthodox counterparts in the quest to identify the causes of the current crisis in the Greek economy. Our analysis shows that declining profitability past a certain point leads to a stagnant mass of real net profits that discourage investment and increase unemployment. More specifically, for the period 1970–2007 for which we have detailed data, we identify the so-called silent depression of the 1970s and early 1980s, the new golden age of accumulation during which the capitalization of the production process led to a rapidly growing productivity and with stagnant or slowly rising real wages increased the rate of surplus value to new heights. As a consequence, the rate of profit from the mid-1980s onwards displayed a mildly rising trend and remained at a much lower level than that of the early 1970s. The rate of profit starts to fall after 2007, the year of the onset of the (world) economic crisis, and this continues up to 2014. Our econometric analysis based on an ARDL model further shows that the incremental rate of return, a variable derived from, and therefore strictly related to the average rate of profit, constitutes a by far more concrete measure of profitability and, in combination with the real interest rate, shapes the process of capital accumulation.
Article
This article addresses young people's declining power in the Greek labour market due to the implementation of sweeping austerity policies and the consequent expansion of youth precarious employment and unemployment since the first bailout agreement in 2010. The analysis concludes that the crisis has acted as a catalyst for worsening of the employment situation of young people. Nevertheless, the social and employment disadvantage for youth has strong historical roots and it can be only partially explained by the crisis, as long before the crisis precarious forms of employment and unemployment rates were already higher than the adult levels. Finally, the article concludes that precarious youth employment and high youth unemployment levels are two sides of the same coin of poverty and social exclusion risk.
Article
Full-text available
O proposito do artigo foi o de abordar os temas integracao mundial e globalizacao atual e em fases passadas. Esse intento foi cumprido atraves de uma interpretacao de efeitos dos padroes tecnologicos das tres revolucoes industriais, e na forma de expansao espacial do capital em escala mundial. A reflexao a luz do estudo de Giovanni Arrighi baseou-se na leitura sobre o seu modelo de “ciclos sistemicos de acumulacao” que envolve a mundializacao do capital, a recorrencia historica, e as hegemonias de Estados nacoes. Com o fim de mostrar que a configuracao da atual economia globalizada difere de forma significativa em relacao a integracao economica mundial de periodos historicos passados, sao abordados aspectos relacionados com as acumulacoes, produtiva e financeira, aos padroes de competitividade e diluicao de fronteiras regionais, a integracao mundial, e a hipotese de um 5 0 Ciclo Sistemico de Acumulacao.
Article
http://sinergiejournal.eu/index.php/sinergie/article/view/s79.2009.05
Article
This essay argues that Knafo and Teschke fundamentally misread Brenner’s original contribution to the transition debate. They equate his rejection of trans-historical or trans-modal laws of motion with the notion that social-property relations do not have strong rules of reproduction that structure the actions of agents and give rise to ‘developmental patterns’ specific to each form of social labour. Knafo and Teschke’s critique of Brenner’s analysis of capitalist expansion and crisis is also theoretically and empirically questionable.
Article
The issue of whether the US earns a persistently higher return on its foreign direct investment (relative to returns to foreign-owned direct investment in the US) has received considerable attention but little closure in the ‘global imbalances’ debate. Measuring the rate of returns to US direct investment abroad and foreign direct investment in the US we find higher returns to US foreign direct investment relative to its foreign counterparts in the US. Given the evidence indicating higher returns to US direct investment overseas, we link the irresolution in the contemporary literature regarding the existence of these returns to the unsettled debate over the origin of global imbalances. Reviewing the macro-financial literature on global imbalances, we find a failure to acknowledge that the US current account deficit is, in part, the outcome of transnational production networks in a global economy under-pinned by dollar hegemony. Given the growth in US multinational supply chains, we argue that the US trade deficit is consistent with asymmetric returns to US direct investment and that the sustainability of these return differentials rests on the stability of the status quo.
Article
Full-text available
The current paper aims to contribute to the study of the relation between the interest rate and the rate of profit by presenting an empirical analysis of the United States economy during the period of 1869-2009. The main findings rendered are: 1) the general rate of profit has set an upper limit for the real short-term and long-term interest rates; 2) the real long-term interest rate has undergone similar changes to those of the general rate of profit, whereas the real short-term interest rate has experienced movements opposite to the latter; and 3) evidence supports heterodox theories which stress that monetary policy affects the distribution of income through the modification of the rate of profit.
Article
Full-text available
Shifting the crisis in the global rentier regime. Imbalances and searching for new fields. The aim of this article is to identify basic trends of the current configuration of global capitalism. The article starts characterizing three essential developments from the late 1970s until the recent crisis. First, undertaking far-reaching restructuring and attacks on wages, capital was able to significantly increase the profit rates after they had fallen in the early 1970s. Second, based on the increasing power of finance capital a global rentier regime emerged. Third, countries in Southeast Asia and China became important areas for investment and capital accumulation. After this analysis the article shows that despite the crisis the finance-dominated configuration of capitalism persists. Based on a massive state intervention this regime entered a process of transformation. Enforcing bank bailouts and transforming private into public debts the states play a crucial role in stabilizing the power of finance capital. Moreover, the global imbalances between net exporters and importers increase again. The paper concludes arguing that the rise of profitability depends on the extent to which it is possible to massively devaluate capital and to open up new regions and fields for a profitable valorization of capital. Thus, the creation of a constellation allowing a stable growth period is unlikely.
Article
Full-text available
The monopoly capital/under-consumption model of crisis posits that under conditions of oligopoly the system's inability to absorb a rising surplus generates reduced growth rates and, in the absence of counteracting mechanisms, stagnation. This paper argues that the theory's explanation for the crisis of manufacturing profitability that erupted in 1965 is not supported by the empirical data pertaining to profit rates, capacity utilization, and state expenditure. Specifically, the paper presents an econometric ARIMAX model which incorporates government expenditure as a control variable in order to test whether state spending serves as a counteracting mechanism to raise capacity and increase the manufacturing profit rate, as predicted by the monopoly capital school. It is argued that the model does not support the contention that system-wide stagnation is related to insufficient aggregate demand. Rather, the evidence suggests that the accumulation process continues to be governed by fierce competition. The implications of this conclusion for state policy and labor organizing are also discussed.
Chapter
The current global economic crisis has led countries in Europe and the United States to adopt various austerity measures, following an initial emergency policy response of monetary and fiscal stimuli and a series of government bailouts of banks and other financial institutions (Boyer 2012; Callinicos 2012; King et al. 2012). However, this is not a general trend in the global economy, as there is great variation among countries in terms of the impact of the crisis and policy responses to it. While economic growth in Canada, for example, has been slow, many countries from the global South continue to experience higher levels of economic growth. These divergent patterns and context-bound particularities require critical reflection in regard to the intensification of a market-oriented path of development and the tensions and uncertainties associated with an increasingly precarious mode of living for many in the world. This book analyses the deep structural issues, fundamental ontological insecurities, and ecological consequences that express uneven processes in the global proliferation of a market model. The authors in this collection concretize these processes across geographically varied contextual conditions, yet do so within the general global conjuncture of the economic crisis.
Article
The exchange between Brenner and Wood on the Low Countries in the early modern period raises a number of theoretical and historical issues relating to the conditions for the emergence of capitalist social-property relations and their unique historical laws of motion. This contribution focuses on three issues raised in the Brenner-Wood exchange: the conditions under which rural house-hold producers become subject to ‘market coercion’, the potential for ecological crisis to restructure agricultural production, and the relative role of foreign trade and the transformation of domestic, rural class relations to capitalist industrialization.
Article
Full-text available
American business has recently been under fire, charged with inflated pricing and an inability to compete in the international marketplace. However, the evidence presented in this volume shows that the business community has been unfairly maligned—official measures of inflation and the standard of living have failed to account for progress in the quality of business equipment and consumer goods. Businesses have actually achieved higher productivity at lower prices, and new goods are lighter, faster, more energy efficient, and more reliable than their predecessors. Robert J. Gordon has written the first full-scale work to treat the extent of quality changes over the entire range of durable goods, from autos to aircraft, computers to compressors, from televisions to tractors. He combines and extends existing methods of measurement, drawing data from industry sources, Consumer Reports, and the venerable Sears catalog. Beyond his important finding that the American economy is more sound than officially recognized, Gordon provides a wealth of anecdotes tracing the postwar history of technological progress. Bolstering his argument that improved quality must be accurately measured, Gordon notes, for example, that today's mid-range personal computers outperform the multimillion-dollar mainframes of the 1970s. This remarkable book will be essential reading for economists and those in the business community.
Book
The first volume of this critical history covers the social, political, and theoretical forces behind the development of Marxian economics from Marx's death in 1883 until 1929, the year marking the onset of Stalin's "revolution from above," which subsequently transformed the Soviet Union into a modern superpower. During these years, Marxists in both Russia and Germany found their economic ideas inextricably linked with practical political problems, and treated theory as a guide to action. This book systematically examines the important theoretical literature of the period, including insightful works by political functionaries outside academia--journalists, party organizers, underground activists, and teachers in the labor movement--presented here as the primary forgers of Marxian economic thought.Beginning with Engels's writings, this book analyzes the work of leading Marxist economists in the Second International, then concludes with a review of the intellectual movements within the Marxian political economy during the 1920s. A second volume treating the period from 1929 to the present will follow.Originally published in 1989.The Princeton Legacy Library uses the latest print-on-demand technology to again make available previously out-of-print books from the distinguished backlist of Princeton University Press. These paperback editions preserve the original texts of these important books while presenting them in durable paperback editions. The goal of the Princeton Legacy Library is to vastly increase access to the rich scholarly heritage found in the thousands of books published by Princeton University Press since its founding in 1905.
Chapter
In the competition between economic models, the theory of perfect competition holds a dominant market share: no set of ideas is so widely and successfully used by economists as is the logic of perfectly competitive markets. Correspondingly, all other market models (collectively labelled ‘imperfectly competitive’ and including monopoly, monopolistic competition, dominant-firm price leadership, bilateral monopoly and other situations of bargaining, and all the varieties of oligopoly theory) are little more than fringe competitors.
Book
This book provides an alternate foundation for the measurement of the production of nations, and applies it to the US economy for the postwar period. The patterns which result are significantly different from those derived within conventional systems of national accounts. Conventional national accounts seriously distort basic economic aggregates because they classify military, bureacratic and financial activities as creation of new wealth. In fact, the authors argue, these aggregates should be classified as forms of social consumption which, like personal consumption, actually use up social wealth in the performance of their functions.
Article
This article reviews Robert Brenner's ‘The Economics of Global Turbulence’, New Left Review, May/June, 1998. Several decisive weaknesses of Brenner's contribution are identified. First, Brenner's theoretical treatment of capitalist competition and accumulation is in the spirit of Adam Smith and mainstream economics rather than Marx. Second, Brenner ignores the significance of credit for capitalist crisis. Third, he leaves entirely out of account the internationalisation of production and finance, phenomena which constitute the most salient feature of the contemporary global economy. Fourth, in short, Brenner's approach is not at all value-theoretic, a weakness that can also be found in some of his earlier historical work.
Article
Typescript. Thesis (Ph. D.)--New School for Social Research, 1997. Includes bibliographical references (leaves: 332-347).
Article
This paper presents labor values and prices of production calculated for the postwar U.S. economy using a seventy-one-sector input-output model with fixed capital, as well as actual wage-profit curves during the same period. It is found that the cross-sectional deviations of values and prices of production from market prices are quite small: between 12 and 14 percent on average. Over time, approximately 75 percent of the variation of market prices is accounted for by changes by both values and prices of production, and 93 percent of the variation of prices of production is accounted for by changes in labor values. Wage-profit curves exhibit near-linearity, casting some doubt on the significance of reswitching for actual economies. Copyright 1989 by Oxford University Press.
World Capitalism at the Abyss
  • A Callinicos
Callinicos, A. (1998). "World Capitalism at the Abyss." International Socialism(Winter): 3-43.
The Union for Radical Political Economics
  • R Cherry
  • C D'onofrio
  • C Kurdas
  • T R Michl
  • F Moseley
Cherry, R., C. D'Onofrio., C. Kurdas, T.R. Michl, F. Moseley, and M.I. Naples, Eds. (1987). The Imperiled Economy. New York, The Union for Radical Political Economics.
The Falling Rate of Profit and the Economic Crisis in the U.S. The Imperiled Economy
  • A R Shaikh
  • Cherry
Shaikh, A. (1987). The Falling Rate of Profit and the Economic Crisis in the U.S. The Imperiled Economy. R. Cherry, et. al., Union for Radical Political Economy. Book I.
The Falling Rate of Profit and Long Waves in Accumulation: Theory and Evidence. New Findings in Long Wave
  • A Shaikh
Shaikh, A. (1992). The Falling Rate of Profit and Long Waves in Accumulation: Theory and Evidence. New Findings in Long Wave Research. A. Kleinknecht, E. Mandel and I. Wallerstein. London, MacMillan.
New Palgrave: Marxian Economics
  • A Shaikh
Shaikh, A. (1990). Surplus Value. New Palgrave: Marxian Economics. J. Eatwell, M. Milgage, P. Newman (eds.). London, Macmillan.
Price Competition and Technical Choice
  • T Nakatani
Nakatani, T. (1979). "Price Competition and Technical Choice." Kobe University Economic Review 25: 67-77.
The Current Economic Crisis: Causes and Implications
  • A Shaikh
Shaikh, A. (1989). "The Current Economic Crisis: Causes and Implications." Against The Current: 1-26.
U.S. Capitalism in Crisis
URPE (1978). U.S. Capitalism in Crisis. New York, Union for Radical Political Economics.
Fixed Reproducible Tangible Wealth
  • U S Department
  • B E A Of Commerce
U.S. Department of Commerce, B.E.A. (1998). Fixed Reproducible Tangible Wealth, 1925-96.
Monopolistic competition and general equilibrium
  • T Negeshi
Negeshi, T. (1987). Monopolistic competition and general equilibrium. The New Palgrave: A Dictionary of Economics. J. Eatwell, M. Milgage, P. Newman (eds.). London, MacMillan.
A Comment on 'The Value Controversy
  • A Shaikh
Shaikh, A. (1992). A Comment on 'The Value Controversy Reconsidered' by Itoh. Radical Economics. B. Roberts and S. Feiner (eds). Boston, Kluwer Academic Press.