Workers-Control-Over-Prod
4th October 2012, 03:51
Many people have correctly claimed that it is dishonest to talk about the Rate of Profit being cause to Capitalism's current crisis. As Andrew Kliman demonstrates in his book "The Failure of Capitalist Production", the Rate of Profit has pressed certain very unhealthy and risky tendencies in the US economy. In the most luscious chapter 7 he states that,
changes in the distribution of corporations’ output between labor and non-labor income were minor
http://www.marxisthumanistinitiative.org/wp-content/uploads/2011/11/Fig.-5.8.jpg
and argues that that the rate of profit fell mainly because employment increased too slowly in relationship to the accumulation of capital. He goes into detail that the information-technology revolution has caused such depreciation [the replacement cycle of old Constant capital {machines} with new Capital] to increase substantially and that this has significantly affected the measured rate of profit.
Notice, his use of such generalized terms: "information-technology revolution", "Rate of Profit, US Corporations" and also notice the general term "Rate of Profit (property income rate)" on his graph. Although the title of his book is "the failure of Capitalist Production", he associates the "information-technology revolution", making one assume that he is talking about the rate of profit of the production process, while obviously the Rates of profit he gives (20%, 30% etc.) are of "US Corporations" and not specifically the production sector!
Had Kliman not pertained his general analysis of the Rate of Profit, but kept to a correct analysis of economic sectors according to organic composition, he would have found that the Rate of Profit for Industry is a lot lower than for shopping stores and the economy at large.
The growth rates of the Industrial sector, which holds a lot higher proportion of machines in its production process than the service sector, are going to be lower because the amount of Surplus being produced/live labor is lower.
http://www.revleft.com/vb/attachment.php?attachmentid=8745&d=1337913928
Compare with the economy at large:
http://www.econ.tcu.edu/harvey/blog/GDP_growth.jpg
Today, 95% of Corporate profits are made from the financial sector and not in the production sector. A Materialist perspective is crucial to Marxian economics; the FED, ECB and all other Central Banks only have such low interest rates because Capital is not investing into the real economy (Which admittedly is a different thing as consumer demand plays a rather large role in GDP change; but the whole economy is based around the production of material goods), to try to spur production (to spur the whole economy's growth) the Capitalist States have lowered Corporate taxes to historical lows, have insured mortgages which created bubbles, have increased subsidies, have ignored tax loopholes, have initiated a ten year war armaments program, destroyed and rebuilt etc. etc.
Record profits exist, unbelievable amounts of money have been funneled into the pockets of the Capitalists. But still, after all these measures, real economic growth is low, the financial industry booms, yet Industrial production growth continues to decline and is shrinking in most advanced capitalist countries. You have to see that the production of material goods is central to the whole economy. Material goods are used in all workplaces, shipping companies ship goods around the world, housing industry relies on the production of material goods, insurance companies want to insure the average 30% of labor force which are industrial proletarians that get a wage for them to live off, banks need companies with growth etc.
http://i51.tinypic.com/2yuhmkl.jpg
The Rate of Profit of the Production process is certainly also not linear. It is affected by varying market factors as well. But since 2002 the Rate of Profit of the production process has been below the financial interest rate of 2%, and ever since then we have seen a massively State subsidized Capitalism. In the crisis of 2009, investments into the German (and a lot of the other advanced capitalist economies) Industry sector fell faster than real consumer demand (than wages were cut). This is a sign that the Rate of Profit of the production process is now around 0%. The profitability of production will not increase given that we do not find a human colony on Mars; the advanced organic composition of Capital (the amount of machines that have replaced live labor) deems it simply unprofitable for Capital to invest into the production process. Exitus
8902
8903
changes in the distribution of corporations’ output between labor and non-labor income were minor
http://www.marxisthumanistinitiative.org/wp-content/uploads/2011/11/Fig.-5.8.jpg
and argues that that the rate of profit fell mainly because employment increased too slowly in relationship to the accumulation of capital. He goes into detail that the information-technology revolution has caused such depreciation [the replacement cycle of old Constant capital {machines} with new Capital] to increase substantially and that this has significantly affected the measured rate of profit.
Notice, his use of such generalized terms: "information-technology revolution", "Rate of Profit, US Corporations" and also notice the general term "Rate of Profit (property income rate)" on his graph. Although the title of his book is "the failure of Capitalist Production", he associates the "information-technology revolution", making one assume that he is talking about the rate of profit of the production process, while obviously the Rates of profit he gives (20%, 30% etc.) are of "US Corporations" and not specifically the production sector!
Had Kliman not pertained his general analysis of the Rate of Profit, but kept to a correct analysis of economic sectors according to organic composition, he would have found that the Rate of Profit for Industry is a lot lower than for shopping stores and the economy at large.
The growth rates of the Industrial sector, which holds a lot higher proportion of machines in its production process than the service sector, are going to be lower because the amount of Surplus being produced/live labor is lower.
http://www.revleft.com/vb/attachment.php?attachmentid=8745&d=1337913928
Compare with the economy at large:
http://www.econ.tcu.edu/harvey/blog/GDP_growth.jpg
Today, 95% of Corporate profits are made from the financial sector and not in the production sector. A Materialist perspective is crucial to Marxian economics; the FED, ECB and all other Central Banks only have such low interest rates because Capital is not investing into the real economy (Which admittedly is a different thing as consumer demand plays a rather large role in GDP change; but the whole economy is based around the production of material goods), to try to spur production (to spur the whole economy's growth) the Capitalist States have lowered Corporate taxes to historical lows, have insured mortgages which created bubbles, have increased subsidies, have ignored tax loopholes, have initiated a ten year war armaments program, destroyed and rebuilt etc. etc.
Record profits exist, unbelievable amounts of money have been funneled into the pockets of the Capitalists. But still, after all these measures, real economic growth is low, the financial industry booms, yet Industrial production growth continues to decline and is shrinking in most advanced capitalist countries. You have to see that the production of material goods is central to the whole economy. Material goods are used in all workplaces, shipping companies ship goods around the world, housing industry relies on the production of material goods, insurance companies want to insure the average 30% of labor force which are industrial proletarians that get a wage for them to live off, banks need companies with growth etc.
http://i51.tinypic.com/2yuhmkl.jpg
The Rate of Profit of the Production process is certainly also not linear. It is affected by varying market factors as well. But since 2002 the Rate of Profit of the production process has been below the financial interest rate of 2%, and ever since then we have seen a massively State subsidized Capitalism. In the crisis of 2009, investments into the German (and a lot of the other advanced capitalist economies) Industry sector fell faster than real consumer demand (than wages were cut). This is a sign that the Rate of Profit of the production process is now around 0%. The profitability of production will not increase given that we do not find a human colony on Mars; the advanced organic composition of Capital (the amount of machines that have replaced live labor) deems it simply unprofitable for Capital to invest into the production process. Exitus
8902
8903