On Mon, 29 Oct 2001, Patrick L. Mason wrote: > Fred wrote: > But the rate of profit for the economy as a whole recovered less than half > of its prior decline. Does this not suggest that the profitability > problems were not entirely solved? > > Fred, what time periods are you comparing? In particular, do you have data > on profitability for the following three periods: 1945 - 1950, 1965 - 1973, > and 1993 - 1999? I have published estimates of the rate of profit from 1947 to 1994 (RRPE 1997, "The Rate of Profit and the Future of Capitalism"). These estimates show that the rate of profit declined about 50% from the late 1940s to the early 1970s, and then recovered about one-third of that decline through 1994, so that the rate of profit in the early 90s remained about 30% below its early postwar peak. I have not updated my estimates of the rate of profit for the economy as a whole since 1994, but my guess, based on the gross rate of profit (profit + interest) for the non-financial corporate business sector, is that the rate of profit increased from 1994 to 1997, but this increase has been wiped out by a decline since 1997, so that the rate of profit today is about what it was in 1990-92, i.e. 30% below its early postwar peak - and still falling. > > Also, the international situation was very much different during 1945 - > 1973 than it is today. Germany, Japan, China, and the USSR - along with the > US - all enjoyed substantial growth during this period. Today, Japan has > been in the tank for over a decade. The USSR has fallen apart and the > economies of many of its former members are basket cases. Germany also is > having problems. Basically, the US has the strongest economy, at least > among the largest economies in the world. The US economy may have the strongest economy, but what is striking about the current situation is that all three major economies are either in recession (the US and Japan) or are headed for one (Europe), with devastating effects of the rest of the world economy. It now appears likely that the year 2002 will see the first synchronized global recession since the 1930s. This in turn will have negative effects on the US economy. Comradely, Fred
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