[OPE-L] Falling Rate of Profit as Science Fiction?

From: Jurriaan Bendien (adsl675281@TISCALI.NL)
Date: Sun Mar 05 2006 - 08:23:27 EST

The falling rate of profit is science fiction, if there is no scientific
investigation of the theorem of the falling rate of profit.

Just quickly, I have provided a brief answer to some of your queries here:

Empirical sources for profitability data in price terms are:

-business accounts
-tax reports
- national accounts
-anecdotal information and circumstantial evidence
-indirect information (e.g. business closures and business expansion)
- independently constructed estimates

From these you can obtain a picture of the historical trend, assuming that
the methodology for obtaining data remains relatively constant over time.
The difficulty these days is, that you have corporations with a sales
turnover larger than whole countries, with a system of internal transactions
which is often international. This gives rise to very complex accounting
systems which may overstate or understate profits and capital stocks to
avoid or evade tax, with significant quantitative consequences.
Consequently, profit data in price terms are always open to interpretation,
and various different sources have to be put side by side to obtain an
indication of the real trend.

A distinction must be drawn between conjunctural fluctuations, longer term
fluctuations, and the broad long-run historical trend. The difficulty with
measuring the last-mentioned trend is that statistical classifications and
accounting methods have changed, through two centuries of industrial

A further distinction should be drawn between empirical research and
empiricism. In empirical research, there are rarely "perfect data" or
"perfect measurements". Often we can obtain only approximations. But
according to empiricism, unless we can observe and measure something with
exactitude, no knowledge or science is possible, and indeed knowledge itself
is held to be reducible to sense data. We should not, however, conflate data
with the phenomena they aim to describe, with varying degrees of exactitude.
Theory consists of systematic, coherent generalisations from experience
which are not reducible to particular experiences; at any time, knowledge
contains both theory and experience.

One of the main quantitative problems for estimating a Marxian rate of
profit concerns the conceptual interpretation of financial imposts
associated with so-called "unproductive labour", which on some definitions
comprise half, or more than half of total labour costs in advanced
capitalist societies. Some Marxists interpret them as capital costs, others
as a component of surplus-value, yet others exclude them from
consideration.(See also my article
http://en.wikipedia.org/wiki/Value_product and
http://en.wikipedia.org/wiki/Compensation_of_employees on this).

Postmodernists are people who like to show off their skill at "interpreting"
phenomena with a sophisticated array of layers of meaning, without doing any
systematic empirical research themselves; rather, they like to cream off the
scientific research of others, and refashion it into a new concoction that
they find satisfying. Sometimes this yields genuinely new insights, but
often it is merely a shallow rehash. Undoubtedly, reporting on empirical
research involves telling a story, but postmodernism usually has only the
story, not the research, it is more a sort of "art" to show off your
erudition (or ability to make semantic associations). Research to obtain an
objective view takes hard work, subjective interpretation can be quick as a
flash, and change according to what one finds meaningful at the time.

One reason why Marxism has virtually disappeared as an intellectual
discipline, is because most remaining Marxists (bar a few notable
exceptions) do no comprehensive empirical research anymore to discipline
their abstractions, for one reason or another. Consequently, there is a
bigger and bigger chasm between real capitalism and the capitalism Marxists
prattle about - any abstraction is as good as any other abstraction, because
they are not disciplined by empirical investigation, and that contributes to
postmodernist relativism and subjectivism. In the end, we are left not with
an active human subject armed with objective knowledge grounded in
experience, but with a passive postmodern interpreter of the Zeitgeist,
skeptical of his ability to know anything more, than what happens to be in
front of his nose. This is the paradox of our epoch - at the very time that
more valid data is available than ever, fewer people are actually
researching it.


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