From: Jerry Levy (Gerald_A_Levy@MSN.COM)
Date: Sun Mar 05 2006 - 09:52:40 EST
> Just quickly, I have provided a brief answer to some of your queries here:
> http://en.wikipedia.org/wiki/Tendency_of_the_rate_of_profit_to_fall
Hi Jurriaan,
Your wikipedia entry in the section on "Empirical Evidence" recognizes
some of the questions I raised. E.g. in that section you wrote:
"correlation does not imply causation. Just because a fall in
profitability is observed, this does not prove any imply any
particular *causal* theory about *why* it has fallen ...."
Indeed.
When you state that:
"Most economic historians agree that, at the beginning of
the great economic depressions or recessions in the history
of capitalism (measured by a drop in output), there typically
has been a downslide in the observed average returns on
capital invested in industries, reducing the incentive to
invest, and consequently raising unemployment."
aren't you stating the obvious? (this is not a criticism: in certain
contexts, it's important to state the obvious.) So profitability typically
declines at the beginning of a depression, what does that tell us?
Isn't it a claim which advocates of just about every economic
theory could agree with?
When you go on to write:
"At best Marxian economics has convincingly argued that
profitability is the synthetic, overall indicator of the
'economic health' of the capitalist system ...."
you are stating a conclusion that just about all of the *critics* of the
TRPF would *agree* with: to claim that profitability is an important
indicator of 'economic health' of capitalism is a profoundly
uncontroversial claim.
Then you add (as the end to the previous sentence) that "economic
crises are *system-immanent*, i.e. capitalism is inherently crisis-
prone, because of its institutional structure and the way it functions."
What does it mean, though, to say that capitalism is "crisis-prone"?
One could examine the same historical data on cycles and just as
easily write that it is "growth-prone"! Isn't saying that capitalism
historically is crisis-prone simply recognizing that capital accumulation
proceeds in a *cyclical* way and that in some time periods the rate
of profit grows and in other periods it declines? From that perspective,
isn't it a *tautology*?
The issues I raised (in my previous post and above) were not postmodern
Marxist inspired, btw.
I'll send another post shortly following-up on the issue of "capitalism
in crisis."
In solidarity, Jerry
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