Re: [OPE-L] Measuring the rate of profit

Date: Sat Mar 18 2006 - 09:27:38 EST

---------------------------- Original Message ------------------------
Subject: Measuring the rate of profit
From:    "Vicenš MelÚndez" <>
Date:    Sat, March 18, 2006 8:23 am

Thank you for your reply Jerry,

>Hello Vicenš,

>>Lack of instruments of measure of the rate of profit

>>  The question then would be: are we producing more goods and
>> are we able to produce more services with the existing money
>> capital or do we just have more money capital?

>That is why you have to look at statistics for real GDP rather than
>just nominal GDP, right?

Then you think that deflacting GDP you have a proper knowledge
of the real output and that it is comparable with previous periods.
An example to the contrary, the sports shoes manufactured in Asia
may have 10% of third world labour costs devoted
to production and 90% of first world well paid "services" value added. The
corresponding multinational company has lowered the wage by delocalizing
the production, and also is able to negotiate and obtain lower prices
from other, small, companies, thus getting more profits for the same
product: a pair of sports shoes. There has no been price changes or they
have not fully compensated the cost decrease.

Anothe example, when introducing technical changes, only one part goes to
lowering price the other goes to increasing profits (or wages): The
conclusion,  a product with more profit per unit of real costs, whatever
system you use to measure it. Irrespective of competition forces.

Profits in relation to the output real measure (the work embodied) seem to
have increased,  accumulating - apparent - wealth. Increasing the
impression of rate of profit increase.

Am I right?

Vicenš MelÚndez

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