From: ope-admin@ricardo.ecn.wfu.edu
Date: Sat Mar 18 2006 - 09:27:38 EST
---------------------------- Original Message ------------------------ Subject: Measuring the rate of profit From: "Vicenç Meléndez" <vicenmel@sarenet.es> Date: Sat, March 18, 2006 8:23 am To: glevy@pratt.edu ---------------------------------------------------------------------- Thank you for your reply Jerry, >Hello Vicenç, >>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? -- Vicenç Meléndez Barcelona (Spain)
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