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

From: glevy@PRATT.EDU
Date: Sun Oct 07 2007 - 08:31:24 EDT

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> The annual rate of profit has been the standard reference rate of
> profit for capitalist enterprises for as long as capitalism has
> existed, including before state requirements.  The annual rate of
> profit is the rate of profit that capitalists use to compare rates of
> profit across industries in their investment allocation decisions, and
> thus is the rate of profit that is equalized across industries by
> competition and the transfer of capitals.  So the annual rate of profit
> is the rate of profit that theory should explain.

Hi Fred:

I think this elevates a matter of contingency to that of basic theory.
There is no theoretical or necessary reason why the rate of profit
should be calculated on an annuual basis.

In solidarity, Jerry

PS: corporate calculations concerning the depreciation of plant and
equipment and the "pay-back period" are very frequently calculated on the
basis of months, not years.

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