Our discussions on profit are taking a fruitful turn. Let us keep
a few simple points in mind. We keep talking about profit rates, but
individual capitalists do not see a profit rate as such. They see an array
of expected profit rates. These expectations are conditioned by the
experience of others firms.
Even after they are in business for a while, they do not have a precise
estimate of their profits. Their accountant's books are backward
looking; while the relevant profits are their future returns.
After a period of disappointment, they may have to revalue their
capital. Even here, their actions are inexact.
I tend to extend Marx's use of the term to include the overvaluation of
capital needing to be written down as part of ficititious capital.
Chai-on's point is correct. We do not have a real theory about the
relationship between the general rate of profit and the profit of individual
capitals. It would make an interesting, and even valuable, study.
--
Michael Perelman
Economics Department
California State University
Chico, CA 95929
Tel. 916-898-5321
E-Mail michael@ecst.csuchico.edu