Re: [OPE] webpage computing dynamic rate of profit

Gerald Levy wrote:
>
> The total labor costs (wages plus benefit costs) for capitalists is
> relatively
> small compared to K? While it tends to be the case that non-labor costs
> for firms tend to exceed labor costs, this doesn't imply that the former
> are "relatively small". Since there are significant variations in V
> internationally, it would have been interesting to see how incorporating
> V into the formula would have changed the comparative results. (NB:
> then, of course, there's the question of productive vs. unproductive
> labor since only wages paid out to the former group constitute V).
>

Yes, perhaps one could look into that too. However, I have some issues
with the dimensions here. Profits are measured per annum, i.e. a flow
variable, and K is an integral over net investments, i.e. a stock
variable. The problem would be to measure the integral of net wage costs
in an analogous way. Over a year one would expect that this integral is
quite small as firms cannot pay their wage bills by loans for long.

>> But the main motivation for me was to be consistent with the bulk of
>> the literature on the profit rate.
>
> Really?

Well, at least the literature from which I learned economics this is the
predominant way to measure profitability: Brenner, Glyn, Shaikh, Tonak,
Dumenil, Levy, Foley, Michl, Cockshott, Cottrell, Farjoun, Machover. I
suppose I could expand this list.

//Dave Z
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Received on Sat May 16 08:19:07 2009