Choonara, McNally and the US rate of profit | Michael Roberts
As readers of my blog will know, ad nauseum…
Oh go on then, say it again, once more with feeling….
I think there has been a secular downtrend visible in the US rate of profit, but there is also a profit cycle in the US capitalist economy that lasts from trough to trough about 32-36 years. I reckon that the last peak year of 1997 set the marker for the end of the ‘neoliberal’ up phase from 1982. The down phase then began to exert pressure on the US capitalist economy. It forced an even bigger switch from productive investment in manufacturing, transport and communications into financial and property sectors to maintain profits through the expansion of what Marx called fictitious capital, or credit. That laid the basis for the crisis in 2007 and the ensuing major slump. In that sense, Marx’s law of profitability did operate to cause the crisis. The great up phase in profitability after 1982 had finished in 1997, some ten years before the Great Recession. We are still in the down phase, which will last for at least another three to seven years, on my reckoning, in what is really a long depression like the 1880-90s in the US and the UK.
But remember the data for these arguments are for the US only.
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