Cyclical Over-Investment and Crisis in a Labor-Scarce Economy
AbstractThis paper incorporates a post-Marxian view of investment in an overinvestment theory of cyclical economic crises. The Marxian crisis theory based on the tendency for the profit rate to fall (because of overmechanization) is replaced with a theory of overaccumulation of fixed capital, while the high employment profit squeeze is restated in terms of this overinvestment. Historical conditions determine overinvestment's results: when labor power is potentially scarce (precapitalist or agricultural labor reserves are largely gone), overinvestment means rising costs, falling profit rates, and crisis. Also, the resulting slump can cause either a recovery or lasting stagnation. Finally, post-1949 U.S. data are presented to argue the theory's plausibility.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Eastern Economic Association in its journal Eastern Economic Journal.
Volume (Year): 13 (1987)
Issue (Month): 3 (Jul-Sep)
Contact details of provider:
Postal: c/o Dr. Alexandre Olbrecht, The Anisfield School of Business 205, Ramapo College, 505 Ramapo Valley Road, Ramapo, New Jersey 07430, USA
Phone: (201) 684-7346
Web page: http://www.ramapo.edu/eea/journal.html
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Kahn, Lawrence M, 1980. "Bargaining Power, Search Theory and the Phillips Curve," Cambridge Journal of Economics, Oxford University Press, vol. 4(3), pages 233-44, September.
- Abel, Andrew B, 1981. "A Dynamic Model of Investment and Capacity Utilization," The Quarterly Journal of Economics, MIT Press, vol. 96(3), pages 379-403, August.
- Hahnel, Robin & Sherman, Howard, 1982. "The Rate of Profit over the Business Cycle," Cambridge Journal of Economics, Oxford University Press, vol. 6(2), pages 185-94, June.
- Roemer, John E, 1978. "The Effect of Technological Change on the Real Wage and Marx's Falling Rate of Profit," Australian Economic Papers, Wiley Blackwell, vol. 17(30), pages 152-66, June.
- Ashenfelter, Orley & Johnson, George E, 1969. "Bargaining Theory, Trade Unions, and Industrial Strike Activity," American Economic Review, American Economic Association, vol. 59(1), pages 35-49, March.
- Shaikh, Anwar, 1978. "Political Economy and Capitalism: Notes on Dobb's Theory of Crisis," Cambridge Journal of Economics, Oxford University Press, vol. 2(2), pages 233-51, June.
- Albert M. Wojnilower, 1980. "The Central Role of Credit Crunches in Recent Financial History," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 11(2), pages 277-340.
- Rudy Fichtenbaum, 1988. "'Business Cycles,' Turnover and the Rate of Profit: An Empirical Test of Marxian Crisis Theory," Eastern Economic Journal, Eastern Economic Association, vol. 14(3), pages 221-228, Jul-Sep.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Victor Matheson, College of the Holy Cross).
If references are entirely missing, you can add them using this form.