IDEAS home Printed from https://ideas.repec.org/a/sae/reorpe/v18y1986i1-2p56-86.html
   My bibliography  Save this article

The Rate of Profit and the Organic Composition of Capital in West German Industry from 1960 to 1981

Author

Listed:
  • Angelo Reati

    (Commission of the European Communities, rue de la Loi, 200, 1049 Bruxelles, Belgium.)

Abstract

The purpose of this article is to ascertain empirically whether the "law" of the tendential fall of the rate of profit, considered as an element of long wave theory, can explain the present economic stagnation in German industry. The results are negative for the explanatory power of the "law": the rate of profit is declining in the long run, but the organic composition, instead of increasing, decreases or remains stationary - the opposite of the predicted change. This evolution of the organic composition of capital is essentially due to: 1) the net effects of technical change (i.e. the technical composition of capital and its results in terms of productivity); 2) the income distribution changes. In fact, generally productivity grew more than technical composition, so exerting a downward pressure on the organic composition (and a positive effect on the rate of profit). The noticeable increase in the wage share had a double effect; it amplified the downward pressure on organic composition and contributed to the decline in profitability.

Suggested Citation

  • Angelo Reati, 1986. "The Rate of Profit and the Organic Composition of Capital in West German Industry from 1960 to 1981," Review of Radical Political Economics, Union for Radical Political Economics, vol. 18(1-2), pages 56-86, March.
    • Handle: RePEc:sae:reorpe:v:18:y:1986:i:1-2:p:56-86
    as

    Download full text from publisher

    File URL: http://rrp.sagepub.com/content/18/1-2/56.abstract
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ivan D. Trofimov, 2017. "Profit rates in the developed capitalist economies: a time series investigation," PSL Quarterly Review, Economia civile, vol. 70(281), pages 85-128.
    2. Trofimov, Ivan D., 2017. "Profit rates in the developed capitalist economies: a time series investigation," MPRA Paper 79529, University Library of Munich, Germany.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:reorpe:v:18:y:1986:i:1-2:p:56-86. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: http://www.urpe.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.