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Reisman's Net Consumption, Net Investment Theory of Aggregate Profit

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  • JERRY KIRKPATRICK

Abstract

. This paper presents the essentials of George Reisman's net consumption, net investment theory of aggregate profit as discussed in Capitalism: A Treatise on Economics. The paper then relates Reisman's ideas to those of Austrian School economists Ludwig von Mises and Murray Rothbard. Delimiting time preference to determining the rate of net consumption, the primary determinant of aggregate profit, Reisman argues that under an invariable money, a one‐time increase in the rate of saving is sufficient to stimulate an increase in the supply of capital goods indefinitely. Reisman thereby rejects the claim that capital accumulation causes a falling rate of profit.

Suggested Citation

  • Jerry Kirkpatrick, 2004. "Reisman's Net Consumption, Net Investment Theory of Aggregate Profit," American Journal of Economics and Sociology, Wiley Blackwell, vol. 63(3), pages 627-646, July.
  • Handle: RePEc:bla:ajecsc:v:63:y:2004:i:3:p:627-646
    DOI: 10.1111/j.1536-7150.2004.00307.x
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    1. Mill, John Stuart, 1848. "Principles of Political Economy (V): On the Influence of Government," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, volume 5, number mill1848-5.
    2. Mill, John Stuart, 1848. "Principles of Political Economy (II): Distribution," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, volume 2, number mill1848-2.
    3. Ricardo, David, 1821. "On the Principles of Political Economy and Taxation," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, edition 3, number ricardo1821.
    4. Smith, Adam, 1776. "An Inquiry into the Nature and Causes of the Wealth of Nations," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number smith1776.
    5. Mill, John Stuart, 1848. "Principles of Political Economy (III): Exchange," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, volume 3, number mill1848-3.
    6. Mill, John Stuart, 1848. "Principles of Political Economy (I): Production," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, volume 1, number mill1848-1.
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