Profit Without Accumulation

The first depression of the twenty-first century appears to contain some unusual properties in the United States. In the midst of an economy in its fourth year of oscillating between stagnation and recession, the companies in the Standard & Poor's 500 stock index were expected to report record profits in 2011, and corporate profit as a share of the economy is at a fifty-year high. Productivity growth in the past decade, at more than 2.5 percent, is higher than in the 1970s, 1980s, and 1990s. And yet there is little appetite or competitive drive to invest. Two questions come to mind: Why are profits high, and why not invest them? High rates of exploitation, low taxes, and speculation generate high profits in production, and rents captured from debt-laden households and commodity prices explain the high profitability. The divorce of the capitalist class from its domestic economy, the debts of which are so high as to make investments too uncertain, explains the low investment rate. The paper examines the theoretical implications of these developments, with particular attention to their implications for theorizing the capitalist drive to accumulate.