The Kaleckian Profit and Profit Rate and Post-WWII U.S. Business Cycles

This article studies the Kaleckian profit and profit rate in U.S. business cycles. Kalecki emphasized the critical role played by investment in the determination of profit. The alternative mechanisms that he operationalized in his discussion of profit generation usually played an insignificant role then. However, since Kalecki developed his framework for profit and its determinants, the U.S. economy has gone through some significant transformations, specifically with the neoliberal turn beginning in the early 1980s. We consider some of these changes under the new corporate governance system and shareholder-value ideology, and discuss the role they play in relation to Kaleckian profit generation. We also discuss the components of the profit, as distinct from its determinants, to discuss how the allocation of the profit within the capitalist class influences Kaleckian profit generation. Finally, we compute the determinants and the components of the Kaleckian profit rate in the post-WWII U.S. business cycles to empirically observe the influence of the neoliberal turn on the Kaleckian profit generation.