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Technology, distribution and the rate of profit in the US economy: understanding the current crisis

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  • Deepankar Basu
  • Ramaa Vasudevan

Abstract

This paper offers a synoptic account of the state of the debate among Marxist scholars regarding the current structural crisis of capitalism, identifies two broad streams within the literature dealing, in turn, with aggregate demand and profitability problems, and proceeds to concentrate on an analysis of issues surrounding the profitability problem in two steps. First, evidence on profitability trends for the non-farm non-financial corporate business, the non-financial corporate business and the corporate business sectors in post-war USA are summarised. A broad range of profit rate measures are covered and data from both the US Bureau of Economic Analysis (NIPA and Fixed Assets Tables) and the Federal Reserve (Flow of Funds Account) are used. Second, the underlying drivers of profitability, in terms of technology and distribution, are investigated. The profitability analysis is used to offer some hypotheses about the current structural crisis. Copyright , Oxford University Press.

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  • Deepankar Basu & Ramaa Vasudevan, 2013. "Technology, distribution and the rate of profit in the US economy: understanding the current crisis," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 37(1), pages 57-89.
    • Handle: RePEc:oup:cambje:v:37:y:2013:i:1:p:57-89
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    File URL: http://hdl.handle.net/10.1093/cje/bes035
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    1. Weisskopf, Thomas E, 1979. "Marxian Crisis Theory and the Rate of Profit in the Postwar U.S. Economy," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 3(4), pages 341-378, December.
    2. James Crotty, 2009. "Structural causes of the global financial crisis: a critical assessment of the 'new financial architecture'," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 33(4), pages 563-580, July.
    3. Raford Boddy & James Crotty, 1975. "Class Conflict and Macro-Policy: The Political Business Cycle," Review of Radical Political Economics, Union for Radical Political Economics, vol. 7(1), pages 1-19, April.
    4. Thomas R. Michl, 1988. "The Two-Stage Decline in U.S. Nonfinancial Corporate Profitability, 1948-1986," Review of Radical Political Economics, Union for Radical Political Economics, vol. 20(4), pages 1-22, December.
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    More about this item

    JEL classification:

    • B51 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Socialist; Marxian; Sraffian
    • E11 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Marxian; Sraffian; Kaleckian

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