IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

The Profit Rate in the Presence of Financial Markets: a Necessary Correction

Listed author(s):
  • Freeman, Alan

This is a prepublication version of the article by the same name in the Journal of Australian Political Economy. It should be cited as “Freeman, A. 2012 'The Profit Rate in the Presence of Financial Markets: a Necessary Correction'. Journal of Australian Political Economy, Number 70, Summer 2012, pp 167-192” In the past two decades the number, variety, and monetary value of marketable financial instruments have grown by orders of magnitude. While traditional equities have certainly grown in number and value, the greatest growth has taken place in securities since the turn to securitized lending in the 1970s. This is probably the single most significant development in what many writers term ‘financialisation’. This article argues that these assets, when they function as money-capital, enter into the equalization of the rate of profit. They constitute part of the capital advanced by the capitalist class as a whole and should therefore be included in the denominator of the rate of profit. In the two main world financial markets at least – the UK and the US - The resulting measures of the rate of profit reveal a general, systematic and virtually uninterrupted decline in the rate of profit in these countries since the late 1960s. The paper then re-examines the definition of the rate of profit found in Marx’s writings on the subject and argues that it confirms the inclusion of financial instruments in both the concept and measure of the general rate of profit as defined by Marx.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
File Function: original version
Download Restriction: no

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 52625.

in new window

Date of creation: 01 Jul 2012
Date of revision: 01 Jul 2012
Publication status: Published in Journal of Australian Political Economy 70 (2012): pp. 167-192
Handle: RePEc:pra:mprapa:52625
Contact details of provider: Postal:
Ludwigstraße 33, D-80539 Munich, Germany

Phone: +49-(0)89-2180-2459
Fax: +49-(0)89-2180-992459
Web page:

More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

in new window

  1. Simon Mohun, 1996. "Productive and Unproductive Labor in the Labor Theory of Value," Review of Radical Political Economics, Union for Radical Political Economics, vol. 28(4), pages 30-54, December.
  2. Freeman, Alan, 2009. "How much is enough?," MPRA Paper 13262, University Library of Munich, Germany.
  3. Alan Freeman & Guglielmo Carchedi (ed.), 1996. "Marx and Non-equilibrium Economics," Books, Edward Elgar Publishing, number 737.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:52625. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Winter)

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.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 profile, as there may be some citations waiting for confirmation.

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

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.