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Profitability and Crisis in the South African Economy

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  • Malikane, Christopher

Abstract

Based on new quarterly estimates of the general rate of profit over 1960-2016, this paper shows that the South African economy experienced two phase changes in the pace and rhythm of capital accumulation. The rate of profit exhibits a cyclical tendency to fall, mainly driven by the tendency of capital intensity to rise. The economy experienced a crisis of absolute overproduction of capital in the mid-1980s. This crisis was not only characterised by stagnation in the mass of profits, it was also characterised by a halt in capital accumulation. Thereafter, the rate of profit recovered primarily because of the fall in the capital-output ratio but it failed to reach the levels seen in the 1970's. We estimate that in 2012, the South African economy entered a new and on-going crisis of overproduction of capital characterised by stagnant profits and prolonged overaccumulation, which makes it impossible for economic growth to recover.

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  • Malikane, Christopher, 2017. "Profitability and Crisis in the South African Economy," MPRA Paper 76165, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:76165
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    References listed on IDEAS

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    6. Thanasis Maniatis & Costas Passas, 2013. "Profitability Capital Accumulation and Crisis in the Greek Economy 1958--2009: a Marxist Analysis," Review of Political Economy, Taylor & Francis Journals, vol. 25(4), pages 624-649, October.
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    Cited by:

    1. Lefteris Tsoulfidis & Dimitris Paitaridis, 2019. "Capital intensity, unproductive activities and the Great Recession in the US economy," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 43(3), pages 623-647.

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    More about this item

    Keywords

    falling rate of profit; capital intensity; overproduction of capital; overaccumulation;
    All these keywords.

    JEL classification:

    • B5 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches
    • E11 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Marxian; Sraffian; Kaleckian
    • O5 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies

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