Profitability and Its Determinants
Operationalizing the 'Law of the Tendency of the Rate of Profit to Fall' in the US Economy, 1950-2020
Bibliographic Data
| ID | 2371025 |
|---|---|
| Authors | Joshua J Watterton (0000-0003-3851-5643, York University, corresponding author) |
| Year | 2023 |
| Volume | 49 |
| Issue | 7-8 |
| Pages | 1173-1188 |
| Publication date | 2023-11-01 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | Critical Sociology (JOURNAL) |
| Journal identifiers | ISSN: 0896-9205 • E-ISSN: 1569-1632 |
| Publisher | SAGE Publications Inc (PUBLISHER) |
| DOI | 10.1177/08969205231160744 |
| OpenAlex | W4360616035 |
| Language | EN |
| References cited | 12 |
This analysis seeks to demonstrate the theoretical and empirical salience of the 'law of the tendency of the rate of profit to fall' in relation to the concrete evolution of the US economy between 1950 and 2020. The theoretical-methodological approach adopted in this study is based on the work of Shane Mage and Murray E.G. Smith. This approach re-specifies the Marxian value categories and ratios for purposes of empirically operationalizing them as a theory of fundamental capitalist dynamics using national accounting data. Contributions include (1) the treatment of systemically necessary unproductive labour as a 'constant capital overhead cost' and (2) a method of managing 'fictitious profits' that are imputed into the national accounts and thereby enabling a more realistic estimate of 'social surplus value' (the numerator of the Marxian average rate of profit) in what has become an 'era of fictitious capital'. The empirical findings reveal a persistent rise in the organic composition of capital, as well as a rise in the rate of surplus value, accompanied by a long-term downward trend in the average rate of profit in the postwar US economy
Capitalism · Classical economics · Economics · Microeconomics · Neoclassical economics · Operationalization · Prices of production · Profit rate · Profitability index · Rate of profit · Surplus value · Economic Theory and Policy · Housing, Finance, and Neoliberalism · Law · Political Economy and Marxism
| Citation velocity | historical |
|---|---|
| Highly cited | No |