File spoon-archives/marxism-international.archive/marxism-international_1996/96-11-17.131, message 48


Date: Fri, 15 Nov 1996 09:02:46 GMT
From: Chris Burford <cburford-AT-gn.apc.org>
Subject: M-I: SC on Rate of Profit


Siddharth on Rate of Profit:
---------

However, the capitalist and Marxian definitions of the rate of profit
are different since the capitalist divides the profit by the *total*
capital investment not by the capital investment consumed during a year
(one measure of which is depreciation and the annual costs of raw
materials, utilities, etc.). So when we talk about the "falling
rate of profit", which definition is implied? Also, how are the two
definitions related?

Chris B:
-------


Siddharth's points here highlight the fact that any serious
discussion of an economy, marxist or captialist, really must see 
it as a perpetuating system, month by month, year by year, which
renews itself. It is a living system. 

In capitalist accounting, depreciation is one way of allowing for
the fact that past effort must be over time renewed. But as S points
out, the assumption in bourgeois concepts of the ownership of 
property, the capitalist is assumed to have a right in perpetuity.

Marxists refer to this in another way as the tyranny of dead labour
over living labour - pernicicious both for the exploitation this 
involves and for the disempowerment of current labour to decide
democratically what it really wants to do.

The bourgeois property conventions that underly capital have the 
consequence that capital continually enlarges itself, in an 
economy with a finite labour supply, so that the rate of profit
must have a tendency to fall. This is only relieved by the 
periodic discounting of capital, sometimes by inflation, at other
times, through bankruptcy or mass crises in which large amounts
of capital are destroyed. 




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