File spoon-archives/marxism-international.archive/marxism-international_1996/96-12-23.052, message 30


Date: Fri, 20 Dec 1996 12:17:13 -0500 (EST)
From: Siddharth Chatterjee <siddhart-AT-mailbox.syr.edu>
Subject: RE: M-I: Rate of Profit




On Thu, 19 Dec 1996, boddhisatva wrote:

> 
> 	I think it may have something to do with the fact that capitalists
> are cowards.  They demand not only profit, but low risk and liquidity. 
> Capital investments require time to pay off and that period of time between
> investment and pay-off creates more risk for any individual investment,
> (although the average return on capital investment may be higher).  It also
> offers far less liquidity.
> 
> 
> 	I have always thought that Marx's insight into the falling rate of
> profit was hampered by his not having seen the flower of stock investing, and
> the modern stock market.  The Barons of early capitalism have been replaced
> by fund managers who are essentially no more than book-makers.  Isn't the
> movement of the capitalist from industry to stock market part of the
> dialectical process of alienation?
> 

One has to be careful here. Profits of the capitalist class as a whole
are generated by production (i.e. due to the expenditure of human labor
power) and not in the realm of circulation. The stock market primarily
belongs in the later category where past profits created by production
are shared among numerous investors in the form of dividends, shares,
and transfer of surplus value from one hand to another due to fluctuation
of stock prices. It is the place where the loot is shared out so to
speak. If this point is not kept in mind, then we will have
bourgeois economics in which miraculous quantities like interest,
dividends, etc. appear apparently due to the "earning" power of money.
So it does not matter whether Marx would have seen the stock market or
not. The tendency of the rate of profit to fall is only a tendency and
there are countervailing forces which seek to offset this tendency. 
 



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