>This creates a downward pressure on profits since the base for
>creating surplus value, productive labor, is reduced and the value
>on which a return must be earned, constant capital (plant and
>equipment), expands. But this tendency for profit rates to fall can
>be counteracted by the fact that surplus value can indeed rise
>dramatically for several reasons (not all discussed by Marx or even
>existing at the time he wrote) including some (technological)
>production changes, Baran and Sweezy's "epoch making innovations"
>(automobile, etc.) which foster new industries, products, etc.
>Second, due to efficiencies in capital goods industries, the value
>(cost) of that plant and equipment doesn't rise nearly as fast as
>its mass, so that counteracts some of the pressure for profit rates
>to fall. He mentions four other counteracting causes too, as you
>know.
Yup. I'm curious why so much more attention has been paid to the tendency than the countervailing tendencies. Capitalism has succeeded rather well in keeping the profit rate safely north of zero for centuries now. So what is the analytical usefulness of the FROP concept, beyond the obvious assertion that life is difficult even for capitalists. Why do we even have an acronym for it?
>So let go of that crude empiricism that has you in its grip, the
>force that has convinced you that the FROP is some statement about
>the trajectory of profit rates that you can test to see if it is
>"correct".
Yes, that crude empiricism again. David Laibman told me, after hearing my criticisms of efficient market theory, that you can't refute a theory with empirical observations, only with another theory. I think that's silly, but I guess I'm just a crude empiricist.
Doug