[lbo-talk] FROP flop

[Michael Dawson -PSU]

Fact: Corporate Profit + Interest Income + Depreciation Allowances:  This
sum has remained a steady percentage of U.S. GDP since 1929 (14 to 17%),
with the exception of the Great Depression, when it dipped to about 8%.
This sum is spendable surplus wealth mostly under the command of the richest
1% of the population.  It has _not fallen_ in relationship to anything
underlying it, including the huge explosion of management and marketing
expenditures.  It also does not encapsulate the huge rise in corporate
officer compensation and capital gains wealth.

Why in the world do people insist on flogging Marx's FROP stuff?  It's
counterfactual, and it wasn't even in a book he finished!  Wake up and smell
the money!

----- Original Message ----- 
From: <uvj at vsnl.com>
To: "lbo" <lbo-talk at lbo-talk.org>
Sent: Wednesday, March 03, 2004 8:23 AM
Subject: Re: [lbo-talk] RE: DeLong flap


> Curtiss Leung wrote:
>
> > Q: Isn't the absence of good avenues for investiment for an increasing
> > surplus
> > part of a liquidity trap?  Capital sitting around in money form and no
> > place
> > worth putting it?  Or do I misunderstand what a liquidity trap is?
>
> Capitalists' liquidity preference can surely be overcome if the expected
> rates of profit are adequate. Overaccumulation has been described as,"a
state in which there is a significant mass of excess capital in the economy,
which cannot be invested at the average rate of profit normally by owners of
capital." (Glossary in Mandel's Late Capitalism) The question then is why
there is periodic decline in overall profitability on the total capital
employed in the system.
>
> Ulhas
>
>
>
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