[lbo-talk] Re: wotsit madder

Michael Dawson -PSU mdawson at pdx.edu
Fri Mar 5 15:12:27 PST 2004


The thinking behind
> the falling rate of profit theory is premised on the more rational
> assumption that market demand is finite.
>
> Once we accept the inevitability that no market is infinite, then the
> falling rate of profit follows as surely as night follows day. Its
> simple market forces, if supply exceeds demand, then prices fall, if
> prices fall then profits are squeezed.
>
> Quite simply, profitability is dependent on demand exceeding supply.
> Under conditions of scarcity, capitalism works extremely well.
> Capitalism won't work under conditions where scarcity ceases to
> exist, because saturated markets are not profitable markets.

I'm being fanciful? You've packed about six howlers into this little stretch of words. Where does "Marxist" FROP theory say anything about demand? It's a 100-percent supply-side argument. It says nothing whatsoever about demand. It says profits fall because the cost of factories and machines (the organic composition of capital) rises too fast.

Meanwhile, have prices been falling? Has demand been exceeding supply? Has anybody been making profits? Are the rich getting richer? You can't make profits in saturated markets?

Apparently, we're not reading the same newspapers...



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