> The profit rate depends positively on the rate of exploitation and
> negatively on the stock of existing capital. So, obviously, for
> profitability to increase, the rate of exploitation must increase
> (say, under the pressure of mass unemployment) and/or capital needs to
> be destroyed.
I may be missing something obvious here, but isn't there a third factor that can make the profit rate go up - a decrease in the capital-output ratio? This wouldn't require the stock of capital to shrink, it could be achieved simply through technological improvements that increased the amount of output yielded by each additional increment of capital (holding labor input constant). In fact, the capital-output ratio declined a lot in the 90's, which is why the profit rate was able to rise without a significant change in the profit share of national income ("the rate of exploitation") or a shrinking capital stock.
SA