One indication of the trend you are speaking of might be seen by looking at business receipts for manufacturing as a percentage of total receipts. In 1952 Business Receipts (Gross Sales) accounted for 97% of Total Receipts in Manufacturing. In 1994 Business Receipts accounted for 94% to Total Receipts in Manufacturing. In 2005, Business Receipts accounted for 84% to Total Receipts in Manufacturing.
Also in 1952 capital assets in manufacturing accounted 58%, in 1994 depreciable assets accounted for 42% of all assets in manufacturing and in 2005 depreciable assets accounted for 22% of total assets in manufacturing.
All of this data comes from Corporate Income Tax Returns: http://www.irs.gov/taxstats/index.html for 1994-2005. Earlier years are available only in hard copy.
Rudy
michael perelman wrote:
>
> I trust Doug on data, so if what I say is wrong, I stand ready to be
> corrected. The finance, insurance, and real estate sector accounts
> for about 40% of profits [working from memory]. When BusinessWeek
> published that estimate, I contacted the reporter, David Henry asking
> him where the finance arms of corporations like General Electric and
> General Motors were. He thought that their earnings might be counted
> as manufacturing, but was not sure.
>
> One of the main factors hidden in our discussion is the fact that much
> of manufacturing has not been renewing capital, but letting it age. As
> a result you can get increases in production at having some new
> capital, but letting existing capital get old.
>
> I'm too swamped now to fish out the data, but as I recall much of the
> investment in manufacturing is coming out of depreciation funds.
>
>
>
> SA wrote:
>> The right number for per capita total output excluding finance is an
>> increase of 90% - almost doubling - from 1980 to 2007. The
>> manufacturing number is definitely right because I took it straight
>> from the BEA's quantity index for manufacturing value added - it also
>> almost doubled. (The two aren't strictly comparable; I used an income
>> measure for total output excluding finance whereas the mfg number is
>> an output number, but obviously the right numbers wouldn't change
>> much. Also, I used the overall GDP deflator for national income minus
>> finance, whereas the right deflator would be slightly infinitesimally
>> different since we're excluding finance, but again, the discrepancy
>> obviously would be minimal. Finance hasn't changed much as a
>> percentage of GDP - from about 14% to 18%.)
>>
>> So - assuming the mfg sector and the total economy minus finance (and
>> insurance and real estate) are both good proxies for whatever one's
>> notion of the "real" or "useful" economy is, I think a doubling in 27
>> years makes it hard to argue that capitalism has been unable to
>> produce enough investment for sustained long-term growth.
>>
>> SA
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>>
>
>
-- Rudy Fichtenbaum Professor of Economics Chief Negotiator AAUP-WSU Wright State University Dayton, OH 45435-0001 937-775-3085