[lbo-talk] Austerity In The Face Of Weakness

SA s11131978 at gmail.com
Tue Aug 31 09:46:28 PDT 2010


On 8/31/2010 12:24 PM, Julio Huato wrote:


> If you survey the S&P500, you'll get the picture that businesses are
> sitting on a pile of cash and that their returns are healthy. But
> that financial health is in a sense illusory, because it's at the
> individual level. An individual business can be financially healthy
> for a little while because it can suck the blood off its dying
> competitors and workers. But that financial health is not lasting.
>
> To put it in more Marxist terms, the crisis bankrupted a large number
> of businesses, melted away the value of the entire capital stock,
> reduced the wage share. So, no wonder the profit rate of the
> individual businesses that survived appears robust. For how long
> depends on whether the whole economy recovers.

Wouldn't this analysis suggest that the profit rate - an indicator fetishized by Marxists - is pretty irrelevant as an indicator of the health of capitalism?

SA



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