> Wouldn't this analysis suggest that the profit rate -
> an indicator fetishized by Marxists - is a pretty
> irrelevant indicator of the health of capitalism?
I'm not sure I understand why the profit rate would be irrelevant. It seems to me that it's exactly the opposite. The profit rate is the rate at which capital expands itself. If a capitalist is (or we are) trying to determine how effective an individual particle of capital is, we need to look at its profit rate. If we are trying to determine how effective it may be in the future, we try to estimate its future profitability. Etc. That's why the entire disciplines of accounting and corporate finance exist.
My point is *not* that individual profit rates don't matter. They do, particularly to the individual capitalists involved. What I'm saying is that, if we want the bigger picture (if you wish, the viewpoint of a sensible economist, rather than the viewpoint of an accountant), we should also look at how the entire stock of capital in the economy is expanding or contracting. Not just a biased sample of capitals, but capital in the aggregate. Or, to put it another but equivalent way, we should look at how effective an *average* particle of capital is in the economy -- the central tendency of a random sample, rather than the central tendency of a biased sample.
If we don't, we get a biased or -- as Marx would put it -- superficial appreciation of the phenomena involved. We'd see things as they appear to a group of individual capitalists, rather than the way they appear to capital in general, let alone the way they appear to us, the victims of capital. So I think Marxists are exactly right in regarding the profit rate as the stethoscope or manometer or whatever that gauges the pulse of capital, individual and overall.
Or, again, maybe I just don't understand Seth's point.