> Chris Harman, 2010 - http://www.isj.org.uk/?id=613 :
> "aggregating the different investments made at different times in a
> particular period is a necessarily complicated procedure, and most attempts
> to measure national rates of profit use a different procedure—that of
> current cost accounting. The profit made in a given year is measured against
> the market value (ie the replacement cost) of the structures and equipment
> used. This necessarily leads to a distortion in the figures since any
> increase in productivity since the investment was made will mean that its
> current market value is less than what was laid out on it: the rate of
> profit will appear higher than it actually was.
This is wrong - unless the firm is planning to abandon the line when the capital goods wear out, it needs to replace them, so replacement costs make a difference to how much the firm needs to set aside in the depreciation fund out of returns from employing the asset.
Also, Harman writes in that piece: "Firms calculate the profitability of any investment by adding together the initial capital outlay on structures and equipment, adding the annual expenditure on raw materials, components and wages, and then dividing the total by their net profits, ie they divide what they laid out over a number of years by the profits made over those years."
This is really wrong also. Not only do numerator and denominator appear confused (!), but the relevant circulating capital component of the denominator is not the flow of outlays but the stock of funds sunk into the line. Firms are continually getting back in revenue what they pay out in wages and for inputs. It's the size of the revolving fund that matters, which is much smaller than the 'annual expenditure'.
> Brenner, http://escholarship.org/uc/item/0sg0782h.pdf :
> "Even as the millennium drew to a close, the rates of profit for both the
> manufacturing sectors and the total private economies of the US, Japan, and
> Germany, as well as Korea, were not close to regaining their former levels,
> and, despite much hype and misinformation to the contrary, they failed to do
> so during the current business cycle right up to the present."
"not close to regaining their former levels" is quite different from "no rise in 1982-97"
Mike Beggs