Stagnation. Here's Marx's most controversial — and most curious — prediction. That as economies stagnated, real rates of profit would fall. How does this one hold up? On first glance, it seems to have been totally discredited: corporate profits have broken through the roof and into the stratosphere. But think about it again, in economic terms: Marx's prediction concerned "real profit," not just the mystery-meat numbers served up by beancounters, and chewed over with gusto by "analysts." When seen in those terms, Marx might be said to have been onto something: though corporations book nominal profits, I'd suggest a significant component of that "profit" is artificial, earned by transferring value, rather than creating it (just ask mega-banks, Big Energy, or Big Food). I've termed this "thin value" and Michael Porter has described it as a failure to create "shared value." Replace "declining real profit" with "shrinking real value" and it's analogous to what Tyler Cowen and I have called a Great Stagnation (though our casus belli for it differs significantly from Marx's).
----- Original Message ----- From: "Sandy Harris" <sandyinchina at gmail.com> To: lbo-talk at lbo-talk.org Sent: Wednesday, September 7, 2011 6:49:57 PM Subject: [lbo-talk] A capitalist blogs on "Was Marx right?"
In the Harvard Business Review blog pages: http://blogs.hbr.org/haque/2011/09/was_marx_right.html ___________________________________ http://mailman.lbo-talk.org/mailman/listinfo/lbo-talk