What can we conclude from all this?
First, the secular decline in the US rate of profit since 1945 is confirmed and indeed, on most measures, profitability is close to post-war lows. Second, the main cause of the secular fall is clearly a rise in the organic composition of capital, so Marx’s explanation of the law of the tendency of the rate of profit to fall is also confirmed. Third, profitability on most measures peaked in the late 1990s after the ‘neoliberal’ recovery. Since then, the US rate of profit has been static or falling. And fourth, since about 2010-12, profitability has started to fall again.
The fall in the rate of profit in the US has now given way to a fall in the mass of profits.
If this trend continues, then as I have shown elsewhere, investment will follow downwards and, with it, the US economy. Watch this space.
We now have the latest data from the US Bureau of Economic Analysis (BEA) going up to 2014 in order to work out a ‘Marxian rate of profit’ for the US economy. So I have revisited the data in order to bring things up to date. All the data behind the following graphics are available on request (and see the pdf version for the appendix on sources and methods for each graphic, US rate of profit revisited).
I have not looked at this since the end of 2013, so it is high time to see where the US rate of profit has gone since then and draw some conclusions.
Now how to measure the rate of profit in a ‘Marxian’ way is a matter for continual debate and this post will not go over ground dealt with before. Instead, I refer you my paper on measuring the rate of…
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