I note your reference to sophistry which leads naturally to the Socratic response to sophistry which was of course dialectics. What distinguishes Marxist economics I believe from classical or neoclassical models (including those of perhaps some superficial Marxists) is the dialectic of class struggle which is at the heart of Marx’s approach but of little interest to his detractors..

many thanks. I look forward to reading the revised paper, and to our next encounter at some conference or other.

best wishes

John

Just checked and I must have got the data from your paper as I can see that you have done a lot of work from the ILO employment data to construct it and I certainly did not do that for this paper! And anyway, the idea for this compelling comparison was yours. I had a look at the latest ILO EO report data and can see how you managed it – nice.

I see that the ILO reckons that for 2011, the EM industrial workforce is now 576m, a huge jump from 412m in 2000 and up even through the Great Recession, while in developed economies it has fallen to just 104m from 121m in 2000.

I am revising my paper in the light of various criticisms some of which you heard in Paris, so I shall post the revision on my blog and make sure your work on this is properly recognised in that.

The two books on the Origins of Marx’s Capital by the Australian academic (name escapes me but it is in my pile of books somewhere) hinted at attempts that he made, using GVA if my memory is correct. The books cited Engels saying it was measurable but there were problems with the data at that current time. Also Marx’s work on turn over time and profits used actual figures from firms.

Furthermore Marx said that the bourgeoisie “recognised” that the rate of profit declined, it is in Smith and Ricardo, but could not come up with an explanation of why. His “critique” was in providing an explanation lodged within the process of accumulation itself rather than just increases in wages as put forward by Smith.

There is also the question of debt, a relatively new phenomenon in its size and scope, which has both been a driver of neo-liberalism in the form of types of capitalist enterprise such as private equity, hedge funds etc and complicates the measuring of the TRPF.

For example in the chapter in vol III on countervailing tendencies Marx’s points to joint stock (ie shareholders) and the way it is treated by the bosses as not being part of the ROP and therefore a countervailing tendency (the inference being it would have reduced the ROP if it had been included). Obviously it is, dividends are a return on an outlay of capital despite or because of their fictitious characteristics. Part of the neo-liberal programme has been about increasing shareholder value, which has been documented by bourgeois commentators, Should debt also be included?

(I believe Michael as made calculations of the ROP that have included consideration of debts)

As for a global rate, I would argue that there is a tendency towards it but costs of entry, types of markets, states etc would cause variations in its uniformity. How far globalisation of capital has smoothed out these variations is a moot point.

(I did some calculations for the UK, US, France and Germany before 2008. They showed that France and Germany were uniform and stable, with the UK a bit higher and then the US highest of the four. The latter two had show a rise in 1990s and early 2000s.)

Looking at the comments above, I am not sure that this means that the capitalists refuse to invest in the current period because they believe that it will lower the rate of profit globally, that appears to be assigning them a collective viewpoint beyond their capacity or even ability given the necessary role of competition. Rather they hoard because they won’t obtain the returns that they expect historically. Marx again in vol III talks about hoarding as a response in a recession.

Finally, I believe it does have importance as a social law that should be proved empirically as it explains the crisis ridden nature of capitalism as being a product of its inherent contradictions. If Marxists argue it can not be measured and only discussed its effects then how can we win the argument for a planned economy to overcome the ROP and its effects?

Otherwise it strikes me we would only be arguing a point of faith: these things happen because of something that we cannot prove, and that would hardly arm ourselves against the right or the Keynesians who can point to proofs of their theories, albeit wrong.

The various bubbles (fictitious capital) to 2007 reflected the gap between productive investment and profit – and the global grow in the latter. After the deep financial crisis of 2008 in the imperialist countries, non-financial corporations are hoarding profits and hence productive investment is relatively low. Real wages have been cut, with the medium term project being to reduce the social element of wages – austerity.

And what explains the loss of confidence?