This is a REALLY good blog post from Michael Roberts...........

[socialist_n_TN]

the Marxist economist. It explains why both the Keynesians and the Austerians are wrong about investment under capitalism and why we're stuck in this low-growth phase in the economy. It explains it very well. I've learned so much from Michael Roberts over the last five years or so.

https://thenextrecession.wordpress.com/

[hedda_foil]

1. Very interesting. Thanks.

[cantbeserious]

2. Thank You For Sharing These Truths

eom

[Gregorian]

3. Wow, that's an eye opener.

Another new concept.

If that isn't a solid confirmation of where we need to go, I can't think of a better one. Thanks for the post.

[socialist_n_TN]

4. Thanks for the props, but ..........

it's not really a new concept. This is classic Marxism from a economist that has followed and noted trends in the capitalist economy for many years. As I said I personally, have been following Roberts blogs for five years or so and he's been writing and studying longer than that.

Marx based most his theories about the development of capitalism in its mature state on the tendency of the rate of profit to fall as new methods become available to cut costs. This merely backs up that tendency and shows how it works in the real economy. I shared this because I thought that this particular post shows that "how it works" most clearly.

One thing that capitalist propaganda has done the best IMO is to make EVERYBODY think that they're a capitalist when the truth is only a few are really capitalist. Now while it's true that we're all involved in the market, an artisan who makes scarves for sale on that market is NOT a capitalist. If he/she makes a scarf for $5 worth of materials and sells that scarf for $20, that doesn't mean he/she earned $15 in "profit". What he/she did was price his/her labor time at $15 per scarf. That's not profit, that's his/her labor time as defined by the market for scarves.

And it's the same for most small businesses, more or less. The petit bourgeoisie are not really capitalist like the grande bourgeoisie are. A Mom and Pop widget producer is usually happy to make ANY profit on their widgets, especially if that profit comes on the heels of enough cash flow to keep the business going and provide a salary that keeps body and soul together for the proprietor. ANY profit over and above that mark is something to be rejoiced in. For the big capitalists the dynamic is different. They must make enough profit to, not only pay for the greed of the collective ownership of the company (the shareholders getting paid dividends), but also enough to reinvest in expansion. Which is why you see "profitable" assets closed down and moved to places where there is even more profit to be made. IOW, it's not just a matter of "profit" for the big bourgeoisie, it's a matter of ENOUGH profit.

[Gregorian]

5. Thanks! I appreciate your comments and thoughts.

I have also been studying this for years. Richard Wolff is my go to economist at the moment.

[socialist_n_TN]

6. Richard is pretty good IMO......

albeit a little more of an "anarchist", but he definitely knows how capitalism works from a Marxian perspective.

On a side note there's a pretty big economic argument going on in those circles about how the tendency of the rate of profit to fall effects capitalist slumps, recessions, and depressions. Although you have to take into account contravening tendencies in the economy in regards to those slumps, I come down on the side of the ROP being the main factor MOST of the time and especially as a cause of the more severe shocks. I'm not sure where Professor Wolff comes down on this argument.