Rate Of Surplus Value Research Articles

Dynamics of class and labour: Evidence from a longitudinal study in Rajasthan (India)

AbstractIn the Gang Canal region of Rajasthan, the cropping pattern changed from a labour intensive crop, cotton, to a mechanized crop, cluster beans. The shift in cropping pattern not only displaced workers from farm wage work but also brought changes in labour hiring contracts with large scale conversion of daily wage rate contracts to piece‐rate contracts. Drawing on a primary survey in a village from Gang Canal region, the paper examines the change in the agrarian relations in rural Rajasthan by analysing the emerging development in the rural labour relations. For piece‐rate work in farm wage work in some parts of Rajasthan, the wage rate is unilaterally decided by the landlords and large capitalist farmers and is denoted as the ‘village rate’. The manual workers have negligible bargaining power vis‐à‐vis the village rate. The conversion of daily wage rate contracts to piece‐rate contracts has enhanced the duration of working day that involves a rise in the rate of surplus value. Access and availability of low wage labour facilitates the accumulation of capital. With the limited availability of employment in the non‐farm sector (in both public and private sectors), workers are compelled to sell their labour power at wages that do not exceed the level of subsistence. The paper concludes with a brief examination of continuum of coercion and varied degree of unfreedom among worker in the village.

Marx's concept of “exploitation” and the problem of measurement

The paper scrutinizes Marx's proposal to measure the “degree of exploitation” in terms of the “rate of surplus value”. This amounts to defining an equivalent to the device of the thermometer in measuring temperature. The condition to be met is that a concept must be suggested that allows one to express the degree of exploitation in an independent manner and to show that the two move in parallel with one another. It is then shown that the rate of surplus value does not satisfy the sought criterion, because it may move in opposite direction of the degree of exploitation. This is demonstrated in terms of a simple numerical example with a choice of technique concerning the lengthening of the working day.

Salary basket and value of the labor force of Mexico

The essay first examines the relations between the rate of surplus value and the value of the labor force. It then focuses on the examination of the determinants of the value of the labor force: real wages, annual work hours, and labor productivity in the branches that produce wage-goods. Along with the formal analysis, the values assumed by such variables in the Mexican economy during the validity of the neoliberal model are quantified. Here we observe a strong decrease in the hourly value of the labor force (increase in the rate of surplus value), in which the decrease in real wages plays a key role.

Profitability and Its Determinants: Operationalizing the ‘Law of the Tendency of the Rate of Profit to Fall’ in the US Economy, 1950–2020

This analysis seeks to demonstrate the theoretical and empirical salience of the ‘law of the tendency of the rate of profit to fall’ in relation to the concrete evolution of the US economy between 1950 and 2020. The theoretical-methodological approach adopted in this study is based on the work of Shane Mage and Murray E.G. Smith. This approach re-specifies the Marxian value categories and ratios for purposes of empirically operationalizing them as a theory of fundamental capitalist dynamics using national accounting data. Contributions include (1) the treatment of systemically necessary unproductive labour as a ‘constant capital overhead cost’ and (2) a method of managing ‘fictitious profits’ that are imputed into the national accounts and thereby enabling a more realistic estimate of ‘social surplus value’ (the numerator of the Marxian average rate of profit) in what has become an ‘era of fictitious capital’. The empirical findings reveal a persistent rise in the organic composition of capital, as well as a rise in the rate of surplus value, accompanied by a long-term downward trend in the average rate of profit in the postwar US economy.

Capital Composition and Rate of Surplus Value: Empirical Evidence for Rethinking the Value Transfers in International Trade

This article aims at advancing an explanation, still to be completed, of the paradox of productivity differences and surplus value rate at an international level. New empirical evidence is presented, and it is suggested that an explanation should be developed based on the analysis of the problem of value transfers in international trade. According to the findings of Martínez and Valle (2011), there is empirical evidence that suggests a pattern in which underdeveloped countries with low productivity have a high value composition of capital and a high rate of surplus value, the former being as high as or higher than the corresponding one in a developed country. This work is a contribution to the development of the state of the empirical analysis. Said contribution is made based on econometric and statistical evidence of the relationship between rate of surplus value and value composition of capital of a selection of countries and a sample of 70 countries. Data from Penn World (PWT) v.10, v.9 or Extended Penn World Table (EPWT), v.4 are used.

The impact of the surplus value rate and rule of law on economic performance

This study investigates the impact of four legal origins (i.e., English, French, German, and Scandinavian) of a sample of countries on the rate of surplus value and rule of law. It also examines how these factors affect the size of credit provided by banks and economic performance. We found that the rate of surplus value and rule of law affect both the size of bank credit and economic performance. Simultaneously, the rate of surplus value and the rule of law are correlated. Furthermore, the marginal effects of the rate of surplus value and the rule of law on economic performance differ by legal origin.

The Chilean economy, an analysis of the dynamics of profits, investments and production: A Marxist approach

This article aims to examine the dynamics of the Chilean economy as a consequence of actions taken by companies whose aim is to make profits. As such, the economic analysis used is Marxist and makes use of those classical indicators described in Capital (Rate of Surplus-Value, Organic Composition of Capital and Rate of Profit). It is maintained that with the Marxist method, we can discover that behind the accumulation of incomes lies the fact that out of each 8 hours worked, only 3 finance wages and 5 benefit the owners of capital. That fraction of the unpaid labour received by capital but invested back as new capital, plus that ‘excess’ surplus value that is consequence of high copper prices, raises the physical, but not necessarily the value, capital-per-worker ratio. As a consequence, that relation of exploitation to capital accumulation, which Marx called the Rate of Profit, is found to fall, rise and then fall again. We understand that various approaches have been made to calculate the classical indicators and include some of them as alternative methods in our results.

Empirical evaluation of the law of value

The law of value is empirically evaluated as it relates to the distribution of capital across industries and their appropriation of surplus value, using US economic census manufacturing data from 1997 through 2017. Strong correlation is demonstrated between the annual surplus value appropriated and mass of capital stock, with thecoefficient of determination values ranging 0.75–0.85. Correlation between the product of the effective rate of surplus value and theannual number of turnovers of variable capital versus the organic composition of capital plus one yields coefficient of determination values ranging 0.50–0.61. Factors underlying this correlation are evaluated. Taking market concentration into account only marginally improves the coefficient of determination values. To model results, a theoretical framework is presented in which surplus value is partially retained and partially redistributed across industries. Lastly, the term ‘concrete composition of capital’ is introduced to denote the ratio of fixed capital to circulating capital, as a counterpart to the organic composition of capital. This ratio increases over time indicating technological progress under capitalism is mobilized to decrease unit production costs, expand the scale of production, and reduce the turnover period of circulating capital as fundamental means of competition.

Capitalist Accumulation, Contradictions and Crisis in China, 1995–2015

Drawing upon Marxian and regulation theory, this article seeks to identify key dynamics and contradictions of capitalist accumulation in China between 1995 and 2015 and to explain these in their institutional context. To this end, data from national accounts and input-output tables is re-mapped to estimate Marxian categories such as the rates of surplus value and profit. The article demonstrateshow the transformation of the wage relation and an increase in the rate of surplus value lie at the core of a predominantly extensive accumulation regime that enabled rapid and uncoordinated growth facilitated by world market integration. In the wake of the global crisis, however, a confluence of contradictions has led to over-accumulation and a decline in profitability, clear symptoms of exhaustion of the accumulation regime that explain the current slowdown under the “New Normal.” The underlying contradictions are rooted in the institutional context of the “Socialist Market Economy,” but especially in the wage relation, which no longer supports sufficient increases in the rate of surplus value or a regular pace of accumulation.

The Rate of Surplus Value in Brazil, 1996–2016

This paper estimates the Brazilian economy’s rate of surplus value as well as its underlying determinants, i.e., wage rate and labor productivity between 1996 and 2016. In addition, it builds a theoretical narrative of the Brazilian economy that integrates its political successions, highlighting the governments of Fernando Henrique Cardoso (1995–2002), Luiz Inácio Lula da Silva (2003–2010), Dilma Rousseff (2011–August 2016), and the parliamentary coup d’état (December 2015–August 2016). The findings are presented based on the classical political economy tradition, which sees capital-labor struggle as a key, albeit nonexclusive, condition that frames the economic, political, and ideological disputes of society. JEL Classification: B51, E25, N16

Unproductive Activities and the Rate of Surplus Value at the Industry Level in Korea, 1995–2015

ABSTRACTIn order to explain how the Korean economy underwent structural change through the two crises of 1997– 1998 and 2008 within the context of globalisation, this article focuses on class analysis and inter-sectoral value transfer by estimating the sectoral rates of exploitation along with the sectoral monetary expressions of labour time. Our data indicate the possibility that the expansion of unproductive activities, accompanied by intensification of exploitation within the unproductive sectors, might not have overtaken capital accumulation in Korea during 1995–2015. It can also be concluded that the condition for manufacturing’s capital accumulation steadily improved since the 1997–1998 crisis but started to deteriorate after 2011. Our value-theoretic analysis provides a foundation for understanding the context of the regime change, which may plausibly characterise the Korean economy in the last couple of decades.

Trends of Marxian Ratios in South Korea, 1980–2014

ABSTRACTThis article explores the dynamics and contradictions of capital accumulation in South Korea from 1980 to 2014 by analysing the rates of surplus value and profit and criticises two theses of financialisation and income-led growth. The rate of surplus value soared after 2000 because the real wage growth was contained by the neo-liberal onslaught against workers. The profit rate consistently declined after 1987, paving the way for the 1997 crisis and its main driver was the rising organic composition of capital. After the 1997 crisis, the profit rate rebounded for six years thanks to the intensified exploitation of workers. From 2002 until the 2008 global financial crisis, the rate of profit dropped again. However, contrary to the financialisation thesis, there has been no substantial transfer of surplus value from the real sector to the financial sector. Our results also show that the accumulation rate determined income distribution, not vice versa, contradicting the income-led growth strategy, now popular among the Korean progressives. Marxian macro-dynamics is operating as usual in Korea.

THE HISTORICAL PEAK OF THE RATE OF SURPLUS VALUE AND THE “NEW NORMAL” OF THE CHINESE ECONOMY: A POLITICAL ECONOMY ANALYSIS

ABSTRACT This paper reports homogenous series of the rate of surplus value for the Chinese economy over the period 1956-2015 with a Marxian approach. It finds that the rate of surplus value reached the historical peak of the whole period in 2008 and that the high profitability in the decade before the 2008 crisis had relied on the continuous growth in the rate of surplus value. It provides a time series analysis to show that the rising wage pressure and value composition of capitalhas restrained profitability since 2008. Thus, this paper interprets the so-called “new normal” of the Chinese economy as a stage of declining profitability that results mainly from the stagnant rate of surplus value and the rising value composition of capital.

Sectoral mark-ups in U.S. Manufacturing

This study investigates the mark-up on average costs in the U.S. manufacturing industry at the aggregate and two-digit industry levels. We first analyze the behavior of profit margins over seven business cycles between 1958 and 1996 and establish some stylized facts for the cyclical dynamics of mark-ups. Second, we look at the secular movements in margins of profits through a simple trend decomposition of the aggregate and two-digit mark-ups. We find that: (1) the aggregate and the majority of two-digit mark-ups behave pro-cyclically; and (2) the trend in margins of profits in the period is explained by a marked rise in the rate of surplus value and a fall in the composition of capital, indicating labor-saving/capital- using technical change.

Is There a Tendency of the Rate of Profit to Fall? Theory, Evidence and an Adequate Model

The Law of the Tendency of the Rate of Profit to Fall, put forward by Marx in Capital Vol.3, is a theoretical summary of the social reality of capitalist society. However, this law is still controversial and some scholars have criticized Marx for it, including Japanese scholar Okishio Nobuo in his Okishio Theorem, although these criticisms are theoretically untenable. In this article, after commenting on the relevant arguments, we show that the rate of profit inevitably falls and develop a model to illustrate this. We find Marx's claim that the falling rate of profit, followed by the higher organic composition of capital, is justified even under the circumstance that the rate of surplus value rises and new fixed capital reduces.

The Rate of Surplus Value in South Korea: 1980-2011 - Improving the Weakness of Calculation Method Using 'Monetary Expression of Labor Time'

The Rate of Surplus Value in South Korea: 1980-2011 - Improving the Weakness of Calculation Method Using 'Monetary Expression of Labor Time'

The Non-Farm Rate of Profit and the Thai Economic Development: 1970–2010

The article measures the non-farm profit rate in Thailand from 1970 to 2010. The shape of the profit rate suggests that the Thai economy can be differentiated into four phases. The decomposition analysis reveals that the organic composition of capital has greatly contributed to fluctuations of the profit rate, while the rate of capacity utilization and the capacity—capital ratio have positive impacts in three out of four phases. Meanwhile, the profit share and the rate of surplus value have just slight impacts on the profit rate. Furthermore, the article discusses that the capitalist class has always been a dominant class who could benefit from economic development, and the profit rate determines the growth rate of capital stock in Thailand.

Unproductive labour, capital accumulation and profitability crisis in the Greek economy

The focus of this paper is on the evolution of the major macroeconomic variables of classical political economy and the contrast with their orthodox counterparts in the quest to identify the causes of the current crisis in the Greek economy. Our analysis shows that declining profitability past a certain point leads to a stagnant mass of real net profits that discourage investment and increase unemployment. More specifically, for the period 1970–2007 for which we have detailed data, we identify the so-called silent depression of the 1970s and early 1980s, the new golden age of accumulation during which the capitalization of the production process led to a rapidly growing productivity and with stagnant or slowly rising real wages increased the rate of surplus value to new heights. As a consequence, the rate of profit from the mid-1980s onwards displayed a mildly rising trend and remained at a much lower level than that of the early 1970s. The rate of profit starts to fall after 2007, the year of the onset of the (world) economic crisis, and this continues up to 2014. Our econometric analysis based on an ARDL model further shows that the incremental rate of return, a variable derived from, and therefore strictly related to the average rate of profit, constitutes a by far more concrete measure of profitability and, in combination with the real interest rate, shapes the process of capital accumulation.

Materialized Composition of Capital and its Stability in the United States

The materialized composition of capital, a concept needing more attention, helps to correctly understand the value or organic composition that Marx discussed. For theoretical clarity, it is actually preferable. Evidence from frequently utilized data indicates that the materialized composition in the United States has been stable since 1956 at a level around two. Changes in the value or oft-cited organic composition of capital have, therefore, been limited to changes in the rate of surplus value.

한국경제에서의 이윤율 변화와 결정요인들

Abstract With regard to conventional theory, the rate of profit is determined by the interaction between the rate of surplus value and the organic composition of capital. And it declines with the capitalistic development through intensifying the organic composition of capital. According to the empirical test, the rate of profit and the rate of surplus value have been decreased. On the contrary, the organic composition of capital have increased during the period under study. The empirical results of the rate of profit in Korean economy appears to hold the principle of the law of the tendency of the rate of profit to fall. But the trend of the determinants is distinct from the conventional theory. Despite the distinctive empirical results, the law of the tendency of the rate of profit to fall is realized in Korean economy in objective period of time. Key Words : Rate of Profit, Rate of Surplus Value, Organic Composition of Capital, Law of the Tendency of the Rate of Profit to Fall, Periodization요 약