[Marxism] Stock Capital and the rate of profit

johnaimani johnaimani at earthlink.net
Mon Oct 12 13:34:18 MDT 2009


I think that if "stock capital" is read as "sunk capital" then the passage 
makes all the sense in the world.  See how he mentions "large productive 
industries"  "railroads" "contant capital largest in its relation to 
variable  capital.

These are like or may even be monoplies ort near-monoploies (high barriers 
to entry and do not participate in profit equalization) but if calculations 
are made on entire investment then a low rate of profit obtaions.  Reminds 
me of Brenner when writing of US 'old capital' competing with new Japanese 
and German capital after WWII.

http://books.google.com/books?id=MdzRuGutydYC&pg=PA44&lpg=PA44&dq=Brenner+sunk+capital&source=bl&ots=XvirFDu8cx&sig=2yav1NxJKrrNz9IU-BmDzm-y62A&hl=en&ei=9BzOSt-BNpHuswPE57W_Dg&sa=X&oi=book_result&ct=result&resnum=3#v=onepage&q=schrumpeter&f=false

leading to low rates of profit.

The fact that they (by virtue of monoploy postition) are withdrawn from the 
equalization process thus leading to a higher (than would be otherwise) 
general rate of profit.

JAI

----- Original Message ----- 
From: "S. Artesian" <sartesian at earthlink.net>
To: "Activists and scholars in Marxist tradition" 
<marxism at lists.econ.utah.edu>
Sent: Sunday, October 11, 2009 10:54 AM
Subject: Re: [Marxism] Stock Capital and the rate of profit


> You're not alone.  I've read that section over and over, worked for 
> railroads, and studied the economics of railroading, and I'm still not 
> sure that I grasp Marx's thought on this completely.
>
>  I think, and emphasize think, that Marx finds that the portion of capital 
> represented in the issuance of stock and producing dividends is not part 
> of the process of creating a general rate of profit because the dividend 
> rates are so much lower than the average rates of profit.
>
> Of course, as Michael Milliken and the LBOs, vulture investors, asset 
> strippers have proven, that situation can be reversed-- utilizing the 
> purchase of joint stock companies to award themselves dividends, 
> interests, payment far above the actual rate of profit, in effect 
> liquidating the company from the inside.
>
> The stock-capital could be included, added to the constant capital, 
> employed in production, but if so, then the rate declines even more.  I 
> think, again emphasize, think we see something along these lines if you 
> look at the US Dept. of Commerce Quarterly Financial Review of 
> industries-- there you see rates of return calculated as a return on 
> equity, and rates of return calculated on net property, plant, equipment.
>
>
> ----- Original Message ----- 
> From: "brendan cooney" <callmecooney at gmail.com>
> To: "David Schanoes" <sartesian at earthlink.net>
> Sent: Sunday, October 11, 2009 1:24 PM
> Subject: [Marxism] Stock Capital and the rate of profit
>
>
>>I have been puzzling over a paragraph in Volume 3 of Capital. I was
>> hoping some kind and wise soul on the list might be able to help me
>> understand it better. In the chapter on counteracting influences on the
>> falling rate of profit Marx ends with a paragraph about the way in which
>> Stock Capital enters, or doesn't enter into the rate of profit. I can't
>> seem to wrap my head around Marx's argument. I understand that the
>> division of surplus value into rent, interest, industrial profit, etc.
>> is secondary to calculating the rate of profit. But then he says that
>> interest payments don't go into the leveling of the general rate or
>> profit, giving the example of railroads. Is he saying that joint-stock
>> companies don't enter in the equalization of profit rates b/c dividend
>> payments are lower than the real profit rate? Or is he saying that
>> joint-stock companies do enter into the equalization of the rate of
>> profit but must calculated in terms of total mass of profit in these
>> industries and not just interest payments? How is this a counteracting
>> influence?
>>
>> Lawrence Harris' entry on "forms of capital and revenues" in the
>> Dictionary of Marxist thought says that joint-stock companies
>> represented a unique historic stage in capitalism and act as a
>> counteracting influence on the FRP because of their willingness to
>> accept a lower yield as a result of the dominance of interest. But I
>> don't see how a lower yield halts a falling rate of profit. I suppose
>> that I may have to wait until I get to Part 5 of Volume 3, but that may
>> take some time at the rate I'm going.
>
>
>
> 





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