Fred Moseley

The Rate of Profit and the Future of Capitalism

This paper argues that the future of capitalism depends mainly on the rate of profit. Updates of previous estimates of the rate of profit are presented which show that the rate of profit has recovered only about 40 percent of the prior decline in the rate of profit during the 1960s and 1970s, thus suggesting that the current stagnation in the U.S. economy is likely to continue in the foreseeable future. It is argued that the main reason for the lack of a more significant increase in the rate of profit is a continued increase in the relative proportion of unproductive labor.

The United States Economy at the Turn of the Century: Entering a New Era of Prosperity?

This paper argues that the US economy is not entering a new era of prosperity, mainly because the rate of profit remains 30-40% below its earlier postwar peaks, in spite of a 20% reduction of real wages since the early 1970s. Under these conditions, real wages are unlikely to increase very much (if at all) in the years ahead. The paper also argues that an important reason for the acceleration of growth in the US economy since 1995 is a large and rapidly increasing net inflow of foreign capital (which also precipitated the worsening depression in Asia). The final section argues that the chances of a recession in the US in 1999 are high, and that such a depression would probably propel the world capitalist economy into deep depression.

Emphasizing Controversy in the Economics Curriculum

(1991). Emphasizing Controversy in the Economics Curriculum. The Journal of Economic Education: Vol. 22, No. 3, pp. 235-240.

Estimates of the Rate of Surplus-Value in the Postwar United States Economy

One important prediction of Marxs theory is that the rate of surplus-value will increase as a secular tendency. This paper subjects this prediction of Marxs theory to an empirical test, by deriving annual estimates of the rate of surplus-value in the United States economy over the period 1947-1977. These estimates show that the rate of surplus-value in the United States economy increased significantly over this period, as predicted by Marxs theory. These estimates are then compared with other estimates of the rate of surplus-value in the postwar United States economy which are based on different interpretations of the main theoretical issues involved in the estimation of the rate of surplus-value. This comparison shows that the theoretical issue which makes the most difference in the estimated trend of the rate of surplus-value is whether or not Marxs distinction between productive labor and unproductive labor is taken into account in the definition of the rate of surplus-value.

The Determination of the “Monetary Expression of Labor Time” (“MELT”) in the Case of Non-Commodity Money

This paper suggests a way to determine the “monetary expression of labor” (the “MELT”) in today’s regime of inconvertible credit money, a way that is consistent with Marx’s general theory of money and is quantitatively the same as Marx’s determination of the MELT in the case of the inconvertible fiat money of his time. In order to explain this method of determination of the MELT in the case of modern inconvertible credit money, the paper first reviews Marx’s determination of the MELT in the case of commodity money and in the case of the inconvertible fiat money of his time. The final section of the paper discusses the similarities and the differences between my interpretation and Saros’s (2007) interpretation of the MELT in the case of inconvertible fiat money. JEL classification: B51, E11

Marx’s Reproduction Schemes and Smith’s Dogma

The best-known part of Volume Two of Capital is the reproduction schemes in Part Three. Marx’s reproduction schemes have been widely interpreted to be essentially the same as Leontief input-output tables, or the technology matrices in Sraffian theory or in neo-classical growth theory (for example, Lange, 1969; Morishima, 1973; Howard and King, 1985; Gehrke and Kurz, 1995). These technology matrices consist of physical quantities of inputs and outputs for the various sectors in the economy. According to this interpretation, Marx’s reproduction tables also consist fundamentally of physical quantities of inputs and outputs, which are aggregated into departments by means of labor values. The main purpose of Marx’s reproduction tables, according to this interpretation, is to analyze the conditions for balanced growth, or the proportions between the physical inputs and outputs of the different sectors of the economy which are necessary for balanced growth to occur.

The Decline of the Rate of Profit in the Postwar US Economy: Is the Crisis Over?:

Using Marxs theory of the tendency of the rate of profit to fall, this article attempts to analyse the crisis in the economics of the US and other advanced capitalist countries in the 1990s. Distinguishing the unprofitability of capital at the root of the problem, it also investigates the policies of the government and their ineffectiveness in halting the deepening crisis.

The Marginal Productivity Theory of Capital in Intermediate Microeconomics Textbooks

This paper focuses on the marginal productivity theory of capital and the price of capital, and examines some fundamental problems in this theory and how these problems have been dealt with in three leading undergraduate intermediate microeconomics textbooks by Varian, Frank, and Nicholson-Snyder. The three main problems to be discussed are: (1) it is impossible to incorporate materials inputs (and intermediate inputs in general) into marginal productivity theory because the existence of materials inputs in production processes invalidates the basic concept of the marginal product of capital (or labor), which is the foundation of the theory; (2) because the concept of the marginal product of capital (or labor) is invalid, so is the derivation of the demand for capital (or labor), which is based on the marginal product of capital; and (3) ultimately the marginal productivity theory of capital takes as given what it is supposed to explain: the return to capital.

Piketty and Marginal Productivity Theory

Abstract: This paper focuses on Piketty’s explanation of the increased capital share of total income in major economies in recent decades presented in chapter 6 of his 2014 book. Piketty’s explanation is presented in terms of the theoretical framework of the marginal productivity theory of distribution. The first section of the paper critically reviews the key elements of marginal productivity theory: production function, marginal products, diminishing returns, and elasticity of substitution. The second section summarizes Piketty’s explanation of the increasing capital share in terms of marginal productivity theory; the third section critically evaluates Piketty’s explanation; and the fourth section briefly presents an alternative heterodox explanation of the increased capital share in recent decades.

Capital in General and Marx's Logical Method: A Response to Heinrich's Critique

Heinrich (C&C 38, 1989) argued that, while working on the second draft of Capital in the early 1860s, Marx encountered crucial difficulties in maintaining the distinction between capital in general and competition. Moseley argues that, to the contrary, this 1861–63 manuscript shows Marxs increasing clarity on this distinction and its profit and in the distribution of surplus values into revenues.