Andrew Kliman

Evidence based on US government statistics indicates that the rate of profit fell and employees’ share of output was trendless between 1970 and the Great Recession. This paper defends that evidence by showing that it is compatible with phenomena that may initially seem to contradict it; that is, rising income inequality and rising managerial compensation. While some other studies claim that managers’ compensation and the ‘class’ rate of profit skyrocketed, this paper shows that these studies seriously overestimate managers’ pay, and the share of their pay that can be construed as capital income (disguised dividends) rather than as genuine labour compensation.

To help understand why the Great Recession occurred, this article focuses on its underlying causes and employs Karl Marx's theory of capitalist economic crisis. It shows that U.S. corporations' rate of return on fixed asset investment fell throughout the half‐century preceding the recession, and that this fall accounts for the entire decline in their rate of capital accumulation (productive investment). The investment slowdown led to a decline in the rate of economic growth, which was a main cause of rising debt burdens, as were stimulative fiscal and monetary policies that delayed but exacerbated the effects of the underlying economic problems. The article also refutes the claim that the rate of profit could not really have fallen because massive redistribution of income from wages to profits took place, and it argues that it is unlikely that major crises of capitalism can be eliminated.

The rate of capital accumulation in the USA has fallen markedly in recent decades. Works in the financialisation literature have tried to explain this phenomenon by arguing that rising financial payments and purchases have come at the expense of productive investment. This article shows that such arguments are not supported by the data. It also explains theoretically why rising dividend payments and the growth of corporations’ portfolio investment are compatible with the fact that corporations’ productive investment did not decline during the first two decades of ‘neoliberalism’ in the USA. There would necessarily be a trade-off between these uses of funds if they were all funded out of current profits, but there is no necessary trade-off because borrowed funds are an additional source. Finally, the article shows that the fall in US corporations’ rate of profit (rate of return on investment in fixed assets) fully accounts for the fall in their rate of capital accumulation.

This paper argues that the renewed relevance and strengthened theoretical foundations of Marxian value theory will not matter unless the long-term disintegration of Marxian economics is reversed, and that this disintegration has largely been caused by internal factors. These include a lack of common standards and criteria of justification; an ‘every man his own Marxist’ ethos; the quest to make Marxian economics respectable; the pursuit of ‘product differentiation’; a reliance on the resources of academia; and an instrumental approach to ideas. Finally, the paper proposes several measures to halt and reverse the process of disintegration.

Ernesto Screpanti recently claimed to prove that Marx's value theory is logically inconsistent. Jettisoning the value theory, he then reconstructed Marx's theory of exploitation in a manner that supposedly preserves the gist of the original. This note shows that Screpanti's proof of inconsistency is invalid and that his reconstruction contradicts the original theory of exploitation in significant ways, for instance by implying that workers who perform surplus labor can exploit capitalists.