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The Productivity Slowdown and the Fall in the U.S. Rate of Profit, 1947-76

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  • Edward N. Wolff

    (Department of Economics, New York University, New York, NY 10003)

Abstract

I find that the general rate of profit in the United States economy remained fairly stable from 1947 to 1967 and then declined sharply between 1967 and 1976. I argue that the movement of the rate of profit over time is a result of two factors: (1) the rate of growth of labor productivity and (2) the rate of growth of the real wage. During the period from 1947 to 1967, the two moved in concert, while in the latter period real wage growth exceeded that of labor productivity. The decline in the profit rate after 1967 is thus a consequence of a profit squeeze, which in turn was induced primarily by the sharp slowdown in labor productivity growth. Though real wage growth also fell after 1967, it did not fall to the same degree, primarily because of large increases in social security contributions.

Suggested Citation

  • Edward N. Wolff, 1986. "The Productivity Slowdown and the Fall in the U.S. Rate of Profit, 1947-76," Review of Radical Political Economics, Union for Radical Political Economics, vol. 18(1-2), pages 87-109, March.
    • Handle: RePEc:sae:reorpe:v:18:y:1986:i:1-2:p:87-109
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    Cited by:

    1. Jonathan F. Cogliano & Roberto Veneziani & Naoki Yoshihara, 2016. "The Dynamics of Exploitation and Class in Accumulation Economies," Metroeconomica, Wiley Blackwell, vol. 67(2), pages 242-290, May.
    2. Jonathan F. Cogliano & Roberto Veneziani & Naoki Yoshihara, 2019. "Exploitation, skills, and inequality," Review of Social Economy, Taylor & Francis Journals, vol. 77(2), pages 208-249, April.
    3. Julian Wells, Julian, 2007. "The rate of profit as a random variable," MPRA Paper 98235, University Library of Munich, Germany.

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