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The Growth of Unproductive Activities, the Rate of Profit, and the Phase-Change of the U.S. Economy

Author

Listed:
  • Dimitris Paitaridis

    (University of Macedonia, Thessaloniki, Greece)

  • Lefteris Tsoulfidis

    (University of Macedonia, Thessaloniki, Greece)

Abstract

This paper by using the categories of productive and unproductive labor and by extending and further elaborating the data series utilized in Shaikh and Tonak (1994) reveals a sharp expansion of the unproductive activities in the U.S. economy during the period 1964-2007. The combination of growing productivity and the stagnant or even falling real wages of productive workers increased the rate of surplus value in the recent decades to unprecedented highs. As a consequence, the general rate of profit from the early 1980s onwards was also rising until the last years of our analysis; meanwhile the net rate of profit remained at levels much lower than those of the 1960s and the slightly rising trend during the post-1980s has been already reversed. The patterns of these crucial variables reveal startling similarities with the onset of the slowdown that started in the mid- to late 1960s.JEL classification: B5, E1, O51

Suggested Citation

  • Dimitris Paitaridis & Lefteris Tsoulfidis, 2012. "The Growth of Unproductive Activities, the Rate of Profit, and the Phase-Change of the U.S. Economy," Review of Radical Political Economics, Union for Radical Political Economics, vol. 44(2), pages 213-233, June.
    • Handle: RePEc:sae:reorpe:v:44:y:2012:i:2:p:213-233
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    Cited by:

    1. Lefteris Tsoulfidis & Dimitris Paitaridis, 2019. "Capital intensity, unproductive activities and the Great Recession in the US economy," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 43(3), pages 623-647.
    2. Jonathan F Cogliano, 2023. "Marx’s equalised rate of exploitation," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 47(1), pages 133-169.
    3. Malikane, Christopher, 2017. "Profitability and Crisis in the South African Economy," MPRA Paper 76165, University Library of Munich, Germany.
    4. Armanda Cetrulo & Dario Guarascio & Maria Enrica Virgillito, 2024. "Two neglected origins of inequality: hierarchical power and care work," LEM Papers Series 2024/04, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    5. Mavroudeas, Stavros D., 2015. "The Greek saga: competing explanations of the Greek crisis," Economics Discussion Papers 2015-1, School of Economics, Kingston University London.
    6. Antonio Freitas, 2021. "The Rate of Surplus Value in Brazil, 1996–2016," Review of Radical Political Economics, Union for Radical Political Economics, vol. 53(3), pages 398-422, September.
    7. Tavani, Daniele & Vasudevan, Ramaa, 2014. "Capitalists, workers, and managers: Wage inequality and effective demand," Structural Change and Economic Dynamics, Elsevier, vol. 30(C), pages 120-131.
    8. Tsoulfidis, Lefteris, 2013. "The ‘new golden age of accumulation’, the new depression and the greek economy," MPRA Paper 60577, University Library of Munich, Germany.
    9. John B. Davis & Wilfred Dolfsma (ed.), 2015. "The Elgar Companion to Social Economics, Second Edition," Books, Edward Elgar Publishing, number 15954.
    10. Jonathan F. Cogliano, 2017. "Surplus Value Production and Realization in Marxian Theory - Applications to the U.S., 1987-2015," Working Paper Series 2017-01, Dickinson College, Department of Economics.
    11. Roberto Veneziani & Luca Zamparelli & Deepankar Basu, 2017. "Quantitative Empirical Research In Marxist Political Economy: A Selective Review," Journal of Economic Surveys, Wiley Blackwell, vol. 31(5), pages 1359-1386, December.
    12. Henrique Morrone & Adalmir Antonio Marquetti & Alessandro Donadio Miebach, 2023. "Productive and Unproductive Sectors’ Interactions in Brazil: A Miyazawa Analysis," Review of Radical Political Economics, Union for Radical Political Economics, vol. 55(2), pages 251-268, June.
    13. Tsoulfidis, Lefter, 2014. "Κρίση, Σύγχρονος Καπιταλισμός Και Ταξικές Ανακατατάξεις [Economic Crisis, Modern Capitalism and Class Realliances]," MPRA Paper 62692, University Library of Munich, Germany, revised 2015.
    14. Tsoulfidis, Lefteris & Tsimis, Achilleas & Paitaridis, Dimitris, 2018. "The Rise and Fall of Unproductive Activities in the US Economy 1964-2015: Facts, Theory and Empirical Evidence," MPRA Paper 84035, University Library of Munich, Germany.
    15. Rotta, Tomás N. & Kumar, Rishabh, 2024. "Was Marx right? Development and exploitation in 43 countries, 2000–2014," Structural Change and Economic Dynamics, Elsevier, vol. 69(C), pages 213-223.
    16. Basu, Deepankar, 2015. "A Selective Review of Recent Quantitative Empirical Research in Marxist Political Economy," UMASS Amherst Economics Working Papers 2015-05, University of Massachusetts Amherst, Department of Economics.
    17. Phillip Anthony O’Hara, 2013. "Policies and Institutions for Moderating Deep Recessions, Debt Crises and Financial Instabilities," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 60(1), pages 19-49, March.
    18. Lefteris Tsoulfidis, 2017. "Growth Accounting of the Value Composition of Capital and the Rate of Profit in the U.S. Economy: A Note Stimulated by Zarembka’s Findings," Review of Radical Political Economics, Union for Radical Political Economics, vol. 49(2), pages 303-312, June.
    19. Dong–Min Rieu & Hyun Woong Park, 2018. "Unproductive Activities and the Rate of Surplus Value at the Industry Level in Korea, 1995–2015," UMASS Amherst Economics Working Papers 2018-07, University of Massachusetts Amherst, Department of Economics.
    20. Emiliano López & Facundo Barrera Insua, 2019. "The Specific Conditions of the Valorization of Capital in a Dependent Nation: The Case of Argentina (2002–2014)," Review of Radical Political Economics, Union for Radical Political Economics, vol. 51(1), pages 75-94, March.
    21. Manuel Rubio-García & Santiago Castaño-Salas, 2020. "El excedente económico en economías periféricas: una perspectiva teórica desde los aportes de Baran, Prebisch y Furtado," Ensayos de Economía 19133, Universidad Nacional de Colombia Sede Medellín.
    22. David M. Brennan, 2018. "Regimes of Realization: Using Marx and Kalecki to Understand the US Economy, including the Great Recession and the “Recoveryâ€," Review of Radical Political Economics, Union for Radical Political Economics, vol. 50(4), pages 757-772, December.

    More about this item

    Keywords

    unproductive labor; surplus value; rate of profit; U.S. economy;
    All these keywords.

    JEL classification:

    • B5 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches
    • E1 - Macroeconomics and Monetary Economics - - General Aggregative Models
    • O51 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada

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