Sectorial Exclusion Criteria in the Marxist Analysis of the Average Rate of Profit: The United States Case (1960-2020)

The long-term estimation of the Marxist average rate of profit does not adhere to a theoretically grounded standard regarding which economic activities should or should not be included for such purposes, which is relevant because methodological non-uniformity can be a significant source of overestimation or underestimation, generating a less accurate reflection of the capital accumulation dynamics. This research aims to provide a standard Marxist decision criterion regarding the inclusion and exclusion of economic activities for the calculation of the Marxist average profit rate for the case of United States economic sectors from 1960 to 2020, based on the Marxist definition of productive labor, its location in the circuit of capital, and its relationship with the production of surplus value. Using wavelet-transformed Daubechies filters with increased symmetry, empirical mode decomposition, Hodrick-Prescott filter embedded in unobserved components model, and a wide variety of unit root tests the internal theoretical consistency of the presented criteria is evaluated. Also, the objective consistency of the theory is evaluated by a dynamic factor auto-regressive model, Principal Component Analysis, Singular Value Decomposition and Backward Elimination with Linear and Generalized Linear Models. The results are consistent both theoretically and econometrically with the logic of Marx’s political economy.