Tag Archives: profit

I was invited to speak at the International Conference on ‘Liberalism, Marxism, Study of Realism, Gandhism and Communism’, organised by FARAK in India. The subject of my speech is ‘Marxism and its contemporary relevance’. The transcript of my speech follows. FARAK international conference ‘Liberalism, Marxism, Study of Realism, Gandhism and Communism’    ‘Marxism and its contemporary relevance’ Stavros Mavroudeas Professor of Political Economy Panteion University, Athens, Greece...

Mainstream economists refer to it as price theory, everyone else value theory. But whatever it’s called, it’s at the center of economists’ differing explanations of what happens in (and alongside) markets. As I see it, price/value theory serves as the framework to explain a wide range of phenomena, from how and for how much commodities are exchanged in markets through the determinants of the distribution of incomes to the outcomes—for the economy and society as a whole—of the allocation of...

Last week saw two high-profile corporate failures in the UK. Toys R Us finally went into administration after a stay of execution over Christmas. And private equity firm Rutland Partners pulled the plug on geeky electronics retailer Maplin. Total job losses from both failures amount to something in the region of 5,000 across the whole of the UK. No-one was particularly surprised by the failure of Toys R Us. The company had proved slow to respond to the rise of online shopping and the...

The failure of Carillion has brought to light widespread moral hazard in the outsourcing sector. For years, companies that deliver crucial public services relied on expectation of government support to keep their borrowing costs low and enable them to please shareholders by giving dividends they couldn't afford. They, and the banks and investors that funded them, assumed they were too important to fail. So when Carillion was on the brink of failure, RBS tightened the screws, clearly...

Those excellent researchers at the House of Commons Library have produced a briefing paper on the Carillion collapse. It is clear, succinct and well-researched. And extremely grim.The researchers seem to have gone back through the reports & accounts to about 2009. And they conclude that Carillion was a basket case not just in the last year of its life, but from about 2011 onwards. I've now done the same exercise, and I agree with them. Carillion's cupboards were virtually bare, and the...

"Profits = Investment - Saving"Or, "Profits = Expenditure - Income". Those are just alternative ways of saying the same thing, for a closed economy, if investment and saving include government investment and saving. Most economists will say that's wrong. And it is wrong by standard definitions, where aggregate expenditure and income are the same thing, and investment and saving are also the same thing (for a closed economy, including government investment and saving). But let me tell you...

I would phrase it somewhat differently: "It's the distribution, stupid."The social and political problems arise from grossly asymmetrical distribution and the ensuing distributional effects economically through highly asymmetrical income and wealth.Occasional Links & CommentaryIt’s the profits, stupid!David F. Ruccio | Professor of Economics, University of Notre Dame

The two standard explanations for why labor’s share of output has fallen by 10 percent over the past 30 years are globalization (American workers are losing out to their counterparts in places like China and India) and automation (American workers are losing out to robots). Last year, however, a highly-cited Stigler Center paper by Simcha Barkai offered another explanation: an increase in markups. The capital share of GDP, which includes what companies spend on equipment like robots, is...