Manufacturing and global turbulence: Brenner' s misinterpretation of profit rate differentials

Abstract

Robert Brenner's analysis of the structural crisis of the late 20th century, in his Economics of Global Turbulence, is based on the observation of the decline of the profit rate, as is common among Marxist economists. Instead of the usual reference to the features of technical change, Brenner explains the decline of the profit rate in the whole economy by its fall within manufacturing industries, resulting from excess international competition. Brenner's basic insight is based on the observation that, after World War II, in the United States, the profit rate of manufacturing industries was larger than in other U.S. industries, and declined considerably more. This observation follows from a misinterpretation of profit rate differentials. Actually, the profit rate of manufacturing industries was not significantly different from that of most other industries, with the exception of a group of very capital intensive industries such as railroads, which accounts for only 13 percent of total output. This difference, which remains to be explained, has nothing to do with international competition.