The Cyclical Decline of the Profit Rate as the Cause of Crises in the United States (1947-2011)

Abstract

This work employs the methodology developed by Thomas Weisskopf in the late 1970s to analyze the role of cyclical declines in the profit rate as the cause of crises in the United States during the postwar period, and contrasts the results with Weisskopf’s and other subsequent works he inspired. The generalized idea in the literature that cyclical crises are normally caused by a decline in the profit rate is confronted; the cyclical decline in the profit rate is a plausible cause of six out of ten postwar U.S. cyclical crises, but it is doubtful that this can be postulated as the case in the remaining four. Of these six crises, most of them can be related to the offensive rising strength of the labor variant of crisis. Finally, it is argued that analysis of the profit rate short-term dynamics is insufficient to provide a specific characterization of the neoliberal crises in opposition to the crises of the Keynesian period in the U.S. economy.