Peter Cooper — The Strange Capitalist Embrace of Austerity Viewed in Terms of Marx’s Falling Profit-Rate Law

In this sense, Marx’s profit-rate tendency seems to offer an explanation for the capitalists’ counterproductive resort to austerity. Capitalists want to have their cake and eat it too. They want growth, but only growth that profits them (not growth in not-for-profit activity). They want a higher rate of profit, but they do not want to suffer the collapse in capital values that would deliver a higher rate of profit (for instance, they want to bail out banks rather than let them fail). They oppose growth within a low-profit regime because this implies an economy increasingly dominated by not-for-profit activity.

As for the rest of us, we have no actual need of profit. Nor does it motivate our production. After all, we do not share in profit. Profit, being the result of unpaid labor, is actually a disincentive to productive effort for the vast majority, because it is labor performed for the benefit of a small minority and accumulated into a private stock of wealth, instead of being performed for the benefit of the community as a whole and accumulated into a stock of wealth to be owned in common.

Not-for-profit activity is socialism rather than capitalism, which theoretically is driven by investment based on risk-taking in search of reward.

"Theoretically," because a lot of "capitalism" is based on rent-seeking much of which is made possible through economic policy based on government capture.

Social, political and economic symmetry, which is a necessary condition for perfect competition, is the enemy of monopoly capital, especially in an environment dominated by an oligarchic private sector and government that is chiefly funded by plutocrats.

heteconomist
The Strange Capitalist Embrace of Austerity Viewed in Terms of Marx’s Falling Profit-Rate Law
Peter Cooper