ANOTHER ATTEMPT TO DISCREDIT THE TENDENCY FOR THE RATE OF PROFIT TO FALL (TRPF). This time by the Jacobin Magazine.
September 19, 2023 3 Comments
Given the long term decline in the rate of profit, now resumed since the Covid uplift, a number of articles have claimed that this decline is a mirage generated by the incorrect treatment of fixed capital. Michael Roberts informed me of this article and I volunteered to help rebut it. Michael Roberts’ reply will be published in the Jacobin journal shortly. This article compliments it by focusing more on defending the tendency for the rate of profit to fall based on what influences prices and profits. Like Jefferies before him,
Ackerman too uses depreciation to discredit the tendency for the rate of profit to fall and like Jefferies he too is guilty of a simple error.
THEPLANNINGMOTIVE.COM 
Would not a change of the depreciation regime also change net profits (gross profits minus depreciation)? I think one should take this also into account.
Yes it would. Using pre-tax profits or the enterprise rate of profit, would actually show a falling rate of profit in both cases.
There are some interesting statistics in that article. The “depreciation factor”, which Ackerman defines as the ratio between investment and “measured capital stock”, falls. But this ratio is the rate of accumulation. Such a falling rate indicates stagnation. – Second: Ackerman’s “undeprecieated profit rate” – ratio btw. annual profit and annual investment – rises. The inverse of that is investment as a share of profits. This inverse declines. Less and less is invested out of profits. Another indicator for stagnation tendencies.