The Profit Rate in Brazil, 1953-2003

Abstract

This paper investigates the profit rate in Brazil between 1953 and 2003. There was a tendency for the profit rate to fall during the period under study determined mainly by the declining productivity of capital. There were three phases in the behavior of the profit rate. In the first phase, between 1953 and 1973, it slowly declined; in the second, from 1973 to late 1980s, it fell sharply; in the third, from late 1989 to 2003, it increased moderately. These phases correspond to the institutional arrangements of the Brazilian economy, respectively, to the import substitution industrialization (ISI) during the golden age of capitalism, to the crisis and rupture of ISI, and to neoliberalism.JEL classification: E25, N16, O30

Profitability in India’s Organized Manufacturing Sector: The Role of Technology, Distribution and Demand

“…For most advanced capitalist countries, the profit share has displayed medium run fluctuations, falling in the regulated capitalist period and rising in the neoliberal period (Basu and Vasudevan, 2013). Even developing countries like Brazil have witnessed a rising profit share only in the neoliberal period, from 1990 to 2003 (Marquetti et al, 2010). Thus, in this respect, the distribution of value added between the fundamental social classes in India's organized manufacturing sector is strikingly different: labour has been continuously losing over the last 3 decades.…”

“…The first will be a long and medium run perspective, where we will abstract from considerations of aggregate demand. This approach has been used to study long run capitalist evolution as also episodes of crises under capitalism (Duménil, et al, 1984;Duménil et al 1985;Michl, 1988;Duménil and Lévy, 1993;Foley and Michl, 1999;Marquetti, et al, 2010;Basu and Vasudevan, 2013). The second will be a short run perspective, where we will allow for the effects of aggregate demand on the rate of profit.…”

“…3 Sau (1989) and Marquetti, Filho, and Lautert (2010) are exceptions in this regard. The former studies profitability trends in a subset of India's organized manufacturing sector and the latter examines the changing trends of profit rate for the whole Brazilian economy.…”

Real wages and labor-saving technical change: evidence from a panel of manufacturing industries in mature and labor-surplus economies

“…But there is evidence of falling capital productivity during several non-fleeting episodes (Foley and Marquetti, 1997;Marquetti, 2003). Examples include the United States during the second half of the 19 th century (Duménil and Lévy, 1995), several advanced economies during the crisis of the so-called golden age of capitalist from the late 1960s through the 1970s (Glyn et al, 1990), and East Asia and Brazil during most of their episodes of industrialization (Young, 1995;Marquetti et al, 2010). 6 The classical assumptions of differential saving propensities, saving-driven investment, and low elasticity of substitution between capital and labor imply that higher capital productivity leads both to faster capital accumulation and to higher labor absorption per unit of capital.…”

The Accumulation of Capital and Economic Growth in Brazil: A Long-Term Perspective (1950–2008)

“…Thus, the rate of accumulation is influenced by fluctuations in the investment effort and relative investment, but structurally, in terms of its long-term trend, it mainly reflects the evolution of the rate of profit, which is explained, in turn, by the productivity of capital (see also Marquetti, Filho and Lautert, 2010).…”