While there have been many capitalistic strides to overcome the profit losses between the 1950s and the 1970s, there’s been a downward effect in households. Dr. Fred Moseley at Mount Holyoke College examines and explains this phenomenon in his article,”The U.S. Economic Crisis: From a Profitability Crisis to an Overindebtedness Crisis,” published in Review of Radical Political Economics.
The abstract:
This paper argues that the fundamental cause of the current economic crisis in the U.S. economy was a significant long-term decline in the rate of profit from the 1950s to the 1970s. Capitalists responded to this profitability crisis by attempting to restore their rate of profit by a variety of strategies, including: wages and benefit cuts, inflation, “speed-up” on the job, and globalization. These strategies have largely restored the rate of
profit, but have resulted in stagnant real wages for workers for decades. As a result, household indebtedness has increased to unprecedented levels and must be substantially reduced in order to make possible a sustainable recovery.
Read the full article here, and don’t forget to sign up for e-alerts to stay up-to-date on the latest from RRPE!
