Some Questions on the Rates of Profit and Rents

Melendez-Plumed, Vicenc (2014): Some Questions on the Rates of Profit and Rents.

Abstract

We deal with three subjects, namely, the presence of more than one rate of profit in an economy due to the existence of rents (absolute and monopoly rents); the subordination of the prices and the rate of profit (in price terms) to the real profit or net product, measured in value terms; and the impact of leveraging on the rate of profit and on a simple calculation of the sum of credit (money) generated in an economy over a given period of time. Production prices are affected by absolute and monopoly rents. An arbitrary rise of an industry rate of profit increases the global rate and system prices while the real product expressed in values is not altered. Labour magnitudes determine the sustainable price system. An increase in the quantity of credit is a natural consequence of economic growth and the rate depends on the proportions of the effective use and the production of commodities. Interests of credits have similarities with differential rent, provided that the production costs increase depressing the rate of profit and generating a “rent” to capitalists who do not need to borrow money.

• Item Type: MPRA Paper
• Language: English
• Keywords: Labour values; Relative prices;Rates of profit;Credit; Rate of suplus value;Absolute rent; Differential rent; Monopoly rent
• Subjects: B - History of Economic Thought, Methodology, and Heterodox Approaches > B5 - Current Heterodox Approaches > B51 - Socialist ; Marxian ; Sraffian

References

Dallemagne, Jean-luc. La Inflación Capitalista. A. Redondo Editor: Barcelona , 1972, 334 pp

Fröhlich, Nils. Labour values, prices of production and the missing equalization of profit rates: Evidence from the German economy. Chemnitz University of Technology, Department of Economics, Thüringer Weg 7, 09107 Chemnitz, Germany. November 30, 2010. http://www.tu-chemnitz.de/wirtschaft/vwl2/downloads/paper/froehlich/deviation.pdf

Keen, Steve. Economics in the age of deleveraging. 2012/01/20. http://www.debtdeflation.com/blogs/2012/01/28/economics-in-the-age-of-deleveraging/

Keen, Steve. Instability in Financial Markets: Sources and Remedies. Ineteconomics. Berlin. April 12-14, 2012. http://ineteconomics.org/sites/inet.civicactions.net/files/keen-steve-berlin-paper.pdf

Marx, Karl. Capital Vol. III Part VI, Transformation of surplus-Profit into Ground Rent. http://www.marxists.org/archive/marx/works/1894-c3/ch45.htm

Meléndez-Plumed, Vicenc. Annex to “Connecting labour values and relative prices. New explanatory graphic". MPRA Paper 40969, University Library of Munich, Germany, 2012. http://ideas.repec.org/p/pra/mprapa/40969.html

Meléndez-Plumed, Vicenc. Connecting labour values and relative prices. MPRA Paper 18017, University Library of Munich, Germany, 2009. http://ideas.repec.org/p/pra/mprapa/18017.html

Meléndez, Vicenç. Relaciones entre Magnitudes en Trabajo y Magnitudes Monetarias. IWGVT. 1999. http://www.valuetheory.org/files/9-melendez.rtf

Sraffa, Piero. Producción de Mercancías por Medio de Mercancías, Oikos-Tau Editores, 1975, isbn:84-281-0030-6.

Vegara, Josep Maria. Economía Política y Modelos Multisectoriales, Tecnos, 1979, isbn: 84-309-0795-5.