शनिवार, २२ सप्टेंबर, २०१८

When Marx talks with me....

Marx, yesterday someone asked me one question. I am asking you the same question Do you really think that you are still relevant? 

Why do you think I am not relevant today? Vivek, tell me, is capital still being accumulated? 
Yes… Thomas Piketty found that the rate of return on capital (r) > growth of the economy (g). 
It means capital is still accumulated. 

Figure no. 1 

Above figure shows that the pure rate of return to capital (after tax and capital losses) r is below the growth rate of world output g for the only period of 1913 to 2012. Now r is greater than g. This itself shows that the capitalist can still accumulate the capital as the rate of return on capital is higher than the economic growth. 

Okay what do you think, is profit falling? 
Ummm. This I am not sure but it’s very difficult to comment in one word. Few sectors are experiencing fall in profit and few sectors are growing. But yes if the monopolization of the market is a sign of the falling profit then yes there is a dominance of few firms. There is no perfect competition. Many players have left the market. So I don’t know but I’m a little bit confused. This is hard to quantify right now but I can give you the examples. But no one can reject the presence of the dominant firm but it is very hard to say that the presence of the dominant firm means the declination of profit. But if you assume that the monopolization of the market or moving from the perfectly competitive market to imperfect or monopoly or oligopoly is due to the decline in profit then yes profit is falling. 

Do you see the reserve army of labor? 

Figure no. 2 

Data source – Author has constructed the graph from collecting the data from World Bank. 

Yes... The unemployment is still high. Labor is in the market but outside of the production procedure. Figure no.2 shows the unemployment rate percentage of the total labor force. Unemployment is still high at 7%. This shows that the workers are still out of the production process. 

Figure no.3 

Data source – Author has constructed the graph from collecting the data from World Bank. 

Figure no. 3 shows that there is an informal sector in the economy which is the result of the formal unemployment. This means the workers are outside of the formal production but engaged in the informal production for living purpose. This can be viewed as the consequences of the reserve army. So yes there is a reserve army of labor. 

Okay fine, last question, What do you think about wages (More specifically, about labor exploitation)? 
Noone can ignore the labor exploitation. But how can I quantify that with the statistics? But yes I can show you the data related to the labor wages and profit. In India according to the Centre for Monitoring Indian Economy (CMIE), profits are bigger than wages. 

Figure no.4

Data source – the Centre for Monitoring Indian Economy (CMIE) (MAHESH VYAS14 SEP 2018 04:08 PM, )

Figure no.4 shows that the wages are lower than the profits. This also shows that the profits are falling. But this is only for India. Currently, I can't show you any other data. But yes, you are wages are more or less stagnated and lower than the profit. 

Vivek, in short, you are telling me that I am still relevant... Thank you... 

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