Capital accumulation and its analysis

The rhythms of capital accumulation in the US economy since World War II are briefly sketched, prior to the introduction of the general outline.

Accumulation and growth rates: profiles

The field of analysis is the US Nonfinancial corporate sector (NFC sector). It is the main sector at the origin of firms’ investment in fixed capital. The variables in Figure 1.1 are the growth rates of the stock of fixed capital and the gross value added (GVA) in the sector. The GVA is as in the national income and product accounts (NIPA). The stock of fixed capital is from the Bureau of Economic Analysis (BEA) after the adjustment described in Section 4. This figure separates between periods of steady course of outputs or “gravitations” (denoted by continuous or dashed lines) and periods of perturbation combining recessions and recoveries (denoted by dotted lines). Averages values during gravitations are singled out by horizontal segments. [1]

The growth rates of the stock of fixed capital and output

Figure 1.1 The growth rates of the stock of fixed capital and output (gross value added) in the Nonfinancial corporate sector, 1962-2019 (percentages). In the course of fluctuations, we distinguish between periods of gravitation (steady courses of output) and perturbation (recessions and recoveries). The variables during gravitation are identified by continuous lines for the growth rate of fixed capital, and dashed fine for the growth rate of output. The horizontal dotted lines denote average values during gravitations. This figure abstracts from the 1950s, the period of stop-and-go. Sources: The stock of fixed capital is our own estimate based on BEA data. The gross value added is from NIPA, Table 1.14.

  • 2 Gravitations. During gravitations, the two growth rates are still correlated, but the growth rate of the stock of fixed capital is almost constant in comparison with the growth rate of the GVA, manifesting wider short-term ups and downs.
  • 3 Perturbations. Large fluctuations are observed during perturbations, broader in the growth rate of the GVA.

Accounting for complexes of reciprocal interactions: outline

Section 2 compares the postwar compromise, from the 1950s to the 1980s, and neoliberalism, since the 1980s, as the two latter social orders in managerial capitalism, in two respects: (i) exploitation, as the capability to extract a surplus from popular classes, actually, the extraction of surplus labor; and (ii) the comparative trends of accumulation and consumption. (In the present study, exploitation is always restricted to the appropriation of surplus labor as fueling the income of upper classes.) Section 3 analyses the broad fluctuations observed in the channels of funding of

accumulation by either firms’ retained profits or borrowing. There is an important policy aspect in these mechanisms, and the link is specifically established with macroeconomics. Section 4 deals with the breaks - actual steps down - observed in the course of accumulation during recessions; these breaks have important consequences regarding the estimates of the stock of fixed capital and capacity utilization rates. Section 5 examines the historical trends of accumulation in an even longer perspective, beginning during the late 19th century. Basic traits of Marx’s theoretical framework are vindicated, but the rise of managerial capitalism temporarily reversed historical trends during the first half of the 20th century and the 1990s.

  • [1] Historical trends. In the assessment of historical trends since World War II, the averages during gravitations are the relevant observations: they movein tandem for capital stocks and the GVA, with limited discrepancies.
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