conform or challenge adjustment strategies of sanction torn companies the literature on sanctions often neglects the role of domestic firms in sender states although sanctions only have a real economic effect when senders firms reduce their activities on the target s market in contrast sanctions avoidance and increasing investments in the target country the observed behaviour of many companies facing the eu sanctions against russia imposed in 2014 mitigate the impact of these restrictive measures while sanctions increase the political risk for companies they also offer economic opportunities and previous studies could not settle the debate on which factor prevails by evaluating responses from british french german italian and polish enterprises to an online survey distributed in 2017 we analyse at the firm level how sanction torn companies adjust to new political orders and what drives their strategic decisions we find evidence that resource dependency induces strategies that challenge sanction policies in particular non fungible assets in the target country incentivise companies to further increase their engagement these defiance strategies diminish the real economic effect of sanctions and generate a new economic equilibrium which has negative long term implications on the choice set of policymakers to further pursue the imposition of sanctions and which even outlasts the lifting of these restrictive measures

a new theoretical analysis of deindustrialisation the analysis of deindustrialisation has been led by heterodox economists especially those in the structuralist and kaldorian traditions based on a conception of sectoral specificity and the role of manufacturing in growth sectors are not the units of marxian economic analysis but thinking through the meaning of sectors in marxian terms allows for an analysis of the meaning and implications of a change in sectoral structure deindustrialisation is the sectoral shift that has been most prominent in recent decades and which is likely to have significant implications for the future of capitalism this article develops an original marxian theorisation of deindustrialisation this conceptualisation includes a distinction between two forms of deindustrialisation as well as taking into account changes in sectoral structure the proposed typology considers whether such changes are associated with a shift between those activities that produce surplus value and those that do not or only a shift in the composition of surplus value producing activities the distinction between different forms of deindustrialisation allows for an arguably richer analysis of this phenomenon than in more narrowly sector based approaches

growth accumulation and unproductive activity an analysis of the postwar u s economy preface 1 introduction 2 unproductive activity in a capitalist society 3 a marxian accounting framework 4 a growth model of accumulation and unproductive labor 5 rise of unproductive activity in postwar economy 6 absorption of labor and capital and rate of surplus value 7 absorption of new resources and growth in real income 8 conclusions and speculations appendix data sources and methods references index

the autonomisation of abstract wealth new insights on the labour theory of value we theorise the forms of value in the marxist system in a way that challenges the dominant tradition the standard procedure has been to read marx s capital as an analysis that begins at a high level of abstraction and moves towards more concrete concepts our alternative approach posits that the forms of value in the marxist system evolve from more concrete towards more abstract forms of wealth that increasingly separate from and obscure labour exploitation our procedure therefore replaces the dominant interpretation of successive approximations employed by most scholars we develop a broader account of marx s project alongside textual evidence retrieved from many of his writings we also provide a new way to incorporate the monetary financial and rentier forms of wealth into marx s labour value theory the proposed alternative approach can potentially open a research agenda on the contemporaneous dynamics of abstract and concrete forms of wealth in advanced capitalism

war of attrition evidence from a laboratory experiment on market exit i introduction young industries often undergo a process of shakeout gort and klepper 1982 and klepper 1996 attracting excess firms and gradually shedding them over time more mature industries are likewise often forced to contract in the face of recession or product specific negative demand shocks when an overcrowded industry is forced to shrink which firms exit and which ones survive the conventional answer in economics is that overcrowded industries tend to shed inefficient firms and retain efficient ones we might call this survival of the most efficient a process analogous to natural selection that can adaptively improve the efficiency of industries over time nelson and winter 1982 fudenberg and tirole 1986 model firms exit decisions in overcrowded duopoly markets as wars of attrition and show that the intuition of survival of the most efficient has merit even if firms have little information regarding their costs relative to their competitors however the equilibrium of their game is complex involving a solution to a system of differential equations since neither fortune 500 chief executive officers in the naturally occurring markets nor undergraduate participants in laboratory markets deliberately solve differential equations when deciding whether or not to exit a declining market it is an open question as to how well fudenberg and tirole s rational reconstruction of the exit decision corresponds to the facts of how people make such decisions we report the results of a laboratory experiment designed to answer this question nearly 200 subjects in 16 sessions participated in a total of 3 800 wars of attrition based on fudenberg and tirole s model at the beginning of each period subjects were randomly paired and given a private cost draw that usually induced negative net per second payoffs in a shared market and positive net payoffs per second in monopoly subjects then decided in real time whether and when to exit the market never to return monotonic equilibrium strategy functions predict higher cost inefficient participant exit at an earlier time than their lower cost competitor that is the relatively efficient competitor survives in the market we find that fudenberg and tirole s model organizes our data surprisingly well especially considering its complexity we observe exit by the higher cost firm in 76 of cases when differences between the costs faced by firms are substantial the rate of efficient exit rises to nearly 100 the data on exit times are likewise quite close to the point predictions particularly in the crucial higher portion of the cost distribution that generally governs exit times the median deviation from equilibrium exit times falls to zero by the end and on average subjects earn payouts identical to those predicted in equilibrium our design permits tests of two other conjectures in fudenberg and tirole first our data supports fudenberg and tirole s core comparative static prediction that a decrease in the ex ante likelihood of actually being in a war of attrition leads to an increase in the speed of exit 1 second half of our sessions use costs framed as fixed costs suffered while in the market and half use costs framed as opportunity costs earned by exiting the market there is no evidence that this treatment variable affects exit behavior this isomorphism between gains and losses predicted by standard theory stands in stark contrast to evidence from previous individual decision making experiments suggesting asymmetries in how people react to potential losses and potential gains although wars of attrition have an important place in the game theoretic literature there are surprisingly few experimental studies directly relating to them 2 3 bilodeau childs and mestelman 2004 study a three player full information war of attrition framed as a volunteer game and report widespread failure of equilibrium predictions the predicted volunteer in a subgame perfect nash equilibrium only volunteers 41 of the time

conflict cooperation and commerce the effect of international political interactions on bilateral trade flows the public choice approach to political economy is employed to gain insight into the connection between international politics and trade flows a model is constructed in which importers are assumed to be rational utility maximizers who seek to satisfy international security as well as economic welfare objectives this model of bilateral trade flows reflects contemporary theory in the field of international economics and it explicitly incorporates the general foreign policy orientation of importers among its determinants the model is tested in 16 annual crosssectional estimations 1960 75 for a complete network of 25 countries the findings show considerable support for the hypothesis that trade flows are significantly influenced by broad political relations of amity and enmity between nations the author concludes that nations adjust trade ties to satisfy security as well as economic welfare goals and that a formal political economy of trade should reflect this fact

predicting how people play games a simple dynamic model of choice we use the simple dynamic model developed in sarin and vahid 1999 games and economic behavior 28 294 309 to explain the experiments reported in erev and roth 1998 american economic review 88 848 881 in an earlier paper sarin and vahid 1998 mimeo texas a m university and monash university we showed that the model predicted behavior in repeated coordination games remarkably well and better than equilibrium theory or reinforcement learning models in this paper we show that the same one parameter model can also explain behavior in games with a unique mixed strategy nash equilibrium better than alternative models hence we obtain further support for the simple dynamic model journal of economic literature classification numbers c7 d8

the role of intangible assets in explaining the investment profit puzzle starting around the early 2000s and especially after the 2008 crisis the rate of capital accumulation for us nonfinancial corporations has slowed down despite relatively high profitability indicating a weakening of the link between profitability and investment while the literature mostly focuses on financialisation and globalisation as the reasons behind this slowdown i suggest adding another layer to these explanations and argue that in conjunction with financialisation and globalisation we need to pay attention to the increased use of intangible assets by nonfinancial corporations in the last two decades intangibles such as brand names trademarks patents and copyrights play a role in the widening of the profit investment gap as the use of these assets enables firms to increase market power and profitability without necessarily generating a corresponding increase in fixed capital investment after discussing the ways nonfinancial corporations use intangible assets i look at large corporations in the usa and find the following i the ratio of intangible assets to the capital stock increased in general this increase is highest for firms in high technology healthcare nondurables and telecommunications ii industries with higher intangible asset ratios have lower investment to profit ratios iii industries with higher intangible asset ratios have higher markups and profitability iv the composition of the nonfinancial corporate sector has changed and the weight of high technology and healthcare firms has increased but this increase did not correspond to an equal increase in their investment share the decline in the investment share of durables nondurables and machinery is matched by an increase in the investment share of location specific industries with low intangible asset use most notably firms in energy extraction in general these firms have steadier markups and higher investment to profit ratios v yet intangible intensive industries profitability has increased faster than their share of investment or total assets all in all these findings are in line with the suggestion that the increased use of intangible assets enables firms to have high profitability without a corresponding increase in investment

u s policy toward foreign direct investment foreign investment policy is an increasingly important part of overall foreign policy the authors investigate the substance of u s outgoing foreign direct investment ofdi and incoming foreign direct investment ifdi policy in terms of a small set of policy values and process factors the policy values are domestic prosperity national autonomy and national security the process factors are ideological consonance impact transparency the diffusion and concentration of perceived costs and benefits and the political capacity of groups and institutions these considerations illuminate the relative stability in both areas of policy since world war ii and help to explain the changes that did take place the paper concludes with a forecast that despite the oft heard prediction that economic nationalism is on the increase u s policies toward foreign investment will remain much the same during the eighties as they have been since world war ii

financial globalisation and crisis institutional transformation and equity this paper comprises the long introduction to the symposium of five papers on financial globalisation published in the cambridge journal of economics volume 34 no 2 the paper discusses the impact of financial globalisation in a variety of spheres and shows how the five papers link together to provide a coherent view of the current economic and financial crisis in this paper we also examine the globalisation of finance more broadly both in historical terms as well as in relation to the current widespread failure in the financial markets we take up the policy question of how the interests of the poor in particular and developing countries in general could be safeguarded from the vagaries of financial globalisation questioning how much choice communities and countries have and what can the international community do to extend these choices

distributive shares in the us economy 1964 2001 specifying the labour theory of value in a way that distinguishes both productive from unproductive labour and production workers from supervisory workers this paper considers distributive shares in the us economy between 1964 and 2001 trends in productive and unproductive labour are explored in full time equivalents hours and money after 1979 there was a large shift of money value not matched by a shift in either hours or employment from the wages paid to productive labour to those paid to supervisory labour since the wage share in money value added of non supervisory labour in unproductive sectors was approximately constant the 1980s and 1990s also saw the profits share squeezed by the rising wage share of supervisory workers some implications of this are explored in the construction of a class rather than a factor approach to distributive shares

financialization and u s income inequality 1970 2008 focusing on u s nonfinance industries we examine the connection between financialization and rising income inequality we argue that the increasing reliance on earnings realized through financial channels decoupled the generation of surplus from production strengthening owners and elite workers negotiating power relative to other workers the result was an incremental exclusion of the general workforce from revenue generating and compensation setting processes using time series cross section data at the industry level we find that increasing dependence on financial income in the long run is associated with reducing labor s share of income increasing top executives share of compensation and increasing earnings dispersion among workers net of conventional explanations such as deunionization globalization technological change and capital investment the effects of financialization on all three dimensions of income inequality are substantial our counterfactual analysis suggests that financial

horizontal product differentiation in auctions and multilateral negotiations we experimentally compare first price auctions and multilateral negotiations after introducing horizontal product differentiation into a standard procurement setting both institutions yield identical surplus for the buyer a difference from prior findings with homogeneous products that results from differentiation s influence on sellers pricing behaviour the data are consistent with this finding being driven by concessions from low cost sellers in response to differentiation reducing their likelihood of being the buyer s surplus maximizing trading partner further analysis shows that introducing product differentiation increases the intensity of price competition among sellers which contrasts with the conventional wisdom that product differentiation softens competition

experimental economics accounting and society in memory of john dickhaut abstract this volume consists of papers presented at a conference in memory of john dickhaut the conference sponsored by the economic science institute at chapman university focused on four areas of john s research interests during his career accounting and society methodology in experimental economics neural economics and trust and reciprocity all of the papers make novel interesting contributions to the study of human behavior in economic institutions and should interest readers in a range of fields including accounting anthropology economics finance neurology and psychology

financialisation and capital accumulation in the non financial corporate sector a theoretical and empirical investigation on the us economy 1973 2003 recent research has explored the growing financialization process in the u s and other advanced economies the term is a catch all phrase used to denote important changes in the structure of non financial corporations balance sheets including the growth of income from financial subsidiaries and investment as well as growth in the transfer of earnings to financial markets in the forms of interest payments dividend payments and stock buybacks this paper seeks to empirically explore the relationship between financialization in the u s economy and real investment at the firm level using data from a sample of non financial corporations from 1973 to 2003 i find a negative relationship between real investment and financialization first increased financial investment and increased financial profit opportunities may have crowded out real investment by changing the incentives of firm managers and directing funds away from real investment second increased payments to the financial markets may have impeded real investment by decreasing available internal funds shortening the planning horizons of the firm management and increasing uncertainty these two channels can help explain the negative relationship i find between investment and financialization

a payoff uncertainty explanation of results in experimental centipede games abstract this paper investigates how well a simple two sided incomplete information game with a full support prior can be used to explain non nash equilibrium outcomes observed in the centipede game experiments i estimate the variance of the uncertainty about preferences in several versions of the model select two models and compare these models to the estimation results of the altruism model and the quantal response models it is shown that the two selected models have a better fit than the one parameter altruism and quantal response models and that the estimated variance can explain all qualitative features of these experimental results journal of economic literature classification numbers c72 c19 c 44 c91

directly unproductive profit seeking dup activities this paper propses directly unproductive profit seeking dup activities as a general concept that embraces a wide range of recently analyzed economic activities including the subset of rent seeking activities considered by krueger it then proceeds to provide a synthesis and generalization of the welfare theoretic analysis of such activities by developing a fourfold categorization of cases depending on the levels of distortions before and after the dup activity thus a unification and overview of the subject are achieved

on measuring the wealth of nations the us economy 1964 2001 this paper examines the methodology of shaikh and tonak measuring the wealth of nations 1994 underlying their calculation of estimates of productive labour in the us economy from 1964 to 2001 the focus is not on the results but on the methods that generate them the paper finds that the compromises made by shaikh and tonak because of data unavailability are unreliable and that better approximations are possible on this latter basis the shaikh and tonak methodology can be used to provide the labour and wage estimates needed for empirical investigations in the surplus based tradition copyright 2005 oxford university press

equilibrium play and adaptive learning in a three person centipede game the two person centipede game is one of the most celebrated paradoxes of backward induction in complete information extensive form games an experimental investigation of a three person centipede game shows that the paradoxical results are strongly affected by the size of the stakes when the number of players in the game is increased from two to three and the game is played for unusually high stakes with group composition being randomly changed from trial to trial the paradox is considerably weakened as players approach equilibrium play with multiple iterations of the stage game when the game is played with low stakes there is no evidence for equilibrium play or learning across iterations of the stage game an adaptive learning model that assumes updating of the individual probabilities of choice outperforms alternative static and dynamic models in accounting for the major results observed in the high stake experiment

reversal of fortunes democratic institutions and foreign direct investment inflows to developing countries does increased democracy promote or jeopardize foreign direct investment fdi inflows to less developed countries we argue that democratic institutions have conflicting effects on fdi inflows on the one hand democratic institutions hinder fdi inflows by limiting the oligopolistic or monopolistic behaviors of multinational enterprises facilitating indigenous businesses pursuit of protection from foreign capital and constraining host governments ability to offer generous financial and fiscal incentives to foreign investors on the other hand democratic institutions promote fdi inflows because they tend to ensure more credible property rights protection reducing risks and transaction costs for foreign investors hence the net effect of democracy on fdi inflows is contingent on the relative strength of these two competing forces our argument reconciles conflicting theoretical expectations in the existing literature empirical analyses of fifty three developing countries from 1982 to 1995 substantiate our claims we find that both property rights protection and democracy related property rights protection encourage fdi inflows after controlling for their positive effect through property rights protection democratic institutions reduce fdi inflows these results are robust against alternative model specifications statistical estimators and variable measurements

how many hands to make sanctions work comparing eu and us sanctioning efforts abstract one of the core disputes in the literature on economic statecraft addresses the conditions under which multilateral sanctions are more successful than unilateral ones our game theoretic model implies that extant assessments do not sufficiently differentiate between the varying abilities of multilateral and unilateral senders in credibly threatening and carrying out sanctions we introduce a selection argument that focuses on the complex decision making process of the european union eu to impose sanctions in comparison to the united states us the institutional structure of the eu and conflicting economic interests of multiple principals make the imposition of sanctions much more difficult in addition the international organization is less accountable vis a vis the voters both mechanisms render sanction threats by the eu less credible since the united states as a unilateral sender can issue more credible sanction threats imposed us sanctions are a negative selection of cases and thus less successful than restrictive measures imposed by the eu we test these propositions with a new dataset on threatened and imposed sanctions by the european union and the united states for the period between 1989 and 2015 the empirical evidence demonstrates that eu sanctions are indeed more successful than those by the us in contrast us sanction threats are more successful than those by the eu we provide evidence for the difficulties of multilateral senders to impose sanctions by showing that eu sanctions are both less likely and less severe the more varied the economic links of the multilateral sender with the sanctioned state are

controlling preferences for lotteries on units of experimental exchange in an experimental setting when outcomes are stochastically related to actions predictions of equilibrium behavior depend not only on the participants preference orderings of outcomes but also on their orderings of lotteries on outcomes as well we introduce and test a reward structure that can be utilized in any experimental setting to allow the experimenter to decree beforehand the subjects preferences for lotteries on experimental outcomes we show analytically that the proposed reward structure can induce subjects to behave as if they have the decreed preference function defined on experimental outcomes empirical tests using two different choice settings provide evidence to support this ability to control preferences

when are sanctions effective a bargaining and enforcement framework although a considerable literature identifies the conditions under which sanctions are more likely to be successful few studies examine the question of when sanctioning states or senders are willing to enforce their sanctions laws against their firms using a game theoretic model we argue that imposing sanctions creates a strategic dilemma for senders we demonstrate that senders often have disincentives to enforce their sanctions policies given that the restriction on economic transactions with targeted states may undermine their firms competitiveness the model indicates that sanctions are more likely to succeed when the sender s firm retains a moderate share of the target s market relative to its foreign competitors however the model also demonstrates that sanctions are likely to be imposed only when the conditions do not favor their success the empirical implications of the model are tested using the threat and imposition of economic sanctions ties data set

games of perfect information predatory pricing and the chain store paradox the thesis of this paper is that finite noncooperative games possessing both complete and perfect information ought to be treated like one player decision problems that is players ought to assign at every move subjective probabilities to every subsequent choice in the game and ought to make decisions via backward induction this view is in contrast with the gametheoretic approach of nash equilibrium after expanding on this view for games in the abstract in sections 2 and 3 attention is turned in section 4 to an example due to reinhard selten called the chain store paradox which possesses the flavor of a situation involving a predatory pricing monopolist it is argued that for the chain store game the decision analytic approach leads under certain assumptions to more realistic outcomes than the standard nash equilibrium approach

money in contemporary capitalism and the autonomisation of capitalist forms in marx s theory if we adopt a dialectical reading of marx s theory of money we can see that money contains within it the contradiction of commodity itself between use value and value and in so doing it contains different strata of contradiction that logically and historically have come to the fore in this process the capitalist forms e g money means of circulation inconvertible money seem to be stronger than their counterparts social forms and because of this there is a movement towards an autonomisation of these forms this article aims to show that these movements may be behind some of the contemporary phenomena we are currently observing in the circulation of capital recent literature dealing with these themes will also be discussed

risk aversion and incentive effects comment charles a holt and susan k laury 2002 develop an experimental design to determine the risk attitude of an individual they use their observations to argue that increased incentives appear to change risk attitudes leading to greater risk aversion popular utility functions that do not allow for such effects are therefore misspecified building on this finding they estimate a flexible utility function that characterizes their aggregate data well but that does not assume constant absolute or relative risk aversion the basic holt and laury 2002 hl design should become an important tool for the interpretation and design of experiments in which risk attitudes could play a role however their most important result showing the effect of scaling up the stakes of the lottery choice task is confounded by a possible order effect an order effect occurs when prior experience with one task affects behavior in a subsequent task the primary methodological contribution of experiments in economics is to enhance control ideally such control makes the explanatory variables of interest in this case scale orthogonal to other explanatory variables such as order allowing clearer inferences about behavior than one could get from field econometric data we argue that not controlling for order effects results in a misspecification of utility functions that is as important as that of scale the subjects in the hl design were given sequences of three or four tasks as shown in table 1 task 1 involved choices over lotteries with a baseline level of prizes which we will refer to as the 1 scale task 2 involved hypothetical choices over prizes with a scaled up level of prizes either 20 50 or 90 task 3 repeated task 2 but with choices that involved real payoffs task 4 was a return to the baseline task with real 1 prizes in some sessions subjects were not given task 2 or task 3 what could one infer from the comparison of measured risk attitudes in the 1 and 20 tasks in hl unfortunately any observed difference could be due either to the scale of the prizes involved or the task order or some combination of both thus the effect of scale is intrinsically confounded with the possible effect of task order this is a logical flaw in their design which

on the centipede game abstract in rosenthal s centipede game if at the start of play it is commonly known that the players will choose rationally at vertices that are actually reached then the backward induction outcome results that is the first player goes out at the first move journal of economic literatureclassification numbers c72 c73 d82

state owned mncs and host country expropriation risk the role of home state soft power and economic gunboat diplomacy expropriation risk has a binding effect on foreign direct investment fdi however state owned multinational corporations may counter the monopoly power of the host state by leveraging the political influence of their home government the magnitude of this counter force we argue may vary depending on the strength of political relations between the home and host state and the level of economic dependence of the host country on the home market we find supporting evidence of our hypotheses using chinese firm level fdi information between 2003 and 2010

deal or no deal decision making under risk in a large payoff game show we examine the risky choices of contestants in the popular tv game show deal or no deal and related classroom experiments contrary to the traditional view of expected utility theory the choices can be explained in large part by previous outcomes experienced during the game risk aversion decreases after earlier expectations have been shattered by unfavorable outcomes or surpassed by favorable outcomes our results point to reference dependent choice theories such as prospect theory and suggest that path dependence is relevant even when the choice problems are simple and well defined and when large real monetary amounts are at stake

high stakes behavior with low payoffs inducing preferences with holt laury gambles abstract kahneman and tversky 1979 argued that risky decisions in high stakes environments can be informed using questionnaires with hypothetical choices yet results by holt and laury 2002 suggest that questionnaire responses and decisions in hypothetical and low monetary payoff environments do not well predict decisions in higher monetary payoff environments this raises the question of whether investigating decision making in high stakes environments requires using high stakes here we show that one can induce preferences using the binary lottery reward technique e g berg et al 1986 in order to study high stakes decision making using low stakes in particular we induce preferences such that decisions in a low stakes environment reflect well the choices made in the high stakes environment of holt and laury 2002 this finding is of interest to anyone interested in studying high stakes decision behavior without paying high stakes

the effect of sanctions on u s foreign direct investment for years the united states has imposed economic sanctions to com pel countries to alter their behavior an important concern is whether government sanctions influence private foreign direct investment fdi decisions the largest source of foreign capital in the first study to assess empirically the relationship between economic sanctions and fdi we consider whether u s sanctions influence u s fdi inflows into targeted countries using panel data for 171 countries from 1965 to 2000 we find strong evidence that u s investors pull out of countries targeted for u s sanctions prior to their imposition this disinvestment is not permanent and invest ment tends to return after the sanctions are imposed the results provide support for fdi studies that show the effect of risk on investor decision making the use of economic sanctions by the united states to compel countries to alter their behavior has increased in recent years at the same time u s foreign direct investment fdi has expanded with u s multinational corporations mncs rep resenting the largest share of global fdi despite the growth of u s fdi and the u s government s imposition of sanctions no empirical work has considered the relationship between sanctions and u s investor decisions how do u s mncs react to the use of u s sanctions and does u s fdi make sanctions more or less effective in this article we analyze the impact of u s sanctions on investment decisions made by u s mncs building on investors risk calculations that are critical to the fdi literature 1 we propose several reasons why risk linked to economic sanctions influences fdi flows we hypothesize that u s firms significantly draw down their investment in tar geted countries prior to the imposition of sanctions as risk levels are most height ened however after sanctions have been in place long enough for investors to understand their specific restrictions uncertainty surrounding the amount of risk decreases and u s fdi is expected to return to levels near the pre sanction period

the rate of surplus value in the postwar us economy a critique of weisskopf s estimates the rate of surplus value is one of the three key variables in marx s theory of capitalist crises along with the rate of profit and the composition of capital marx expected a secular tendency for the rate of surplus value to increase owing to the rise in labour productivity under capitalism in marx s theory the necessary condition for an increase in the rate of surplus value is that the productivity of labour increases faster than the average real wage marx argued that in general this condition would be fulfilled because of downward pressure on wages exerted by a large and growing reserve army of unem ployed workers marx 1977 chs 17 and 25 moseley 1982 ch 4 marx argued further that this increase in the rate of surplus value would delay but not prevent the tendency of the rate of profit to fall owing to a rise in the composition of capital marx 1982 part 3 weisskopf 1979 argued that the profit share of total income is a reasonable proxy for marx s concept of the rate of surplus value p 343 he estimated the profit share in the non financial corporate business nfcb sector of the us economy over the period 1949 1975 1 showing a secular decline of 28 over the period of study p 351 table 2 contrary to marx s expectation of a secular increase in the rate of surplus value 2 however there is a fundamental theoretical problem with weisskopf s estimates namely that they do not take into account marx s distinction between productive labour and unproductive labour a number of authors have argued that marx s distinction between productive labour and unproductive labour is an integral part of his theory of value and surplus value and that his concepts of surplus value and variable capital the

unproductive accumulation in the usa a new analytical framework in this paper i offer an innovative analysis of unproductive accumulation in the united states economy from 1947 to 2011 i develop a new theoretical and empirical framework to analyze the accumulation of capital in its productive and unproductive forms i also develop a methodology to compute marxist categories predicated on the idea that the production of knowledge and information is an unproductive activity that relies on the creation of knowledge rents in particular i provide new empirical estimates to uncover the shifting balance between productive and unproductive forms of accumulation the accumulation pattern observed during the 1947 1979 phase that prioritized productive accumulation gave way after the 1980s to a contrasting pattern prioritizing unproductive accumulation unproductive activity has been growing at a fast pace in terms of incomes fixed assets and employment among all forms of unproductive activity my approach places special attention on how the production of knowledge and information has constituted a rising share of total unproductive income and capital stock additionally productive stagnation and rapid unproductive accumulation have been related to greater exploitation of productive workers and to widening income inequality