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Is There an Allocation Problem?: A Comment on Murray Smith’s Analysis of the Falling Profit Rate

“Is There an Allocation Problem?: A Comment on Murray Smith’s Analysis of the Falling Profit Rate,” [PDF], (co-authored with Michael Dawson, Foster listed first), Science & Society, vol. 58, no. 3 (Fall 1994), pp. 315-24.

In the Fall 1993 issue of Science & Society the editors observed that Murray Smith’s articles on the falling rate of profit, which formed the opening contribution to that issue, constituted an important new study that “should be compared with the work of [Thomas] Weisskopf, [Edward] Wolff and [Fred] Moseley’- all of whom have carried his empirical results not so much with the work of these radical economists (two of whom he never mentioned) as with the traditional thought that he classified as ‘underconsumptionist,” associated with the work of Paul Baran, Paul Sweezy, Joseph Phillips, Harry Magdoff, and the present authors. Indeed, Smith contended that a recent statistical assessment of the economic surplus that we authored (Dawson and foster, 1991; Dawson and Foster 1992) contradicted the main theoretical thrust of the tradition we represent, demonstrating that “the (profitability) crises of the 1970’s and 1980’s cannot be adequately explained on the basis of an underconsumptionist mode of analysis” (Smith, 1993, 282).

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