If Roberts thesis were correct then the fall in the rate of profit, resulting from The Law of the Tendency for the Rate of Profit to Fall should have been smaller in the period 1960-1980, when new technological developments played a small role, than it was in the period 1980-2019, which was a period of rapid technological development, including not just the introduction of the microchip, personal computers, the Internet and so on, but associated developments in a range of areas from bio-sciences to space technology. Yet, Roberts on the basis of his own data, arrives at the opposite conclusion, thereby, falsifying his own thesis! That is even before we consider whether the rate of profit actually did fall during the 1980's and 90's or not, or whether its valid to take a 20 year period from 1960-1980, and compare it with a 40 year period from 1980 to 2019!
But, what is also significant is whether the conclusions that Roberts draws from his thesis are useful also, because, there is little point in identifying that “there has been a secular decline in the world rate of profit over the last 80 years of -25%”, unless this has some practical relevance for analysis. Roberts states,
“So Marx’s law is emphatically vindicated empirically at a world level... starting with the huge profitability crisis from 1966, leading to the major global slump of 1980-82. That was followed by the so-called ‘neoliberal’ revival in profitability up to 1996 (+11%).”
But, as stated above, he fails to analyse whether the fall in the rate of profit during these different periods was a consequence of The Law of the Tendency for the Rate of Profit to Fall, or a change in the value composition of capital, which is a fundamental requirement for a Marxist analysis, such as that undertaken by Marx in Theories of Surplus Value. Indeed, if we use Roberts argument, then what are we to conclude from the fact that, on this data, the rate of profit rose between 1982-96? We would have to conclude that during this 14 year period the technical/organic composition of capital actually fell, i.e. that it fell during one of the most dynamic periods of technological innovation seen in modern times, when we saw the microchip used as the basis of technologies that brought massive changes in production and productivity, from the car industry to the printing industry and beyond!!! Roberts' thesis does not stand up to even the most basic comparison against observable reality.
His conclusions, however, are fully consistent with Marx's observation of Ricardo's calculations of the rate of profit, which were, like Roberts', based upon an acceptance of Say's Law, and Smith's absurd dogma that the value of total output resolves completely into revenues. That is it is a measurement of the rate of surplus value, not the rate of profit. In the 1960's and 70's wage share rose, and the profit share was squeezed, as the rate of surplus value fell. In the 1980's and 90's, as new technologies were introduced, a relative surplus population was created, and the value of labour-power fell, causing wage share to fall, and profit share to rise. The rate of surplus value rose, and as productivity rose, causing the rate of turnover to rise, the annual rate of surplus value rose even more.
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