The Great Recession: a profitability crisis.

 By G.Carchedi

(1) Crisis years

(2) Negative % change in new value in crisis year(s)

(3) % Rise in OCC from pre-crisis to crisis years

(4) % Fall in ARP from pre-crisis to crisis year

(5) % Fall in employment from pre-crisis to crisis year(s)

1949 -7.24 1948(1.02)1949(1.12)

1948: 17.31949: 13.0

1948 (-0.8)1949 (-6.8)

1954 -5.13 1953(0.97)1954(1.08)

1953: 13.71954: 12.4

1952 (4.8)1953(-2.2) 

1957-58 Cumulative -14.16

1956(0.92)1957(1.01)

1956: 13.01957: 10.0

1955(5.9)1956(1.6)

1960-61 Cumulative -0.72

1959(1.06)1960(1.08)

1959: 12.51960: 10.8

1959 (4.4)1960 (-4.5)

1970 -6.19 1969(1.13)1970(1.17)

1969: 10.31970: 7.7

1968(2.6)1969(1.1)

1974-75 -11.03 1973(1.12)1974(1.17)

1973: 11.41974: 11.41975: 11.0

1972(4.7)1973(4.2) 

1980-82 Cumulative -15.79

1979(1.18)1980(1.28)

1979: 12.41980: 10.1

1978(5.9)1979(0.8) 

1990-91 Cumulative -12.36

1989(1.28)1990(1.50)

1989: 7.11990: 7.11991: 5.4

1987(2.3)1989(-0.4) 

2001-02 Cumulative -18.84

2000(1.75)2001(2.02)

2000: 6.42001: 3.42002: 3.0

1997(2.4)2000(0) 

2007-09 Cumulative -28.4 

2006(2.07)2007(2.15)

2006: 13.12007: 11.02008: 7.82009: 4.4

2005(1.6)2006(-1.1)

Table 1. Crises

Upward cycle (1)

Exploitation Rate (2)

ARP (3) Assets (4) wages (5) OCC (6) labour (7) New value (8)

2003 13.1 4.1 1.9 0 2.15 -2.18 3.48

2004 24.4 7.8 1.3 2.7 2.12 1.38 12.97

2005 35.5 11.4 1.4 2.5 2.10 1.68 11.68(a)

2006 40.2 13.1 3.2 5 2.07 0.13 8.67

Ppt 27.1  9          

Table 2. The 2006-7 recovery, % growth

Crisis years(1)

Assets(2)

Wages(3)

OCC(4)

ARP(5)

Employment (6)

New Value (7)

2006 3.2 5.02.07 13.1

0.138.6

2007 5.7 1.82.15 11.0

-1.93-2.2

2008 6.0 -3.32.36 7.8

-7.53-9.5

2009 2.4 -9.62.67 4.4

-12.54-16.7

Table 3. The 2007-9 Great Recession, % growth

Chart 1. ARP and ratio of financial to total profits

Chart 2. Ratio of financial profits to profits in the productive sectors 

Peak Trough Financial crises

1973 1975 1974-5

1976 1982 1980-82

1984 1991 1984-5

1994 2002 1998; 2000

2004 2009 2007-8

Table 4. Cycles of growth of new value and financial crises 

(1) (2) % change in financial profits

(3) FP/TP (4) % change new value

(5) ARP

2003 27.38 38.2 3.4 4.1

2004 13.99 33.3 12.9 7.8

2005 17.25 29.0 11.6 11.4

2006 1.34 26.0 8.6 13.1

2007 -27.38 21.6 -2.2 11.0

Table 5. The 2007 financial crisis as potentially present in the previous recovery 

Chart 1. ARP and ratio of financial to total profits. 

Chart 3 ARP and CE-ARP