1997" was "still only half of its value of 1948, and between 60
and 75 percent of its average value for the decade 1956-65" .24
There were attempts to explain the decline in profitability in the 1 970s as resulting from a wave of workers' struggle internationally which had supposedly forced up the workers' share of total income and cut into the share going to capital. That argument was put forward by Andrew Glyn and Bob Sutcliffe,25 by Bob Rowthorne26 and accepted in part by Ernest Mandel. 27 Glyn's analysis has been given a favourable mention much more recently by Martin Wolf.28 But statistical analysis at the time suggested there had been no increase in the share of wages when tax, capital depreciation and various other factors were taken into account. 29 The argument also failed to explain why all the Western economies moved into crisis at the same point in the mid-1970s. In Italy, Britain, Spain and France there were important improvements in the level of working class organisation in the late 1 960s and early 1970s. But there was no similar improvement in Japan and West Germany, while in the US "there was a sharp decline in real wages of non-agricultural workers from late 1 972 to spring 1975, while productivity on the whole increased" .30
What did seem to make sense-and still does-was Marx's argument about the organic composition of capital. A mainstream study of the US economy showed a rapid growth in the ratio of capital investment to workers employed in manufacturing by over 40 percent between 1957-68 and 1968-73.31 One study of the UK showed a rise in the capital-output ratio of SO percent between 1960 and the mid-1970s.32 Samuel Brittan noted with bewilderment:
There has been an underlying long term decline in the amount of output per unit of capital in manufacturing . . . This is a fairly general experience in the industrial countries . . . One can construct a fairly plausible story for any one country, but not for the industrial world as a whole.33
The more recent calculations of Michl,34 Moseley, Shaikh and Tonak and Wolff35 have all concluded that the rising ratio of capital to labour was an element in reducing profit rates. It is a conclusion that validates Marx's position that a rising ratio of capital to labour can cut into profits-and is an empirical refutation of the position held by Okishio and others that this is impossible. But it still leaves open why this happened then and not earlier.
The End of the Golden Age
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