Corporate cash, profitability and the Marxist multiplier

Michael Roberts


It is argued that corporations in the major economies are flush with cash and so the cause of the crisis cannot be due to a lack of profit or falling profitability. The cause must a 'lack of demand' or the inability or unwillingness of cash-rich corporations to invest or dispense their surpluses. This paper will argue and show with evidence that 1) corporations are not that cash-rich historically; 2) the lack of investment is not due to lack of (consumer) demand but low profitability and now falling profits and 3) the 'policy solution' is not more government spending (the Keynesian multiplier) which can lower profitability even more; but another crisis or slump that destroys capital values and boosts profitability (the Marxist multiplier).