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Reisman's Net Consumption, Net Investment Theory of Aggregate Profit
Author(s) -
KIRKPATRICK JERRY
Publication year - 2004
Publication title -
american journal of economics and sociology
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.199
H-Index - 38
eISSN - 1536-7150
pISSN - 0002-9246
DOI - 10.1111/j.1536-7150.2004.00307.x
Subject(s) - economics , rate of profit , net profit , aggregate supply , profit (economics) , consumption (sociology) , aggregate demand , investment (military) , microeconomics , keynesian economics , sociology , law , monetary policy , social science , politics , political science
A bstract . This paper presents the essentials of George Reisman's net consumption, net investment theory of aggregate profit as discussed in Capitalism: A Treatise on Economics . The paper then relates Reisman's ideas to those of Austrian School economists Ludwig von Mises and Murray Rothbard. Delimiting time preference to determining the rate of net consumption, the primary determinant of aggregate profit, Reisman argues that under an invariable money, a one‐time increase in the rate of saving is sufficient to stimulate an increase in the supply of capital goods indefinitely. Reisman thereby rejects the claim that capital accumulation causes a falling rate of profit.