Why Does Profitability Fall? Paradoxes of Capital Composition and Labor Productivity

  • Juan Pablo Mateo ToméEmail author


In this chapter the determinants of the fall in profitability are analyzed from an in-depth study of the dynamics of capital accumulation, for which the author focuses on the sphere of production technology. The Spanish economy offers an atypical behavior: surprisingly, the ratios of both the composition of capital and labor productivity evolve just the opposite of what any economist would expect, and furthermore, there are features typical of a peripheral economy. The analysis nevertheless reveals the importance of capital productivity underlying the fall in the profit rate. To explain these particularities, the author shows that it is necessary to go further, since only considering the most dynamic sectors associated with the housing boom, it is then possible to explain this paradoxical macroeconomic behavior.


Capital Productivity Prices Economic structure Employment 


  1. AMECO (2019) Annual macro-economic database. European Commission’s Directorate General for Economic and Financial Affairs.Google Scholar
  2. BoS (2019a). Statistical bulletin. Bank of Spain, Madrid.Google Scholar
  3. BoS (2019b). Economic indicators. Bank of Spain, Madrid.Google Scholar
  4. Eurostat (2019) Database. Statistical office of the European Union.Google Scholar
  5. FBBVA (2019) El Stock y los servicios del capital en España y su distribución territorial y sectorial (1964–2016). BBVA Foundation/Valencian Institute of Economic Research.Google Scholar
  6. Gandoy R, Álvarez ME (2017) Sector industrial. In: Delgado JL, Myro R (dirs) Lecciones de economía española. Aranzadi, Pamplona, p 161–179.Google Scholar
  7. García C, Tello P (2011) La evolución de la cuota de exportación de los productos españoles en la última década: el papel de la especialización comercial y de la competitividad. Economic Bulletin 5:49–60.Google Scholar
  8. González J, Mariña A (1992) Formación de capital, productividad y costos: relaciones básicas. Revista Análisis Económico 10(20):3–17.Google Scholar
  9. Gouverneur J (2005) The foundations of capitalist economy. An introduction to the Marxist economic analysis of contemporary capitalism. Diffusion Universitaire Ciaco, Louvain-la-Neuve.Google Scholar
  10. Muñoz-de-Bustillo R, Esteve F (2017) The neverending story. Labour market deregulation and the performance of the Spanish labour market. In: Piasna A, Myant M (eds) Myths of employment deregulation: how it neither creates jobs nor reduces labour market segmentation. European Trade Union Institution, Brussels, p 61–80.Google Scholar
  11. Murillo FJ (2015) Análisis marxista del milagro económico español (1994–2007): dinámica salarial e impacto sobre la estructura de propiedad. Dissertation, Complutense University de Madrid.Google Scholar
  12. NSI (2018). Annual Spanish National Accounts. Base 2010. Accounting series 1995–2017. National Statistics Institute, Madrid.Google Scholar
  13. NSI (2019a). Economically active population survey. National Statistics Institute, Madrid.Google Scholar
  14. NSI (2019b). Statistical use of the Central Business Register, CBR. National Statistics Institute, Madrid.Google Scholar
  15. OECD (2019). OECD. Stat. Organisation for Economic Co-operation and Development, Paris.Google Scholar
  16. Shaikh A, Tonak A (1994) Measuring the wealth of nations: the political economy of national accounts. Cambridge, Cambridge University Press.Google Scholar
  17. World Bank (2019) World Development Indicators. Washington, DC.Google Scholar

Copyright information

© The Author(s) 2019

Authors and Affiliations

  1. 1.University of ValladolidSegoviaSpain

Personalised recommendations