Last update : October 2009
The three phases after World War II and their determinants 
1) From the end of the war up to 1965, the profit rate remains at a high level (figure 1) due to labour productivity gains (figure 2), which tend to reduce the value organic composition of capital (figure 3, as well as figure 1 for the inverse of this composition). This reduction in the composition of capital is sufficient to compensate the reduction in the rate of surplus value (figure 1). The latter is due to the fact that real wage increase more than labour productivity (figure 2 ).
2) From 1965 to 1979, the profit rate continuously goes down due to the decline in the rate of surplus value (figure 1). This decline in the rate of surplus value is first coupled with a stable composition of capital (1963-73), then with a rising composition (1973-84) (figures 3 and 1). Firms compensate this decline in the profit rate through massive cuts in employment (figure 4). The growing industrial reserve army during the seventies results in a slowing down of the rate of increase of real wage (figures 2 and 4).
3) From 1979 to 2001, this slowing down of the rate of increase of real wage, compared to the rate of increase of labour productivity, results in a remarkable recovery of the rate of surplus value and, consequently, of the profit rate, but not so much of economic growth. The latter will be mainly stimulated by indebtedness of an Anglo-Saxon type as we know it today.
... More will be found in our article : "The methodological framework of Marx’s theory of crises and its empirical validation" ... unfortunately only in french : « Le cadre méthodologique de la théorie des crises chez Marx et sa validation empirique ».
 These four figures appear in an excellent article by Sergio Camara Izquierdo : "The Dynamics of The Profit Rate in Spain (1954-2001)". The latter is available on-line : http://rrp.sagepub.com/cgi/content/abstract/39/4/543.
 The shadowed areas of figure 2 refer to periods during which real wage rise less than labour productivity. The year 1979 shows a marked change : during the preceding period, real wage generally rise more than labour productivity, and conversely thereafter.
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Translation of the graph : Coût salarial horaire = Real hourly wage costs ; Productivité horaire = Hourly productivity ; Secteur privé non agricole = Private non-farming sector
The postwar period is characterized by a parallel increase in productivity and real wages. This stabilizes the share of wages in total output and enables capitalism to avoid, for some time, « Over-production [which] arises precisely from the fact that the mass of the people can never consume more than the average quantity of necessaries, that their consumption therefore does not grow correspondingly with the productivity of labour » (Marx ).
Such is the basic explanation adopted by postwar Marxists to account for that period’s prosperity : « It is undeniable that wages have risen in the modern epoch. But only in the framework of the expansion of capital, which presupposes that the relationship of wages to profits should remain constant in general. Labour productivity should therefore rise with a rapidity which would make it possible both to accumulate capital and to raise the workers' living standards » (Mattick ). In other words, « both wages and profits can rise if productivity grows sufficiently » (Mattick ). This shows us that the regulation school has not invented anything basically novel : it has simply extended an analysis already well developed by Marx and his followers (Marx ).
The lag between productivity and wages will only become apparent and increasing from the 1980’s onwards. The more rapid increase in productivity (upper curve) than in wages (lower curve) materializes capitalism’s natural tendency to expand production to a larger extent than solvent demand. This is nothing else than the basic explanation of overproduction put forward by Marx : « Over-production is specifically conditioned by the general law of the production of capital : to produce to the limit set by the productive forces, that is to say, to exploit the maximum amount of labour with the given amount of capital, without any consideration for the actual limits of the market or the needs backed by the ability to pay…» . In other words : « The ultimate reason for all real crises always remains the poverty and restricted consumption of the masses as opposed to the drive of capitalist production to develop the productive forces as though only the absolute consuming power of society constituted their limit… » .This is also what Engels summarized in a formula typically of his own : «While the productive power increases in a geometric ratio, the extension of markets proceeds at best in an arithmetic ratio » .
 Marx, Theories of surplus value (1861). Chapter XVI : Ricardo’s Theory of Profit, 3) Law of the Diminishing Rate of Profit, e) Ricardo’s Explanation for the Fall in the Rate of Profit and Its Connection with His Theory of Rent.
 Paul Mattick, Intégration capitaliste et rupture ouvrière, EDI, p151 (our translation).
 Paul Mattick, Le capital aujourd’hui, published by Maximilien Rubel in Etudes de marxologie, n°11, juin 1967 (our translation).
 Especially by 'Socialisme ou Barbarie' (1949-67), a French Marxist journal well-known at that time. The latter has largely inspired the regulation school (Aglietta, Souyri, Lipietz,…), as can be seen from this long quotation (we translate) : « Capitalism can make a compromise concerning the distribution of the social product, precisely because wages that increase more or less at the same rate as labour productivity leave the existing distribution practically unaltered. (…) The classical idea was that capitalism could not bear wage increases, for the latter would imply decreasing profits, hence a reduction of the accumulation fund that any firm badly needs to survive competition. But this static picture is not realistic. If workers’ productivity increases by 4%, with wages increasing at the same rate, profits also must increase by 4%, all other things being equal. (…) As long as wage increases are generalized and do not substantially exceed productivity gains, they are perfectly compatible with the expansion of capital. They are even indispensable from a purely economic viewpoint. In an economy that grows at an average yearly rate of 3%, and in which wages amount to 50% of final demand, any somewhat substantial gap between the rate of increase of wages and the rate of expansion of production would fairly rapidly lead to formidable imbalances and to an inability to sell off production, which could not be remedied by any ‘depression’, deep though it might be » (Socialisme ou Barbarie, n° 31, article written in 1959 and published in 1960.)
 Marx, Theories of Surplus Value, Ch. XVII.
 Marx, Capital, Vol 3, Chapter 30 : "Money capital and real capital: 1", p 615.
 F. Engels, Preface to the English edition of Volume I of Capital (1886).