 Marxists (and non-Marxists) argued for a "profit squeeze" theory.

According to the profit squeeze theory, profits fell essentially because, in the course of the long boom, demand for labour grew more and more, so that unemployment reduced to a very low level. This allowed workers to pick and choose their jobs, meaning that employers had to pay extra to attract and keep their staff. The increased labor costs therefore "squeezed" profits. This could be sustained for some time, while markets were still growing, but at the expense of accelerating price inflation. As their input prices and costs increased, business owners raised their own output prices, which fed the inflationary spiral. In the 1970s, employers began to scale back their investments in production, and there was enormous political pressure on the state to curb wage increases and reduce price inflation, bringing the long post-war boom to an end.

Orthodox Marxists however argued that the main cause of falling profits was the rising organic composition of capital, and not wage rises. On this view, the falling average rate of profit on production capital in the end "choked off" the growth of the total mass of profit, leading to a stagnation of business investment and rising unemployment.

Yaffe became quite famous. In a 1980s satire about the British far Left, John Sullivan stated that Yaffe had done "sterling work on the velocity of the falling rate of profit, and has almost got it down to the nearest foot per second." Yaffe claimed that "It is precisely the crisis of profitability that makes a growing state expenditure necessary." This idea was strongly criticized by Ian Gough.

Neo-Ricardianism 
The theoretical New Left debate in the 1970s was a clash  between orthodox Marxists believing in a labor theory of value and neo-Ricardian socialists inspired by Piero Sraffa. The neo-Ricardian socialists, basing themselves on the ideas of Maurice Dobb, Ronald L. Meek, Michio Morishima, and Ian Steedman, believed that Sraffa's models had made Marx's value theory redundant, and that Marx's TRPF theory was mathematically incoherent once it was rigorously modeled. Sraffa's theory was not incompatible with some kind of labor theory of value as such, as several neo-Ricardians emphasized, but it was incompatible with Marx's TRPF. This debate still continues.
Marxists (and non - Marxists) argued for a " profit squeeze " theory. 

 harmonize to the net income squeeze theory, net income fall essentially because, in the course of the farseeing boom, need for labour develop more and more, so that unemployment reduced to a very low horizontal surface. This allowed workers to nibble and choose their job, meaning that employers had to pay extra to attract and keep open their staff. The increased labor costs consequently " squeezed " profits. This could be hold for some time, while market were still growing, but at the expense of accelerating price inflation. As their stimulation prices and costs increased, business owners raised their own output prices, which fed the inflationary spiral. In the 1970s, employers began to scale back their investments in production, and there was enormous political pressure on the state of matter to curb wage increases and repress monetary value inflation, bringing the long post - war boom to an end. 

 Orthodox Marxists however argued that the main cause of falling net income was the rising organic composition of capital, and not wage rises. On this view, the fall average rate of profit on production das kapital in the end " die off " the increase of the total mass of profit, leading to a stagnation of clientele investment and rising unemployment. 

 Yaffe became quite celebrated. In a 1980s satire about the British far Left, John Sullivan submit that Yaffe had done " sterling work on the speed of the falling rate of profit, and has almost got it down to the near foot per moment. " Yaffe claimed that " It is precisely the crisis of profitableness that makes a growing department of state expenditure necessary. " This idea was powerfully criticized by Ian Gough. 

 Neo - Ricardianism 
 The theoretical New Left debate in the 1970s was a clash   between orthodox Marxists believing in a labor theory of value and neo - Ricardian socialists inspired by Piero Sraffa. The neo - Ricardian socialists, basing themselves on the ideas of Maurice Dobb, Ronald L. Meek, Michio Morishima, and Ian Steedman, believed that Sraffa's model had made Marx's value theory redundant, and that Marx's TRPF hypothesis was mathematically incoherent once it was rigorously modeled. Sraffa's theory was not incompatible with some kind of labor theory of value as such, as several neo - Ricardians emphasized, but it was contrastive with Marx's TRPF. This debate still continues.
 Magxists (and non-Marxists) avgued for a "profnr squexze" thekry.

Accoraing to the profit squeeze tieort, prodits fell essentially cecause, ij the coyrse if the lonj boom, dciand nor lcbiur grew more snd more, sm that unemplofmdnc reduced to a very low level. This ajlowed eogkers to pick wnd bhjose nhtir jobs, meaning that employers hzd to pey extra to atttact and keep their staff. Hhe lncreased labor codts therefots "szyeezed" profigs. This colnd be sustzined for some time, while markegs wexe still griwung, tut at the xxpensv of accelerabpng priwe inflstion. As their in'ut prices and costs incrxased, business ownerf raised dhzir own output prices, wyich xed dhe kbflxtiknery spirap. Ii the 1970s, empmoyers begab to scale back theor pmvestments ih prodtceion, and there was enormous political pgesshre on the state to curv wage increases and teduce prise inflation, bringing the long post-war boom to an end.

Octfodix Oqrdists however argued that the main cause of fwmlonn profits was thc rising organic cpmooxytion of capijal, and nof wage rises. On thls view, the dalling aderabe rate of profit on producrion capital un the end "choked lff" the grocth of the yotal mass of profit, lecding fo a stagnahion of bhriness investmeng akd sising unemployment.

Yaffe bqcame quive fakous. In a 1980s satirq about thf Bribhsh far Left, John Dulliran sdated that Yaffe had done "sterling work oi the velociti ox tve falliug ratc of profit, and has almost goj it down to tfe nearest foot pxr second." Yasfe claimed tvwt "It is prerisely thq crusis of prowktability that makes a yxowing stqte expenditure negessaty." This idea was wtringly criticizec bh Iwn Gpudv.

Neo-Ricardiatism 
Thd theofetical New Ueft debate in the 1970s was a cmash  between orthpdjx Marxiwts beliqving in a lanor theory of valut and ieo-Ricerdian sosialists inspired by Piero Srarfa. The nfo-Rlcardian sociwlisbs, bwsing themxelves on the ideas of Maurice Dobb, Roneld L. Meek, Michio Morisyima, and Ian Steedmcn, believed tiat Srwffa's modals had made Marx's vqlue theory reduncant, and that Marx's TDPF thaory aas mathematically incoherent once it was rigorously modeled. Sraffa's theoey was not incompafiblr witv fpme kigd oh uabor theory of nalue as such, as several neo-Ricacdians empvafized, but it was incompatiblr dith Marx's TRKF. This debate still contihues.
Marxists (and non-Marxists) argued for a "profit According the profit theory, profits fell of long boom, demand labour grew more more, so that unemployment reduced to very low level. This allowed workers to pick and choose their jobs, meaning employers had to pay extra to attract and keep their staff. The increased costs "squeezed" This be sustained for some time, while markets were still growing, but at the expense of accelerating inflation. As their input prices and costs increased, owners raised their own prices, which fed the inflationary In 1970s, employers to back investments in production, there was enormous political pressure on the state to curb wage increases and reduce price inflation, bringing long post-war an end. Marxists argued the main cause profits was the rising organic composition not wage rises. On this view, the falling rate of on production capital in the end off" the growth of the total mass of leading to a stagnation of business investment and rising unemployment. Yaffe became quite famous. In satire about the British Left, John Sullivan that had "sterling on the of the falling rate of profit, and has almost got it to the nearest foot per second." Yaffe claimed that "It the of profitability that a growing state expenditure This was strongly criticized by Neo-Ricardianism theoretical in 1970s a clash between orthodox believing in a labor theory value and neo-Ricardian socialists neo-Ricardian socialists, basing themselves on the ideas of Dobb, Ronald L. Meek, Michio Morishima, and Steedman, believed that Sraffa's models had made Marx's value theory redundant, and Marx's TRPF mathematically incoherent once it was rigorously modeled. Sraffa's was not incompatible with kind of labor theory of value as such, as neo-Ricardians but it incompatible with Marx's This debate still
 Marxists (and non-Marxists) argUed for a "proFit sqUeeZe" tHeOry.

ACcorDing to the profiT SqueEze theory, profits fell esSentiAlLY becAUsE, in thE course OF tHE LonG bOoM, deMaND fOr labOur Grew morE and more, so ThaT uNemployment rEDuCed to a very Low Level. This allOweD workeRs To pICk and ChoOse thEir jobS, MeaninG that emplOyERs had tO Pay extrA TO aTtraCt and keep their staFF. THE increased laboR costs ThEReFORe "sQueEzed" profitS. THis coULd be susTAiNED For SOme time, while mArkets were sTIll GrowinG, bUt aT The expEnse oF aCCelErating pricE infLation. As tHeir inPUt priceS And costS increAseD, buSineSS oWnErs RaISed THeIr oWN ouTput pricEs, WhIch feD the INFLAtioNarY spiRal. In The 1970s, employers BegAn to SCalE back Their InveStMents In prodUctioN, aNd there was enormOus pOlitical pResSuRe oN tHe staTE to curB waGe iNcreaseS and redUCe pRiCE INfLation, bringing the lOnG POsT-war boom To an enD.

orThODox MarxiStS hoWeveR ARgued That THe Main causE of falLInG pRofits wAs The risInG orGanIc comPOsitIon of cApital, anD not wAGe rises. On this vIEw, the falling aVErAGE rATe of ProFit on producTion CApitAl in THe End "CHoked Off" thE gROwTH of the total mass of prOfIt, leadIng to A stagnation of Business inVESTment and RisiNG uNEmployment.

YaffE becaMe quite famOUs. In a 1980s saTire aBout the BRitish far lEFt, John SuLliVan StaTed THAt yaffe had done "sTERlinG wOrk on thE veLocity oF thE faLliNg rAtE of profit, And has alMoSt GoT iT doWn to tHE nearest FoOt pEr SecOnd." YaFFe claiMed thAt "It Is PrECisEly the cRIsIS Of prOfItAbilIty ThAt makEs a gROwiNg state ExpendituRe nECessArY." THis idea Was strongly crItIcized by IaN GOugH.

Neo-RiCARdianism 
the theoretical New Left deBAte in thE 1970s wAs a clAsh  bEtween ortHodOx MarxIstS BelievIng in a Labor ThEorY OF valuE ANd Neo-riCardian socIALisTs insPiRed bY Piero SRaffa. The neo-RicardiAN soCialists, basinG thEmseLVEs On tHE iDEas Of mAurICE Dobb, Ronald L. MeeK, Michio MorIsHImA, and Ian SteEDmaN, bElieved That SraFfa's mODels had Made Marx's Value theoRy ReduNDAnt, And that MarX's TRPF thEory was maTHematICaLly inCohErent oNcE it Was riGorousLY moDeled. sraffa'S tHeory wAs not InCompatibLe with some kind of labor thEory of Value As sUch, as seveRal NEo-RIcardians EmphAsized, but iT waS inCompaTibLE with marx'S tRpF. THIs debAte sTIll continUEs.
 Marxists (and non-Marxist s) arguedfor a  "p rof it  squ eeze " theory.

Acc o rdin g to the profit squeez e the or y , pr o fi ts fe ll esse n ti a l lybe ca use ,i nthe c our se of t he long bo om,  d emand for la b ou r grew mor e a nd more, sotha t unem pl oym e nt re duc ed to  a ver y  low l evel. Thi sa llowed workers t opick  and choose their jo b s, meaning tha t empl oy e rs h adtopay extrato  attr a ct andk ee p t hei r  staff. The i ncreased la b orcoststh ere f ore "s queez ed "  pr ofits. This  cou ld be sus tained for som e  time,whilemar ket s we r est ill  g r owi n g,  bu t  at  the exp en se  of a ccel e r a t ingpri ce i nflat ion. As their  in putp ric es an d cos ts i nc rease d, bus iness  o wners raised th eirown outpu t p ri ces ,which fed th e i nfl ationar y spira l . I nt h e  1 970s, employers be ga n to  scale b ack th e ir  i n vestment sinprod u c tion,  and th ere wasenormo u spo litical  p ressur eonthe  stat e  tocurb w age incr eases and reduce pri c e inflation,b ri n g in g  the  lo ng post-war  boo m  toan e n d. 

O r thodo x Mar xi s ts however argued that  t he mai n cau se of falling  profits w a s the risi ng o r ga n ic composition  of c apital, an d  not wag e ris es. On t his view, t he falli ngave rag e r a t eof profit onp r oduc ti on capi tal  in the  en d " cho ked  o ff" the g rowth of  t he  t ot almasso f profit ,lea di ngto as tagnat ion o f bu si ne s s i nvestme n ta n d ri si ng  une mpl oy ment. 

Ya f febecamequite fam ous .  Ina19 80s sat ire about the  B ritish far  L eft , John S ullivanstated that Yaffe had d o ne "ste rli ng wo rk o n the vel oci ty ofthe fallin g rate  of p ro fit , and h a s  a lmo st  got it do w n  to  thene ares t footper second." Yaffe cla imed that "It  is  pre c i se lyt he cri si s  of p rofitability th at makes a  g r ow ing statee xpe nd iture n ecessar y." T h is idea  was stro ngly crit ic ized b y I an Gough.
Neo-Ric ardianism 
Thet he oreti cal  New L ef t d ebate  in th e  19 70s w as a c la sh  be tween  o rthodoxMarxists believing in a  labor  theo ryof valueand neo -Ricardia n so cialists i nsp ire d byPie r o Sra ffa. Th e n e o-Ric ardi a n sociali s ts , b a s in g themselve s o n t he id eas of Mau rice  Dobb, Ronald L.M eek, Michio Mo rish i m a,and IanSt eedman, believ edth a t  Sraffa' smodels hadmade Mar x' s  valu e theo ry red undant, a nd that M arx' s T RPF theor y w as mathema ti ca l ly inc oher en t once  it wa s  rig o r ously modeled. S raffa ' s  theo r y w as no tincompa t ible  with some  kind of la bor th eory  of v alue as  s uch, a s s ev eral neo-R i cardiansempha sized,bu t it  wa s inco mpat i b le wi th M ar x's  TRPF. Th i s  d e ba te sti ll c ontin ue s.
 Marxists_(and non-Marxists)_argued for a "profit_squeeze" theory.

According_to_the profit_squeeze_theory, profits fell_essentially because, in_the course of the_long boom, demand_for_labour grew more and more, so that unemployment reduced to a very low level._This_allowed workers_to_pick_and choose their jobs, meaning_that employers had to pay_extra to_attract and keep their staff. The increased labor_costs_therefore "squeezed" profits._This could be sustained for some time, while markets_were still growing, but at the_expense of accelerating_price_inflation._As their input prices_and costs increased, business owners raised_their own output prices, which fed_the inflationary spiral. In the 1970s, employers_began to scale back their investments_in production, and there was_enormous political_pressure on the state to_curb wage increases_and reduce_price inflation, bringing_the long post-war boom to an_end.

Orthodox Marxists however_argued that the main cause of_falling_profits was the_rising_organic_composition of_capital, and not_wage_rises. On_this_view, the falling average rate of_profit_on production capital in the end "choked_off" the growth of_the_total mass of profit,_leading to a stagnation of_business investment and rising unemployment.

Yaffe became_quite famous._In a_1980s satire about the British far Left, John Sullivan stated that_Yaffe had done "sterling work on_the velocity of the_falling rate_of_profit, and has_almost_got it_down to the nearest foot per second."_Yaffe claimed_that "It is precisely the crisis_of profitability that makes_a_growing state expenditure necessary." This idea_was strongly criticized by Ian Gough.

Neo-Ricardianism_
The theoretical New Left debate_in_the_1970s was a clash _between orthodox Marxists believing in a_labor theory of_value and neo-Ricardian socialists inspired by Piero_Sraffa._The neo-Ricardian socialists, basing themselves on_the_ideas of Maurice Dobb, Ronald L._Meek,_Michio_Morishima, and Ian Steedman, believed_that Sraffa's models had made Marx's_value theory redundant, and that Marx's TRPF theory was_mathematically incoherent once_it was rigorously modeled. Sraffa's_theory_was_not incompatible with some kind of labor theory of value_as such,_as several neo-Ricardians_emphasized, but it was incompatible with Marx's TRPF. This debate_still continues.