The UK rate of profit rose considerably over the inter-war period and hence this period was one of significant recovery for capital, albeit with some volatility. Several decompositions of the profit rate are explored in pursuit of proximate determinants of the rising profit rate. A Marxian decomposition shows that the 1920s were characterised by a rising rate of surplus-value and a falling composition of capital; and the 1930s by a constant rate of surplus-value and a falling composition of capital. A decomposition into the product of profit share and capital productivity shows that the profit share in the first half of the 1920s was driven upwards by the excess of productivity growth over real wage rate growth, but thereafter fluctuated inversely with fluctuations in the unproductive wage share; the predominant positive impact on the profit rate was rising capital productivity. This was due to rising labour productivity with constant capital intensity in the 1920s, and rising labour productivity with falling capital intensity in the 1930s. Some implications for both Marxian theory and historical interpretation are considered. Copyright The Author 2011. Published by Oxford University Press on behalf of the Cambridge Political Economy Society. All rights reserved., Oxford University Press.
