Debunking The Falling Rate of Profit: Tovarishch Endymion Debunked

Debunking the falling rate of profit is straightforward. Having done a bit of research I immediately grasped the deeply flawed argument. Much like I've mentioned before about economies of scale and cutting costs actually benefits businesses resulting in greater profits, the theory of the falling rate of profit is based on the deeply flawed view that when one company cuts costs and reduces prices, other companies will be forced to do the same.

This is a simplistic worldview of the economy and of the real world of economics, but you don't expect much else from the economically illiterate. Marxists simply do not understand business and the marketplace, they have no understanding of value, the fact they think value is something endogenous regarding price, never let alone objective tells you all there is to know that you can't take them seriously on economics. The history has been strongly against socialism as I've argued numerous times and no different to all their other flawed theories they create up in their own head, this theory is no different. It has nothing in history to back it with.

The history of the failed attempt of the predatory pricing example against Herbert Dow illustrates why the falling rate of profit is deeply flawed, furthermore, the examples of Soviet Union production illustrates a contradiction to their Labour Theory of Value and in the real world with value being subjective as I've explained numerous times before and in this video, I cover why their theory has no basis for the real world.

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[karlmarx]

I enjoy watching libertarians getting schooled in this comment section. I see you have actually read my books

[thomasestling]

Lol I love how his argument is just "Nuh uh, advances in production don't make commodities cheaper."

[donatopirrod]

if you and i were on an island and you had a watch and 10 dollars and i had coat and 10 dollars, it doesnt matter what we exchanged the both commodities for. it could have been 5 dollars for the coat and 5 for the watch, or 2 for the coat and 6 for the watch, the value present in our economy remains the same. Value is not created in exchange. the only thing capable of creating "value" or welath is labour. If labour creates value, then is the progressive magnitude of labour that adds value to the economy.

[Sokail]

Basic premise: "The labour theory of value is wrong because it's objective and this is wrong because value is subjective and why it is so, well because it's not objective". Welp, no, I'm afraid it's not the marxists who don't understand value, it's whoever confuses value and price. If value and price were the same thing then there wouldn't be two separate concepts nor two separate words with two separate meanings. Neither the capitalists would use terms and distinctions such as "realised/unrealised value". Value is indeed objective even when it's adjusted for the relative needs of any specific person in any specific scenario. The value of a basic house is the same for every person on the planet, it's just that for some people in some areas of the world the need for a basic house has long been overcome. This is because more wealth has been created in or stolen by and amassed in their societies and has been available to them or has been legally acquired by them as property -thus it has been excluded by the rest of in their own societies. If they lost their current status things would be very different. So, value isn't subjective, price is.

[helis]

But a commodity that's produced contains use value in and of itself from the sheer fact that it's created, and to be created he says it requires labour. Why would someone hire a worker to weave wool or tailor coats if not to create something that has value?

Marx goes on to say that use value only manifests itself *when* it goes to the market to be traded.

A coat that's been tailored but is just sitting there, is in effect just sitting there. It has to be exchanged for its value to reveal itself. Use value is subjective, exchange value is decided by the market.

I think Schumpeter got it right, though - profits will fall as a result of market forces, but that fact will drive new markets to be created and start it all over again.

[vincentmartin]

The way you talk about value shows you aren't using it in the same meaning as Marx did. Maybe learning about what he means when he uses the term value would help you make a note solid argument. As it is, you just look like you are using a strawman argument to score an easy dunk 🤷‍♂️

[xdrowssap]

libertarian argument: economics=feelings. ok i guess? doesn't inform much.

[MK-jcus]

Worst debunking ever? No, the tendency of profit to fall is not a "marxist" invention, it was a phenomenon first observed by classical liberal authors.
Second, your concept of value if fully wrong. Your concept of value is subjective like value = price. What does not fit reality for most of the goods. The fact that someone pays 1k for a Japanese signed underwear does not define its value. Marx (nor any other serious economist) was not thinking about pathological behaviours when he wrote his books. He was thinking of how societies as a whole expand their economy and how most of the people survive and get a better standard of living.

Value is defined by its costs + a margin of profit that will allow the investor to a) reinvest and b) pay his own bills. The fact that some people in the middle ages would give his lifetime economies for a (declared) relic from a Catholic saint or a paper that would give them 20m2 in heaven does not define the European Middle Age economy. Of course, Marketing and propaganda still play a role and they do allow some pretty useless industries to survive. Nevertheless, for most of the goods/services that we need for survive such as housing, heat, food, transportation, healthcare... people will not pay 50usd for a burger when they can buy an alternative for 5usd. Sure, you will find some non-average people that will gladly pay the 50usd, again this does not define the economy as a whole and even if we contemplate all "outliers" around the world, they do not outweigh the average.

Today this tendency (I wouldn't call it a law) is more true than ever, as technology evolves, both production costs and know-how for services drive prices even lower. The only thing that may stop this tendency is the simple lack of natural resources and if no alternative is discovered / developed. Note that I even didn't mention social dumping due to Globalisation, as poorer countries compete with rich ones, price of goods and services will keep falling otherwise the rich countries will lost most of their competitiveness (with some exceptions for niche markets and services which are hard to replace - we see fewer of them every year thanks to the internet).

One final remark, as capital has a "natural" tendency to accumulate and in average, the total amount of capital existing in the global economy will always increase which generates inflation, the larger amount of capital requires an at least a return of investment that will allow the investor to a) reinvest and b) pay his own bills. The problem here is not b), its a). As the amounts being invested are constantly increasing, the pressure on profitability will end in a paradox. Gains of efficiency at one hand reduce production costs and spread know how more easily, at the same time investors require what they see as a reasonable profit. But how to keep expanding the monetary mass when you have constant efficiency gains? You are either forced to discover new markets (like our body, the biotech industry perceive us all as the new American continent in terms of profitability) or to destroy wealth in order to restart from scratch (basically what WWII did to the Great Depression). I'm simplifying this debate by omitting debt and interest rate, but this would only reinforce the tendency of profit to fall. I am also omitting the fact that competition among rich and poor countries will in the long term, put salaries on a similar level (the minimum required to keep social peace), this will equally leave less spare income for the majority of the population who will not have enough to pay this "subjective extra" price that you call value.

[MajinVegito]

Aww did the widdle wibertarian not understand the diffwance between vale and price

[kingsturtevant]

'Somethings only worth what someone is prepared to pay for it'.

[gloriouscontent]

Oh yeah, that goofball that keeps begging for a debate. Surprised they're not whining in the comments.

[thefrenchareharlequins]

It looks fine on the surface, but it relies on the labour theory of value, so we can dismiss it as dumb, stupid, imbecilic, and a host of other synonyms.

[justcommenting]

Your subjective value of something isn't really relevant in aggregate. The value of something is ultimately bound by the value within the system which is a function of labor. For example you might be willing to pay 10 earths to save a family member, but so long as only one earth exists you can only pay 1 earth. If you're a resident of Kenya and your wealth is everything in Kenya you are limited to spending all wealth existing in Kenya. More realistically, if you are a farmer in Kenya the value you can spend is limited to what you can trade for your work in Kenya. If you achieve global reach perhaps you can get more for your farming labor by shipping to another country. That in turn opens you to competition while still limiting your payment to the total value the person you sell to has access to. Because money and value are distributed on the basis of labor, the basis for value is labor, the limitation of value is labor.

To take another extreme toy problem. If you had a machine that performed all jobs in an economy and required 1 worker. The value of that production would be 0 under capitalism because there is no one to sell anything to because no one has money because no one else is working.

Unless you have a method for transmitting value besides labor, labor must be *the* driver of value.

[thavishchetty]

You muddy the terms between use, exchange and market value. Bad video

[itssswyatt]

Worst "debunk" ive ever seen. Idk how you can take yourself seriously

[Welleher]

The new channel name and icon look great!

[davidlewis]

changed your name again, huh. well, a rose by any other name...

[countlessbathory]

Nothing remaims fixed the market changes, one of the main reasons we don't have a falling rate of profit is because businesses innovative according to consumer demand. For example Samsung, Apple, etc constantly make new product's which cost more every year. Innovation helps businesses increase their profit technology needs to upgrade or else it will be obslete. Just look at what the Iphone did for Apple back in 2007, we also benefited greatly because life isnt a zero sum game. These people don't live in the real world and they really need to study some economics.

[coopsnz]

Government makes more money off products socialism , not the capitalist but media only mention turnover costs as profit increasing not net profit decreasing since 1980s because they have no clue like politician don't or they lie to attack Capitalism . BMW corporation makes 4 billion turnover but they keep million yearly net after expenses, taxes, red tape