Marx's Crisis Theory of Overproduction & Falling Rate of Profit (pt 3/3)

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This is part 3/3 of a video series looking at a broad and general perspective of Marx's theory. Here we are looking at Marx's crisis theory, which introduces the concept of overproduction and a tendency for the rate of profit to fall.

Sources:

Marx (1867) Capital Vol 1.
Marx (1894) Capital Vol. 3.
Marx & Engels (1848) Communist Manifesto
Marx (1875) Critique of the Gotha Programme

[vegeta]

About eight years ago while looking out the window of a buss in my way to university, while not being a socialist, I had this thought that capitalism would end when machines take over all human labor. There can't be capitalism without people who buy the produced goods, and there can't be consumers without waged labor, thus capitalism will fall. I thought I was just a unique idea I had, a product of my own ruminations. Now I see Marx got to the same conclusion 200 years ago, when we didn't even have robots and IAs.
I want to end with quote

[erikeparsels]

No. commodities, including machines are NOT sold for more than their value. The price may oscillate above or below the value as measured by socially necessary labor time, but machines are not sold for less than their value. The source of capitalist profit lies in the distinction between labor power—the value of the goods and services the laborer needs to maintain himself (i.e. what it will take to get him in the door and working) and the value of his daily output in actual labor. The capitalist buys labor power, in other words the laboer's time, and then gets the actual labor for free. In no sense is a machine worth $1, 000, 000 routinely sold for $400, 000. The prices of commodities sold are NOT routinely below the value contained in them. Marx said that commodities are sold at their values, more or less. The capitalist does NOT make his profit by buying machines for less value than they produce, since machines, per se, do not "produce" new value at all. Labor produces value, and the machine is just a motorized tool that can only transfer its embodied labor value to the product in the process of being used up and worn out. Nor are profits made by short-changing labor and paying less for it than it is worth. In fact, the capitalist cannot buy "labor", he can only buy a laborer, a rent-a-slave, for some period of time. Profit comes from the fact that a worker has the unique property of a) being able to expend more labor time than the labor time needed to produce him and b) also being the customer who pays for the product of his labor, thus completing the circuit of exchange.

[cyclonasaurusrex]

Once again, very nicely done. Thank you.

[theword]

pretty interesting how Marx predicted the issues of AI and robotics so long ago....

[jamesnaile]

Great idea until you get humans involved

[barrymyers]

I think you got it slightly wrong about the definition of variable and fixed capital. Labour is not variable. It's numbers might vary, but that's not the point. Money, raw materials and manufactured goods are what vary as each turn into the other.. Money turns into raw materials, which become manufactured goods that get sold and become money again.

[zacoolm]

Amazing concise explanation, thank you Red Pen and I hope you continue your organic activism!

[RisingStarViews]

More investments in constant capital has helped Apple and other companies to make tons of profit. Where do you see the rate of profit falling? Apple mobiles or laptop vanish from market within no time. Vaccines creators made tons of money by spending on fixed capital

[remcovanhartevelt]

Nicely explained. I don't think it is the solution to abolish money and wealth accumulation in it's entirety, but it is good to know the concepts

[syourke]

Marx was wrong - machines do create value. They create more value than human workers. That’s why machines are replacing human labor throughout industry and commerce. In fact, machines are just like human workers except they don’t strike. This is a huge error in Marxist economic theory. It’s such a glaring error that it’s almost incomprehensible.

[lochnessmunster]

Which industry has ever collapsed due to the Falling Rate of Profit?