@@kwsta_fila_me3870 It is a modern version of the Monarchy system but rather than the "divine" words of a monarch it applies a modern "round table" for final (scientific) decisions. In other words, modern version of the past centralized government features of the monarch system. It is a proposition that Adam Smith's economic liberalization (decentralization) will later evolve to Karl Marx' (centralized) hypothesis because of unforeseen/unknown external events. Those strictly following Karl Marx' proposed words are now called Trotskyist (Leon Trotsky followers, Leon Trotsky rejected the role of the Russian peasantry while Lenin embraced the Russian peasantry rather than sticking to only Industrial workers) and those constantly evolving to external events (and conditions of a particular country) are Marxist-Leninists. Let me add further, what you are observing are trade wars between countries which skews results. Also Marxist-Leninists (modern communists) could make errors, poor planning and poor management of a country's resources. Capitalists will do the same but it is worst because the decentralized capitalistic system allows for massive unemployment (increased supply of labor through competition) creates destructive social rebellions and antagonistic manifestations in society. Read final chapters of 'Democracy in America' by Alexis de Tocqueville to observe the dangers to democracy by the increased power of the manufacturing Aristocracy of a country.
Fantastic video. No other videos have taught me so much as this fundamentals of marx series has. And im including crash course in this. Fascinating. I love it. I cant wait to learn even more about marx. This is such a fantastic concise way that really explains new things even to those of us who are "marx adjacent" aka surrounded by marxists but who may not have read him ourselves
The vision for the channel is to create a large archive of such videos that talk about all Marxist concepts. It's definitely important that the videos are concise and easy to follow for people who may not have read Marx, so I'm happy to hear you've been finding it so useful! The Fundamentals of Marx series is sort of the main line of videos on the channel, so there'll definitely be a lot more coming soon.
Absolutely fantastic style. I love all of the clear graphics, the succinct explanations and your small introduction to the contemporary discussion surrounding the theory. Keep it up!
I believe that I'm struggling a little with the concept of technologization and how the implementation of automation affects surplus (mostly according to the graph) If machines are introduced that can replicate the labor-power of a worker (as we see today in various manufacturing industries) wouldn't there be not only a lack of need to pay wages but also a slight increase in the constant capital (upkeep of automation machines) which would result in significantly more surplus value (unless the upkeep is similar to the wages that would have to be paid for such a task)? I'm sorry if my terminology isn't entirely correct but I hope that I can get my question across
I'm no expert on this but my understanding is that the argument would be that since Marx thought that surplus value can only be derived from labour, the increase in constant capital will shrink the amount of value that can actually be extracted. This is because competition will always motivate firms to sell commodities at the lowest possible price, so the more constant capital is involved in production the closer the prices on average will get to the bare costs of upkeep for the machinery. Unlike with labour, you cannot exploit machines, the costs will simply be what they are and no firm will want to sell significantly above the cost of those machines, knowing any other firm will have room to then undercut them. The process you describe, however, is what motivates firms to increase constant capital since it will indeed result in a short-term windfall for them and get a lead over competitors. Hence why it's referred to as a 'contradiction' of capitalism.
What Conor said is how I interpreted it too. Essentially, human labour can be exploited but machines can't. You may produce 10 shirts for me but I can then give you the money I made for only 5 of them, and keep the other 5 for myself. You have no choice but to accept this, or get kicked out and have no money. I am able to exploit you and you have no choice. However, I can't do this with a machine. Whatever the costs are to run it, I have to pay them, or the machines will simply stop working and I'll make no money. Now, we can apply a similar scenario to above with this machine. Let's say that the cost to maintain this machine for a day, is the same price I can sell 5 shirts for. But the machine creates 10 shirts per day! Hoorah, I pay the price of 5 shirts, but I sell 10 so I still profit by the cost of 5 shirts, just like when I exploited the humans before! ...however, I have other businesses to compete with, and they all have the same technology. I want more people buying MY product. So I have to lower the price... this now means that it actually takes the price of 7 shirts to run these machines. Which means I'm now only making a profit of 3 shirts. ...and to make matters worse, my competitors have done the same thing. Uh-oh. Now I'll have to lower it even more. And then more... and more... until now the cost to run this machine is the price of 10 shirts... which is the amount of shirts my machine is making anyway. Now I'm not making any profit. Fuck. Why is this different from humans? Because with humans, I had alternative routes. I could have made them work more, or I could have lowered their pay. I can't do this with machines though. I lower their "pay" and they just break. And presumably, I have them working 24/7 already, so I can't increase their working time. It was the very fact that humans were limited but exploitable, that allowed me to take advantage of the situation and compete with others. Although, even that exploitation can only go so far (I will eventually hit a lower limit on how much I can pay, and how long I can make them work). So what happens when we hit that limit? Suppose EVERYONE starts exploiting their workers as much as they can. 14 hour shifts, and minimum wage for EVERY company. Once again, we all match up, we can't compete anymore, we've equalised. In an ideal world for the capitalist, this would be a safe place to be. As long as we all agree to stay here on equal terms, we can all profit... but hey, it's capitalism, there's always gonna be some greedy fuck out there. So how will they get ahead? They're advance their tech! Make their production cheaper by making it superior! Now EVERYONE has to do the same to keep up, and push us one step closer to automation. Ultimately, it means automation is inevitable because capitalism encourages competition. And automation means profits falling to 0 is inevitable. And that means the collapse of capitalism is also inevitable. Pretty neat.
@@OriginalChaosLord In the scenario of maximum exploitation - all firms squeezing out as much as possible from labor at the lowest wage that allows its reproduction - what stops competition from eating into surplus value? Say there were no advances in automation to invest in, couldn't one firm cut into the surplus value in order to undercut the competition? Wouldn't this lead the surplus value extracted from labor (and therefore profit) to approach zero over time, even without an accumulation of constant capital? From there I suppose it would lead to the formation of a monopoly based on which firm is able to hold out the longest at reduced profits or even operating at a loss. Or is it the case that no capitalist would deem the greater market share worth the loss of profits and some sort of equilibrium would be reached? I feel like there's something I'm missing.
@@doug604 After you get to max exploitation, if there are no new automation growths, profit will slowly dwindle for the capitalist like you said. Meaning that what could happen is that the market will crash, because it runs on exchange of profit, leading to a domino effect on the production and transportation of goods since capitalists won’t want to spend money(as much) getting people to do that. Though no profits is unrealistic anyways since the companies can’t displease their investors or they will go under even farther.
Hey! Great content on the channel, very informative without dumbing anything down. Jumping off the LTRPF, I want to draw your attention to software piracy and of digital goods in general (movies, music, books etc.). Replication of digital media is at or near zero marginal cost, meaning less labor overall corresponds to each unit. So artificial scarcity in these cases is the only method to maintain profits high. Am I correct? Is post scarcity already achieved in the digital realm, making profits plummet? Can we actually observe falling rates of profit in the software sector? I would very much like to know what you think. Congrats again for the amazing work you've put in so far!
Thanks for your comment! Im glad you're liking the comment. This is an excellent question and frankly I dont know how qualified I am to respond. Digital commodities certainly come from a really complex production process making it hard to equate to more tangible products. I would say that while you dont have to produce a new copy of, say, Microsoft Office or Adobe PS, from scratch everytime, the total labor power that goes into making the software far exceeds the price it goes for as a single copy. So you could say that price of each copy of MS office is substantially under its value, but the replication of the copy comes at negligible cost so Microsoft still makes a profit by selling millions of copies. Also there's labor power spent on regular updates and patches, which is probably reflected in the price. But yeah, to a large degree, the software and digital media we are charged for probably only costs so much because companies fix prices at a certain level. I think that while we are approaching post-scarcity with digital commodoties, we still havent achieved the same conditions for the means of production used to create digital products (i.e. computer/circuits, energy, plastics and metals, etc.). As for an empirically proven falling profit rate within the digital sector, I dont know. I'd need to read more concrete analyses to make any claims. My guess is that, like all sectors, the digital world follows larger global trends because it relies on other markets for its own existence. So the rate of profit might be consistent with the overall trends. I'll definitely try to make a video to better deal with your question!
So basically, As production becomes more efficient across the board, socially necessary labour time shrinks and even though you are creating more products, they sell for the same price as fewer products before? So you produce more but your ratio of profit to commodities produced falls? E.g. A factory in 1950 producing 10 TVs makes the same money as a company producing 1,000 TVs in 2020, because the profit margin of each TV has shrunk, the factory just produces more of them? Did I get this right?
According to marx, you would get less profits now compared to the 1950s. Marx only looked at profits as something created by workers. He believed that the ammount of labour put into making something was the literal definition of how valuable that thing was. This means that having less humans work=less value, and profits only come from sucking out value from the workers according to Marx. Obviously anyone with half a brain can see why this is not true. The profits are not created by the ammount of labour put into something, but by the fact that people are willing to buy what you produce for more than what it took to produce it, and that is based on supply and demand. A (in the capitalist contexst) completely rational worker will only work more because they want to meet a demand to get money, they dont put in labour to create some inherent value found in labour, like Marx thinks. Nobody buys things based on how much labour someone put into it, but based on what you are willing to pay for such a product and what options there are.
@@darklazerx7913 No he didn't believe the amount of labor was the literal, single, only definition of value. He accounts for a billion other things that go into it. And he also defines as labor being socially necessary, so it fluctuates according to the entire economy. He clearly accounts for supply and demand within this. Obviously workers work for money and people buy things because they want to buy them... that's not what any of that means. Marxian economics is all mathy and complicated, which is why it's hard to understand, but it's not stupid like that lol Think of labor defining value as this: do you pay to breathe? No, because air is all around us; there's no labor that goes into it. Labor is any productive activity, from transportation to manufacturing. If there's demand for something that isn't easily available, then the supply is low, so the prices go up. If something isn't easily available, there is usually more labor that goes into it. If it's rare, transportation --> labor. If it's a complicated thing to produce, then manufacturing time and costs --> labor. A capitalist has to be willing to spend more on labor and so more money and so things get more expensive etc etc. I gotta finish reading Capital, but you gotta read it more than I do, please
This is overproduction in an elastic market. In an inelastic company, the business leadership could simply slow production and still pay workers. The majority of the market is elastic anyway.
Capitalism follows 'cycles' like the stock market, or any market system for that matter. It goes through a series of accumulation periods, and then a 'crunch' a consolidation period. Where capitalists will accumulate so much capital and over produce capital to the point competition is almost zero, and then consolidate. You are trying to play down that system by using terms like "elasticity" as if a business owner or what ever will make the judgmental call to simply stop accumulating for the sake of paying workers. It's just a triage fix at that point. A good example is the corporate media in the US, they accumulated so much capital (other news stations, journalists etc) and then consolidated their entire investment time on Donald Trump, culling jobs, and shutting down press firms etc, all to focus their entire attention on what Trump was doing. And now their profits are in a free fall because he's gone from office. Infact, almost all media profits are in a free fall right now because of the massive accumulated world of the internet, soon it too will follow the same pattern.
@@strongfp You may want to start at - 2. The Diagnosis. The reason is because the United States is the center of global capital. One more thing, part 3, The Cure, never speaks of destroying religion. Religion is never the target of economic change.
Great Video Comrade! Thank you for educating the people onto the profit and the value onto capitalism that exploits the proletariat. You make very great videos. Keep up the good work my friend.
You use socialism as an identity. You know how illogical the ideology is, you just don't want to admit it to yourself despite you knowing it is such, because you have built your identity around it.
Yes, as an example on top of the "extended workday" example of increasing the rate of exploitation, corporations will seek out regions that do not require them to pay as high of a wage or limit the working day to increase the rate of profits temporarily. By outsourcing jobs, corporations can reduce the constant capital needed to go into a process because of the lower wages. The need to maintain an ever increasing rate of profit on top of competition from other firms that are decreasing the price of a commodity pushes corporations to seek (labor) markets outside of where they were originally based to stay competitive.
This video doesn't really address innovation and the creation of new markets. Just because one company no longer requires as many workers, doesn't mean that the workers will no longer have jobs. It actually facilitates the creation of new industries. Also, bringing down costs will mean that people are able to have more resources. This video would be impossible to make if automation had drastically improved the efficiency, lowered the cost and reduced the need for workers in agriculture.
This idea, or at least the example, would seem to only hold true in a closed system, where (using the video's example) TV's are the only thing that have been or ever will be invented. Even if diminishing, as long as there are no material or technological hard ceilings, there can be the potential for profit as new industries are created. Lastly, a theoretical model (especially in soft sciences) suggesting something approaches zero does not mean it practically can and will, especially when catained within a larger system, any physicist/engineer can tell you that.
Hey, i have a question. If certain industry lowers the price due to the factors mentioned, and certain other industry does the same, then both commodities would end up at an equivalent price again, thereby exchanging at the same price, so, in theory; Wouldn't they be making the same in value if they both exchage now for the same?
Well yes I think so however this ignores the other companies that get more buttfucked by the cheaper prices before they could use the new tech to make the new average price amount for TVs
@@arwinwest2505 indeed, and i did understand back again. Simply, the less variable capital, the less room for surplus value, so theres no way around it.
There's more TVs and the TVs are easier and cheaper to produce. Workers can afford them for less and assuming everything else follows this trend the workers can buy more for less pay and the companies need less profit to function. All that's really going on is that money or wealth is deflating which isn't a problem at all and natural as long as the population is growing
This theory may be more relevant than ever with the introduction of AI. AI is a "renewable resource" in that it mostly take jobs and not give. The recent layoffs should tell you all about it.
does this account for an increase in the quality of the commodity, as in competition would not just push the capitalists to automate but also to have an increase in quality compared to their competitors?
it doesn’t tho, capitalists are driven to decrease product quality in a multitude of ways as long as it’s more profitable. this is why things like pesticides and planned obsolescence are used, not because we lack alternatives, but because the alternatives aren’t as profitable :)
What Jack Ri said notwithstanding, I don't think that tendency would have any effect on the LTRPF. Let's assume competition pushes a capitalist to increase the quality of their commodity. In the short term, the higher quality relative to their competitors gives them an advantage, meaning they steal customers from their competitors and increase their profits. As time goes on, however, their competitors will increase their own commodities' quality to close the competitive gap, or otherwise will go out of business. In either case the long term result is equilibrium. Another way to think about it is the profits gained by increasing quality comes from stealing customers from competitors, not from the quality of the commodity itself. Of course, it's possible that people will pay more for a better commodity, but this does not by itself imply that the rate of PROFIT will commensurately increase. More likely than not, improving quality involves an increased labor input and hence price.
Furniture is a great example of an argument to counter this, we talk about how things are more expensive now but don’t even acknowledge that the same affordable desk from the 1980s was made from steel and hardwood, an affordable desk today is poster board and aluminum. Not to mention nearly all modern steel is recycled and significantly less strong than pre WWII steels (recycling steel adds more carbon to the metal I believe) so there is that too
@@BrozusFilms That's not the main problem with steel. Carbon content is easy to control as you can either add more or burn it away with oxygen. But steel will always have additive alloy metels in it and when you mix them together in recycled steel you have no control over the quality of the steel because removing alloy metal is much harder than removing carbon and beacuse each batch have different alloy mixed in with different quantitiy
I don't get it, if something is entirely produced by a machine and has no variable capital, why can't the firm sell it at a profit? If the machine produces something at $1 and the firm can find a buyer at $1.25 why can't they get profit there?
These are good questions and I hope I can provide (at least the start of) an adequate answer. One thing to consider is the theoretical notion of "full automation." When we refer to full automation in this case, we are talking about an productive process that is *entirely*, from start to finish, automated. In other words, machines make the machines needed to make products. Machines make repair drones/machines to maintain the production cycle. Machines gather the resources and refine them. The point is that there is *no* variable capital at all in this thought experiment. So the whole system is self-restorative and in perpetual motion. There are literally zero costs involved with production, so you wouldn't even have that $1 cost. If you have a model of machines that can reproduce themselves ad infinitum, the production process is free. Obviously that's a pretty far-fetched scenario. The objective is to illustrate that once variable capital is totally phased out of the production process, there wouldn't be a way to earn any *new* profits. Machines possess value insofar as they are the products of labor conducted by humans. At the heart of Marx's argument is the idea that human labor has the unique potential to create *new* value. Machines can impart value into other objects, but only as much as they themselves have "stored." You can think of machines (and really any tools) as a sort of value battery. A little bit of the charge (value) is imparted into the creation of a new object. Eventually the battery dries out, which Marx depicts as the natural life expectancy of a given tool/machine (a hammer that is regularly used will be worn out beyond use after, say 20 years). As machines replace more and more human labor in the global production chain, the relative amount of new value created goes down. Eventually, in our full-automation scenario, we are no longer creating new value. That is not to say that we stop producing things altogether. It's just that the things we produce no longer have value. (Exchange) value is kind of a weird and abstract concept in Marx, and I often find it hard to think about. But we can refer back to our original vision of full-automation, where machines make machines that make machines that make machines (...) that make our products. It costs us nothing to produce things. Any "profit" we make in selling the goods now comes at some arbitrary price decided by the firm, which is probably going to be very, very low since competition will incentivize a constant drop in prices. If companies can somehow convince people to spend money on products that are known to be made at no cost, they'd still be faced with the issue that there can no longer be an increase in the *rate* of "profit." It'll just be some flat, arbitrarily defined price. As for the $1 in your scenario, with the $1.25 selling price, that's entirely plausible in a sub-automated system, where maybe certain aspects of production still involve labor somewhere, like in the maintenance of the machines that produce the commodity. That involves the type of capital-labor contract we're familiar with, where the worker is producing above the value of his or her compensation. For me, the automation argument is better used to understand a general trend. Instead of worrying about what it's going to look like in the end-stages of automation, what we are better off doing is understanding that the *process* of mechanizing labor creates a tangible drop in surplus value that ultimately affects profit rates. It may very well be the case that the LTRPF follows an asymptotic curve that will bring is infinitely closer to a negligible rate of profit. I'm just not sure. I hope that kind of answers your question :/
@José Pedro Coelho Nature creates use values. In the Critique of the Gotha Program.Marx critizizes the belief that humane labour has divine creativity. You have to understand the relation of use and exchange value and money as the universal exchange value and thus the relativt of price to value and use value. Exchange value is a relation between persons who are setting use values in a determined relation which implicates a postulate of identity. So Marx says that the metaphysical principal of identity going back to Patmenides is involved in the concept of the commodity. That’s why he uses the example with geometry before linking the concept of abstract labour to value.
Marx said: Competition creates monopolies and monopoly leads to competition again. With fewer and fewer companies, of course. That means: If one gets a little more expensive, the others use it to throw the expensive one off the market. Marx said: Everyone is always a seller and a buyer. This means that if someone sells the goods at a higher price, the buyer must also sell the goods at a higher price. If, for example, the metal dealer increases the price, then the customer as a bicycle manufacturer or machine builder also has to pass on the price increase. The metal dealer would now pay more - as a customer - for a bicycle or a machine or a car. The worker would also pay more for a car and must now demand higher wages. All now have their prices around eg. increased by 20 percent. But nothing really happened. Only nominally everyone has 20 percent more. Marx addressed this in the first and third volumes.
Nice video! I am reading The Capital at the moment. I do realize an error Marx made when he assumed that the "Labor" is the sole source of producing the surplus value, and it is related to LTRPF theory. As we know, capitalists buy the "exchange-value" of the labor and consume its "use-value", which is greater, thus comes the surplus. However, Marx didn't treat machines the same way. He assumed that the "exchange-value" and the "use-value" of the machine are the same (The Capital, chapter. 8). But in reality they should be different just as the labor. The capitalists buy machines at their "exchange-value" which is determined by the labor required to produce such machine, but consume its "use-value", which is the efficiency that they produce products and is probably far greater than their "exchange-value". In other words, machines can also be a source of surplus value just as the labor. Consequently, the basis of LTRPF is gone. I invite you to read USE-VALUE, EXCHANGE-VALUE, AND THE DEMISE OF MARX’S LABOR THEORY OF VALUE by Steve Keen
I don't see what the reason is for thinking that all profit needs to be derived from labour. If I have a fully automated factory that produces solar panels, then how am I not getting value out of this? Is the idea that because competitors would also have automated factories therefore solar panels would be a 100% competitive market where prices are forced downwards to just cover the material and maintenance costs? Because in that case sure I might not be 'profiting' in the sense of making money, but you still get to reap the rewards of having tons of solar panels. in other words, it sounds like this end state of 0 profits would actually be a utopia with absolutely no scarcity whatsoever, right?
@@Xerdocreisson there absolutely are automated processes. think of a vending machine: if people are paying by card then you don't need to go collect the payments, and a lot of machines can automatically detect when they need to be restocked, so you don't need any human management. a single person could own hundreds of them no problem
@@Xerdocreisson even if it's done by a human, which is doesn't necessarily have to be, that's beside the point, since the value of the vending machine is offering the service of vending. if you count the delivery as part of the value of the vending machine then you'd be counting it twice, since the value of the delivery is already accounted for in the payment to the deliverers
@@Xerdocreisson exactly, it's part of the delivery, but not the whole thing, meaning that there's some value being created by something other than labour
@@red_Sun24 no, because labor is still necessary to create the product (human or automated). No matter the value on the market, as long as a profit is made, it will get value because of labor because labor is required to make the commodity. The value may fluctuate based on supply and demand, but there would be no value at all without labor. Also, the LTV isn’t debunked because of automation, because the machine still has to produce more money than the capitalist spends on the machine. Labor still creates all value under complete automation, the labor just isn’t done by humans. (Complete automation is also currently impossible since human labor is required for maintaining machines)
@@d3th2m3rikkka im pretty sure in the LTV automation doesnt count as labour. also if youre saying that the market value doesnt matter, then how are you measuring value? because if you use labour input as the measurement, then the statement becomes completely tautological since youre defining value as being the same as labour
@@TheDentist27 because capitalism demands exploitation of labor. The more labor you can exploit and at greater amounts, the surplus will increase. Profit is surplus value, surplus value is the difference between what the laborer produces in value during the work process and what they are aid as a wage. That difference is the most significant source of profit for a capitalist, the unpaid value the worker creates. This is why wage labor is exploitation and must be abolished. The biggest irony is people or capitalists saying that socialists don't want to work or just want get paid to do nothing. No, the worker just wants recieve the value equal to what they produce. But this will never happen under capitalism.
@@anthonyesposito7 that does not answer my question regarding why, according to the video, increasing constant capital decreases surplus value. If an employer can gain profit (surplus value) on the difference between what a worker is paid, and the value the worker creates, then why can't an employer gain profit (surplus value) on the difference between what a machine costs to run, and the value the machine creates?
I think the way that Marxists explain this very important tendency in capitalism really sucks! Forget the equations and explain it more simply. Competition drives capitalists to reduce prices and improve functionality by means of increased capital equipment. While this may increase the absolute amount of profits for a time it reduces the rate of profit which is profit measured against investment. This tendency becomes manifested in each sector which tends to go from an early stage when the required investment is relatively small and profits and profit rates are high to an older more mature stage when the required investment is much greater and profit rates are much lower. Why is this important? The rate of profit is an important factor in the considerations of investors in general. And investment will tend to flow away from those older mature sectors with a low rate of profit to newer sectors where profits and profit rates are more plentiful. The problem comes because the newer sectors become a smaller proortion of the economy as a whole. Thus we see older sectors such as iron and steel, vehicle production, transport and so forth sinking into declne and unable to attract the massive long term investment they need. Eventually, the older less profitable sectors drag down the rest of the economy with them. Of course, that is where capitalism no longer offers a solution and public ownership is needed. Another simple example of the Tendency of the Rate of Profit to Fall can be seen in the life cycle of products which go from early adoption as expensive highly profitable products for the first company producing them through to a mature phase when competition comes into market, prices fall and profits become very low.00 We need much simpler explanations like this to popularise these concepts and turn them into weapons of hundreds of millions. or we will just end up talking to ourselves. Let's never forget Marx's famous expression "Philosophers merely interpret the world. Our job is to change it!"
The equivalent of surplus value is taken from the producers that are the machines. You don't need human producers labor power to produce the value. You just need ANY laborers, including literally machines. Why do you think surplus value extraction diminishes because it's machines? The part you need to be looking at is what happers to human labir when they are replaced with machines because they are needed to be consumers, purchasers of the commodities
quoting Popper: “There is, for example, a trend towards an ‘accumulation of means of production* (as Marx puts it). But we should hardly expect it to persist in a population which is rapidly decreasing; and such a decrease may in turn depend on extra-economic conditions, for example, on chance inventions, or conceivably on the direct physiological (perhaps bio chemical) impact of an industrial environment. There are, indeed, countless possible conditions; and in order to be able to examine these possibilities in our search for the true conditions of a trend, we have all the time to try to imagine conditions under which the trend in question would disappear. But this is just what the historicist cannot do. He firmly believes in his favourite trend, and conditions under which it would disappear are to him unthinkable. The poverty of historicism, we might say, is a poverty of imagination. The historicist continuously upbraids those who cannot imagine a change in their little worlds; yet it seems that the historicist is himself deficient in imagination, for he cannot imagine a change in the conditions of change.”
Sorry, you didn't explain how the decline of labor power in the production process necessarily reduces surplus value. Wouldn't it be more profitable to not pay employees...? It would have been nice if you stuck with the TV example, I'm having trouble understanding.
Because in Marxian economics, surplus value is seen as a characteristic of labour. In other words, the profit that capitalists extract from the production process comes from paying the workers less than their full share of the value they create in the process. The less people you employ (because of increased efficiency and automation), the lesser is your pool from which you can extract surplus. Once you produce with more efficiency, you lower your prices to remain competitive, and you tend to overproduce, which increases supply. For every product made, less amount of work is required, leading to layoffs. Imagine a factory where every single thing relating to the production of TVs is automated. Literally nobody needs to work there. The raw materials are also automatically extracted and transported. Now the cost of a single TV is miniscule, it's literally just the maintenance costs relating to this machinery, and even that can be automated. Once you pay off all this investments, what is the price of the TV? If you have 2 of these types of factories, each of them will try to outcompete the other for a lower price, in order to get the consumer to pick them. This leads the price of the TV to approach exactly the cost of producing it, which is pretty much nil at this point. So the profits are slowly but surely squeezed out of the equation since there is no human element to shorthand, as to extract the surplus. I'm not an expert but this is how I understood it. There are other factors involved obviously, and in real life it's more complicated, but this phenomenon has been observed empirically to be a real thing. It explains, for example, why across the board productivity has gone up, but wages have been going down. The capitalists are further squeezing the surplus from people's wages to account for the falling profits resulting from the increase in technological efficiency.
The rate of profit is measured as the ratio of the flow of after-tax profit to the replacement cost value of fixed assets at the beginning of the period.
How exactly is it controversial? It’s literally objectively correct, even if it’s not the dominant economic force at a given time it’s always lurking in the background
ie. constant capital imparts it's constituent value onto the commodities it creates, but doesnt contribute new value into the commodity that can be homogenised at the point of exchange
in monopsony capitalism the falling rate of profit does not control. We are in that stage of capitalism and it really makes no sense to consider the falling rate of profit as relevant. In fact, the rate of profit is actually growing and the rate of wealth transfer is accelerating. Now, under our present conditions, it's imperative we spend time condemning how these monopolistic capitalists are exploiting us instead of looking at Marx from 170 years ago and determining new ways to wrest the burden of these parasites from ourselves with new doctrine that considers our present state of affairs.
I feel as if the flaws of the labour theory of value are showing here. Yes, automation does remove value or effort created by a worker, but when it comes to goods which meet our basic needs these will always be in demand. The price isn’t completely determined by required labour so long as governments enforce their currency as the primary unit of exchange. Even if every necessary input in the process of production is fully automated, essentially making the product “free”, the capitalist has the power to and is incentivized to limit output to level prices out. This can be achieved through sufficient monopolization. The capitalist is incentivized to maintain profit in this way so that he can purchase products which have not yet been fully automated, or those of which whose prices have also artificially levelled in the same way. The capitalist is incentivized to collude in this way with his brethren by the time most processes are automating in order to maintain his “superior” social status. The labour theory of value is flawed in that it aims to totalize the subjective measure of value in a single quantity. We treat labour as valuable, but other factors are in play as well, such as scarcity (artificial or not), and their essentiality. An orange when we are hungry has value regardless of the labour of a product.
Obviously it's been a while since you commented this but Marx differentiates value, use-value, exchange-value, and price-- that value is determined by the amount of socially necessary labor time needed to produce a commodity doesn't mean the same is true for price; Marx goes into this at great length. Also, no, the value of an orange materializes only through the medium of exchange. Air, for example, is not a commodity because it isn't obtained through exchange and no labor goes into receiving it; the necessity of air (for all practical purposes) remains constant in human life, and it would only have value if human labor were required to bring it into your existence.
3:00 what? The machine is simply a slave (that you can extract surplus value from with minimum reproduction inputs of capital for maintenance etc) that replaces multiple workers. There is no need to assume that a machine diminishes the equivalent of surplus value, the surplus value taken from the worker is simply transferred to a higher level of surplus value extraction from the machine. The falling rate of profits comes when the workers, who by necessity of capitalism need to be consumers, are put into new jobs and production overall increases, therefore causes a surplus and profits to fall OVERALL. This is why UBI is important, because rates of profits will fall if you don't add UBI with automation, but when you add UBI you are bo longer in the definition of "capitalism" technically because there is no surplus value extraction from the people, you replaced each ten people with one machine and gain the "surplus value" from that machine. Get this metaphysical shit out of your head, it's the act of production that is creating the value, it doesn't matter if that if from a biological entity or a machine. The worker as a human doesn't magically create the value.
the nature of competition leads every capitalist to exploit his/her workers more ( giving them bad wages to increase the amount of capital to invest in machinery ) so there is no freedom under capitalism for the workers to refuse this wage slavery conditions as capitalists tell us describing capitalism system 😂😂😂 In the end, competition results are not for the benefits of all humans but for specific ones ( the capitalists ) . competition leads to economic crises where we workers pay for that by our taxes when the governments give them loans from our taxes to get basic needs we pay for something we are the reason for . competition under capitalism is portrayed in the capitalists arguments to be good as commodities get cheaper but that leads to the destruction of commodities and chaos of production and the need to wage wars to save capitalist system by dinding new markets for the excess commodities no one can buy because of the competition nature the capitalists admire !!!!! . in contrast capitalism is a sucky system full of contradictions , here comes the definition of socialism : the public ownership of the means of production ( no exploitation and no inequality) , planning between production units so there will be no chaos of production and so no wars , no economic crises as there is no exploitation leads people not to buy the commodities . this shows us that the problem of poverty is caused by the distribution of production not the amount of resources as capitalists liars tell us .
It seems like the analysis breaks down at high levels of automation. When automation is simple enough, it can be counted as capital. As it gets more complicated, it seems like it would be interpreted as a slave. I can see replacing a human slave with an advanced robot and there would be no real difference to the capitalist. Are slaves capable of creating surplus value? As humans it seems like they should, but as beings that are bought and maintained by the capitalist, it seems like they should count as capital.
This looks to me more like a demonstration of the failure of the labor theory of value. The capitalist, thinking only in terms of money, understands that he gets paid not by maximizing hours of unpaid labor, but by maintaining the gap between gross income and total costs. How those costs are divided between employing capital equipment and employing workers doesn't change the bottom line. What am I missing?
But that's all within the classical supply-demand theory, and has nothing to do with the labor theory of value. And as you suggest, real-world capitalists get around this, not only through marketing but by avoiding competition and by shifting investment among multiple product lines in different stages of maturity. I still don't see how Marx's version of this tells us anything interesting.
This is the best accidental debunking of the labor theory of value, EVER! Complete automation doesn't eliminate profit, therefore labor theory of value is baseless.
What the fuck are you talking about? The value is still generated by labor, but not human labor. (although there will likely be human labor needed to maintain the machines).
@@d3th2m3rikkka What the fuck are you talking about? The value with 100% automation would be part of the constant capital. This doesn't get counted into labor, because it isn't human labor. Even the upkeep cost of the machines weather done by humans or not, is still not labor, it is constant capital, by definition.
@@3jacen Ok, you're right about machine labor being constant capital but it doesn't mean the LTV is debunked. "A third and final proof of the correctness of the labor theory of value is the proof by reduction to the absurd. It is, moreover, the most elegant and most “modern” of the proofs. Imagine for a moment a society in which living human labor has completely disappeared, that is to say, a society in which all production has been 100 per cent automated. Of course, so long as we remain in the current intermediate stage, in which some labor is already completely automated, that is to say, a stage in which plants employing no workers exist alongside others in which human labor is still utilized, there is no special theoretical problem, since it is merely a question of the transfer of surplus value from one enterprise to another. It is an illustration of the law of equalization of the profit rate, which will be explored later on. But let us imagine that this development has been pushed to its extreme and human labor has been completely eliminated from all forms of production and services. Can value continue to exist under these conditions? Can there be a society where nobody has an income but commodities continue to have a value and to be sold? Obviously such a situation would be absurd. A huge mass of products would be produced without this production creating any income, since no human being would be involved in this production. But someone would want to “sell” these products for which there were no longer any buyers! It is obvious that the distribution of products in such a society would no longer be effected in the form of a sale of commodities and as a matter of fact selling would become all the more absurd because of the abundance produced by general automation. Expressed another way, a society in which human labor would be totally eliminated from production, in the most general sense of the term, with services included, would be a society in which exchange value had also been eliminated. This proves the validity of the theory, for at the moment human labor disappears from production, value, too, disappears with it."
@@d3th2m3rikkka It is like you didn't read what I wrote, or watch the video. Not surprising considering your tactic is to just copy paste. "Ok, you're right about machine labor being constant capital but it doesn't mean the LTV is debunked." It does mean that you fail to understand the basic ideas we are discussing, which is why you have to rely on stealing someone else's words.
@@3jacen I read what you wrote and watched the video. It's kind of hard to think clearly when I only got a couple of hours of sleep last night and have stuff to do. Copy pasting something to make a point might be "lazy" but I'm not going to spend half an hour writing a fucking essay in the comments section of a youtube video. What that man wrote represented my thoughts after I actually thought clearly about what you were saying. Your failure to refute what I copy pasted only shows how unwilling you are to actually looking at things that might change your opinion on the LTV. If you won't read the article, then there's really no point in continuing this conversation. I don't have time to argue with people who won't listen to my arguments and simply resort to saying I'm lazy for not writing 10 paragraphs on Marx in a youtube comments section.
When production cost drop production tends to increase for most products because now there is more demand for the lower price, also many times companies will work for higher net income even if it is a lower profit ratio they still get overall more money, now of course there are exceptions to this with different products and different industries but that determined primarily by marginal utility, maginal productivity, and diminishing returns, all of this is explained by marginalism because labor value theory is wrong it is not labor but instead utility that guides value in prices, because the price is based on the subjective value placed by the consumer not the subjective value the worker places on their time and energy that only comes in the workers wage which is just part of the price, but if you do not find this argument convincing because of the subjective psychology then let us look at it in material terms a company automates its assembly making it take less time and energy to convert resources from a raw form to a more useful form this makes it to where there is less waste and other processes can now be more efficient leading to new possibilities for growth, what does it matter if the work is done by a meat machine (humans, other animals) or a metal machine, the same uses come from transforming resources, by the logic of the law of the tendency of the rate of profit to fall when the transition from domesticated animals to tractors would have led to mass starvation but instead it contributed to less more food being produced and population growth because more people could be fed, and yes farmers lost jobs to for the most part work in other industries that did not exist before, and yes there are still starving people even though we have the technology to support them all, but the point is from what I understand from history and markets this model of economics and human behavior is wrong.
Looks like innovation increases production, lowers cost, increases availability, which floods market and necessitates further innovation. There is not a perfection of automation of anything except theoretically. This video does not deal with the praxeological inevitability of a flooded market at all, and it presumes all persons who could purchase a product would and that they would continue to do so to the point that perfect automation would eventually be realized. A new better product would supplant the previous. Also Inputs would need to be dealt with in a finite world of finite resources.
Capitalism making good cheaper and cheaper doesn’t sound bad to me. If the capitalists profits fall that’s their problem. If the means of production is ever seized it’s best to wait until it’s all automated and the capitalists are no longer needed no? At that point they may not even care if there is no longer any profit to be made. At least if this theory is true. There wasn’t much rebuttal talked about. Just one and that was from a Marxist economist.
This is ridiculous. The reason capitalists automate is because automation is cheaper than labor and it creates more value than labor by itself. The profits would rise, not fall.
@@Runs-InCircles According to Marx value is the amount of human labor put into something. In the real world value is "the benefit provided by a good or service".
@@ArtisticLayman That describes exchange value, the pricing of a commodity but notice that exchange value isn't all that exists. For example a diamond can have high exchange value but low use value whereas a car can have low exchange value and high use value. What I'm asking is what is value in & of itself. If we take 10 coats to be equal to 10 burgers or whatever the equivalent amount is in the real world then we can say that this amount is representing something that the two commodities share? You with me? So this thing that value in itself is representing, the quantitative difference between "equal value" of commodity x (coats) & commodity z (hamburgers), what could that be?
Look at how the life style of the Soviet Union, Communist China or Cuba fell. They never attained the stained of living of Europe and the USA. China had to adopt a form of Capitalism "with Chinese Characteristics" to escape Mao's Leninist policies with the subsequent poverty they brought. Now Cuba has modified Capitalism. No Socialist country can survive without a Black Market. There are fundamentals of falling living standards in Communist states. All communist states failed in economic competition with Capitalist countries using Leninist policies. Economic output in communist countries is/was so low. We never saw a workers paradise or even the equivalent of lifestyle of the European middle class. However, Party Elites lived the good life. In China, all the men (there are NO women) in the Politburo, are billionaires (Mao would have killed they all). Those living at the top of the hierarchy (which never dissolved as Marx promised) have a good life. Economic mediocrity is the historical record of Socialism. Many believe that Worker Co-ops can produce Marx's unrealized promises. However, Worker Co-ops will always be under the control of the One Party state; Workers Co-ops will never run their own show. They will answer to the Dictatorship of the Proletariat.
What? Surely Rusia's standard of living went up a lot from being a feudal society to going to space in just 50 years. I'm also sure cuban people live a lot better now than in the times of Batista, even with all the US sanctions
@@alexredfield1943 Of course there were improvements. However, people went from one dictatorship to another dictatorship (but there was no "dictatorship of the proletariat"). These improvements came at the cost of the loss of all civil liberties. There is no loyal opposition in Communism. Dissent was and is a crime in Cuba.
@@alexredfield1943 Of course there were improvements. However, people went from one dictatorship to another dictatorship (but there was no "dictatorship of the proletariat"). These improvements came at the cost of the loss of all civil liberties. There is no loyal opposition in Communism. Dissent was and is a crime in Cuba.
@@100Mmore When production cost drop production tends to increase for most products because now there is more demand for the lower price, also many times companies will work for higher net income even if it is a lower profit ratio they still get overall more money, now of course there are exceptions to this with different products and different industries but that determined primarily by marginal utility, maginal productivity, and diminishing returns, all of this is explained by marginalism because labor value theory is wrong it is not labor but instead utility that guides value in prices, because the price is based on the subjective value placed by the consumer not the subjective value the worker places on their time and energy that only comes in the workers wage which is just part of the price, but if you do not find this argument convincing because of the subjective psychology then let us look at it in material terms a company automates its assembly making it take less time and energy to convert resources from a raw form to a more useful form this makes it to where there is less waste and other processes can now be more efficient leading to new possibilities for growth, what does it matter if the work is done by a meat machine (humans, other animals) or a metal machine, the same uses come from transforming resources, by the logic of the law of the tendency of the rate of profit to fall when the transition from domesticated animals to tractors would have led to mass starvation but instead it contributed to less more food being produced and population growth because more people could be fed, and yes farmers lost jobs to for the most part work in other industries that did not exist before, and yes there are still starving people even though we have the technology to support them all, but the point is from what I understand from history and markets this model of economics and human behavior is wrong.
When Karl Marx does analysis it is for the survival of society. When an economist does analysis it is for the survival of businesses.
Well said
No
yeah except it doesnt work and the society is destroyed
@@kwsta_fila_me3870 It is a modern version of the Monarchy system but rather than the "divine" words of a monarch it applies a modern "round table" for final (scientific) decisions. In other words, modern version of the past centralized government features of the monarch system. It is a proposition that Adam Smith's economic liberalization (decentralization) will later evolve to Karl Marx' (centralized) hypothesis because of unforeseen/unknown external events. Those strictly following Karl Marx' proposed words are now called Trotskyist (Leon Trotsky followers, Leon Trotsky rejected the role of the Russian peasantry while Lenin embraced the Russian peasantry rather than sticking to only Industrial workers) and those constantly evolving to external events (and conditions of a particular country) are Marxist-Leninists. Let me add further, what you are observing are trade wars between countries which skews results. Also Marxist-Leninists (modern communists) could make errors, poor planning and poor management of a country's resources. Capitalists will do the same but it is worst because the decentralized capitalistic system allows for massive unemployment (increased supply of labor through competition) creates destructive social rebellions and antagonistic manifestations in society. Read final chapters of 'Democracy in America' by Alexis de Tocqueville to observe the dangers to democracy by the increased power of the manufacturing Aristocracy of a country.
@@kwsta_fila_me3870 Ur confusing the capitalist class with society in toto
Fantastic video. No other videos have taught me so much as this fundamentals of marx series has. And im including crash course in this. Fascinating. I love it. I cant wait to learn even more about marx. This is such a fantastic concise way that really explains new things even to those of us who are "marx adjacent" aka surrounded by marxists but who may not have read him ourselves
The vision for the channel is to create a large archive of such videos that talk about all Marxist concepts. It's definitely important that the videos are concise and easy to follow for people who may not have read Marx, so I'm happy to hear you've been finding it so useful!
The Fundamentals of Marx series is sort of the main line of videos on the channel, so there'll definitely be a lot more coming soon.
Exactly! It’s impossible to find good Marxist literature in capitalist society
Absolutely fantastic style. I love all of the clear graphics, the succinct explanations and your small introduction to the contemporary discussion surrounding the theory. Keep it up!
I believe that I'm struggling a little with the concept of technologization and how the implementation of automation affects surplus (mostly according to the graph)
If machines are introduced that can replicate the labor-power of a worker (as we see today in various manufacturing industries) wouldn't there be not only a lack of need to pay wages but also a slight increase in the constant capital (upkeep of automation machines) which would result in significantly more surplus value (unless the upkeep is similar to the wages that would have to be paid for such a task)?
I'm sorry if my terminology isn't entirely correct but I hope that I can get my question across
I'm no expert on this but my understanding is that the argument would be that since Marx thought that surplus value can only be derived from labour, the increase in constant capital will shrink the amount of value that can actually be extracted. This is because competition will always motivate firms to sell commodities at the lowest possible price, so the more constant capital is involved in production the closer the prices on average will get to the bare costs of upkeep for the machinery. Unlike with labour, you cannot exploit machines, the costs will simply be what they are and no firm will want to sell significantly above the cost of those machines, knowing any other firm will have room to then undercut them.
The process you describe, however, is what motivates firms to increase constant capital since it will indeed result in a short-term windfall for them and get a lead over competitors. Hence why it's referred to as a 'contradiction' of capitalism.
What Conor said is how I interpreted it too.
Essentially, human labour can be exploited but machines can't. You may produce 10 shirts for me but I can then give you the money I made for only 5 of them, and keep the other 5 for myself. You have no choice but to accept this, or get kicked out and have no money. I am able to exploit you and you have no choice.
However, I can't do this with a machine. Whatever the costs are to run it, I have to pay them, or the machines will simply stop working and I'll make no money.
Now, we can apply a similar scenario to above with this machine. Let's say that the cost to maintain this machine for a day, is the same price I can sell 5 shirts for. But the machine creates 10 shirts per day! Hoorah, I pay the price of 5 shirts, but I sell 10 so I still profit by the cost of 5 shirts, just like when I exploited the humans before! ...however, I have other businesses to compete with, and they all have the same technology. I want more people buying MY product. So I have to lower the price... this now means that it actually takes the price of 7 shirts to run these machines. Which means I'm now only making a profit of 3 shirts.
...and to make matters worse, my competitors have done the same thing. Uh-oh. Now I'll have to lower it even more. And then more... and more... until now the cost to run this machine is the price of 10 shirts... which is the amount of shirts my machine is making anyway. Now I'm not making any profit. Fuck.
Why is this different from humans? Because with humans, I had alternative routes. I could have made them work more, or I could have lowered their pay. I can't do this with machines though. I lower their "pay" and they just break. And presumably, I have them working 24/7 already, so I can't increase their working time. It was the very fact that humans were limited but exploitable, that allowed me to take advantage of the situation and compete with others.
Although, even that exploitation can only go so far (I will eventually hit a lower limit on how much I can pay, and how long I can make them work). So what happens when we hit that limit? Suppose EVERYONE starts exploiting their workers as much as they can. 14 hour shifts, and minimum wage for EVERY company. Once again, we all match up, we can't compete anymore, we've equalised. In an ideal world for the capitalist, this would be a safe place to be. As long as we all agree to stay here on equal terms, we can all profit... but hey, it's capitalism, there's always gonna be some greedy fuck out there. So how will they get ahead? They're advance their tech! Make their production cheaper by making it superior! Now EVERYONE has to do the same to keep up, and push us one step closer to automation.
Ultimately, it means automation is inevitable because capitalism encourages competition. And automation means profits falling to 0 is inevitable. And that means the collapse of capitalism is also inevitable. Pretty neat.
@@OriginalChaosLord In the scenario of maximum exploitation - all firms squeezing out as much as possible from labor at the lowest wage that allows its reproduction - what stops competition from eating into surplus value? Say there were no advances in automation to invest in, couldn't one firm cut into the surplus value in order to undercut the competition? Wouldn't this lead the surplus value extracted from labor (and therefore profit) to approach zero over time, even without an accumulation of constant capital?
From there I suppose it would lead to the formation of a monopoly based on which firm is able to hold out the longest at reduced profits or even operating at a loss. Or is it the case that no capitalist would deem the greater market share worth the loss of profits and some sort of equilibrium would be reached? I feel like there's something I'm missing.
@@OriginalChaosLord this comment helped me understand it better then the video. Thanks!
@@doug604 After you get to max exploitation, if there are no new automation growths, profit will slowly dwindle for the capitalist like you said. Meaning that what could happen is that the market will crash, because it runs on exchange of profit, leading to a domino effect on the production and transportation of goods since capitalists won’t want to spend money(as much) getting people to do that. Though no profits is unrealistic anyways since the companies can’t displease their investors or they will go under even farther.
Hey! Great content on the channel, very informative without dumbing anything down.
Jumping off the LTRPF, I want to draw your attention to software piracy and of digital goods in general (movies, music, books etc.). Replication of digital media is at or near zero marginal cost, meaning less labor overall corresponds to each unit. So artificial scarcity in these cases is the only method to maintain profits high.
Am I correct? Is post scarcity already achieved in the digital realm, making profits plummet? Can we actually observe falling rates of profit in the software sector? I would very much like to know what you think.
Congrats again for the amazing work you've put in so far!
Thanks for your comment! Im glad you're liking the comment.
This is an excellent question and frankly I dont know how qualified I am to respond. Digital commodities certainly come from a really complex production process making it hard to equate to more tangible products.
I would say that while you dont have to produce a new copy of, say, Microsoft Office or Adobe PS, from scratch everytime, the total labor power that goes into making the software far exceeds the price it goes for as a single copy. So you could say that price of each copy of MS office is substantially under its value, but the replication of the copy comes at negligible cost so Microsoft still makes a profit by selling millions of copies. Also there's labor power spent on regular updates and patches, which is probably reflected in the price.
But yeah, to a large degree, the software and digital media we are charged for probably only costs so much because companies fix prices at a certain level.
I think that while we are approaching post-scarcity with digital commodoties, we still havent achieved the same conditions for the means of production used to create digital products (i.e. computer/circuits, energy, plastics and metals, etc.).
As for an empirically proven falling profit rate within the digital sector, I dont know. I'd need to read more concrete analyses to make any claims. My guess is that, like all sectors, the digital world follows larger global trends because it relies on other markets for its own existence. So the rate of profit might be consistent with the overall trends.
I'll definitely try to make a video to better deal with your question!
Commenting for the good of communism... I-i mean, algorithm
fantastic content
So basically,
As production becomes more efficient across the board, socially necessary labour time shrinks and even though you are creating more products, they sell for the same price as fewer products before?
So you produce more but your ratio of profit to commodities produced falls? E.g. A factory in 1950 producing 10 TVs makes the same money as a company producing 1,000 TVs in 2020, because the profit margin of each TV has shrunk, the factory just produces more of them?
Did I get this right?
According to marx, you would get less profits now compared to the 1950s. Marx only looked at profits as something created by workers. He believed that the ammount of labour put into making something was the literal definition of how valuable that thing was. This means that having less humans work=less value, and profits only come from sucking out value from the workers according to Marx. Obviously anyone with half a brain can see why this is not true. The profits are not created by the ammount of labour put into something, but by the fact that people are willing to buy what you produce for more than what it took to produce it, and that is based on supply and demand. A (in the capitalist contexst) completely rational worker will only work more because they want to meet a demand to get money, they dont put in labour to create some inherent value found in labour, like Marx thinks. Nobody buys things based on how much labour someone put into it, but based on what you are willing to pay for such a product and what options there are.
@@darklazerx7913 Which is why capitalists should pay ALL TAXES because they are the only ones producing value.
Right?
🤣😂
@@darklazerx7913 No he didn't believe the amount of labor was the literal, single, only definition of value. He accounts for a billion other things that go into it. And he also defines as labor being socially necessary, so it fluctuates according to the entire economy. He clearly accounts for supply and demand within this. Obviously workers work for money and people buy things because they want to buy them... that's not what any of that means. Marxian economics is all mathy and complicated, which is why it's hard to understand, but it's not stupid like that lol
Think of labor defining value as this: do you pay to breathe? No, because air is all around us; there's no labor that goes into it. Labor is any productive activity, from transportation to manufacturing. If there's demand for something that isn't easily available, then the supply is low, so the prices go up. If something isn't easily available, there is usually more labor that goes into it. If it's rare, transportation --> labor. If it's a complicated thing to produce, then manufacturing time and costs --> labor. A capitalist has to be willing to spend more on labor and so more money and so things get more expensive etc etc. I gotta finish reading Capital, but you gotta read it more than I do, please
This is overproduction in an elastic market. In an inelastic company, the business leadership could simply slow production and still pay workers. The majority of the market is elastic anyway.
Capitalism follows 'cycles' like the stock market, or any market system for that matter.
It goes through a series of accumulation periods, and then a 'crunch' a consolidation period. Where capitalists will accumulate so much capital and over produce capital to the point competition is almost zero, and then consolidate. You are trying to play down that system by using terms like "elasticity" as if a business owner or what ever will make the judgmental call to simply stop accumulating for the sake of paying workers. It's just a triage fix at that point.
A good example is the corporate media in the US, they accumulated so much capital (other news stations, journalists etc) and then consolidated their entire investment time on Donald Trump, culling jobs, and shutting down press firms etc, all to focus their entire attention on what Trump was doing. And now their profits are in a free fall because he's gone from office. Infact, almost all media profits are in a free fall right now because of the massive accumulated world of the internet, soon it too will follow the same pattern.
@@strongfp Thanks. You may have already read: 'Why Communism?' by M.J. Login (1933).
@@cristiangerardinobilityhou5410 I didn't even bother after reading the first three pages.
@@strongfp You may want to start at - 2. The Diagnosis. The reason is because the United States is the center of global capital. One more thing, part 3, The Cure, never speaks of destroying religion. Religion is never the target of economic change.
So competition causes the falling rate of profit? Since prices may go down through automation, it lowers the price? Or am I thinking about this wrong?
Yes but there are many ways in which the capitalist can delay this. And it's well understood by them even if they would use different language.
Great Video Comrade!
Thank you for educating the people onto the profit and the value onto capitalism that exploits the proletariat. You make very great videos. Keep up the good work my friend.
You use socialism as an identity. You know how illogical the ideology is, you just don't want to admit it to yourself despite you knowing it is such, because you have built your identity around it.
@@人間-y7r I build a political affiliation and practice of it. It makes more sense than just adhering to the problems of capitalism blindly.
Awesome channel!!! Thank you for existing.
Holly sish this makes so much sence, that what’s I was thinking on my own before 2:58
Based and marx pilled
Hakim has a really uplifting video on this framing it as capitalism's self destruct mechanism!
Excellent, many thanks. This is well worth repeated views on my part…..✊
this video was outstanding in clearly explaining these concepts
So does this explain outsourcing and the global market expansion away from national self sufficiency?
Yes. Also capitalist imperialism. Due to the needs of the stock market a company will outgrow it's home market.
Yes, as an example on top of the "extended workday" example of increasing the rate of exploitation, corporations will seek out regions that do not require them to pay as high of a wage or limit the working day to increase the rate of profits temporarily. By outsourcing jobs, corporations can reduce the constant capital needed to go into a process because of the lower wages. The need to maintain an ever increasing rate of profit on top of competition from other firms that are decreasing the price of a commodity pushes corporations to seek (labor) markets outside of where they were originally based to stay competitive.
This video doesn't really address innovation and the creation of new markets. Just because one company no longer requires as many workers, doesn't mean that the workers will no longer have jobs. It actually facilitates the creation of new industries. Also, bringing down costs will mean that people are able to have more resources. This video would be impossible to make if automation had drastically improved the efficiency, lowered the cost and reduced the need for workers in agriculture.
ruclips.net/video/pNhdKpTGfAU/видео.html
Good shit
This idea, or at least the example, would seem to only hold true in a closed system, where (using the video's example) TV's are the only thing that have been or ever will be invented. Even if diminishing, as long as there are no material or technological hard ceilings, there can be the potential for profit as new industries are created. Lastly, a theoretical model (especially in soft sciences) suggesting something approaches zero does not mean it practically can and will, especially when catained within a larger system, any physicist/engineer can tell you that.
The rate of new industries is in absolute decline.
Hey, i have a question. If certain industry lowers the price due to the factors mentioned, and certain other industry does the same, then both commodities would end up at an equivalent price again, thereby exchanging at the same price, so, in theory; Wouldn't they be making the same in value if they both exchage now for the same?
Well yes I think so however this ignores the other companies that get more buttfucked by the cheaper prices before they could use the new tech to make the new average price amount for TVs
@@arwinwest2505 indeed, and i did understand back again. Simply, the less variable capital, the less room for surplus value, so theres no way around it.
There's more TVs and the TVs are easier and cheaper to produce. Workers can afford them for less and assuming everything else follows this trend the workers can buy more for less pay and the companies need less profit to function. All that's really going on is that money or wealth is deflating which isn't a problem at all and natural as long as the population is growing
This theory may be more relevant than ever with the introduction of AI. AI is a "renewable resource" in that it mostly take jobs and not give. The recent layoffs should tell you all about it.
what's the name of the music?
great stuff
Great Video ! Does anyone know the name of the music ?
Sounds like Bach.
2:53 "...the lower the surplus value" I didn't understand that comment. Can someone please explain.
Thank you
does this account for an increase in the quality of the commodity, as in competition would not just push the capitalists to automate but also to have an increase in quality compared to their competitors?
it doesn’t tho, capitalists are driven to decrease product quality in a multitude of ways as long as it’s more profitable. this is why things like pesticides and planned obsolescence are used, not because we lack alternatives, but because the alternatives aren’t as profitable :)
What Jack Ri said notwithstanding, I don't think that tendency would have any effect on the LTRPF. Let's assume competition pushes a capitalist to increase the quality of their commodity. In the short term, the higher quality relative to their competitors gives them an advantage, meaning they steal customers from their competitors and increase their profits. As time goes on, however, their competitors will increase their own commodities' quality to close the competitive gap, or otherwise will go out of business. In either case the long term result is equilibrium. Another way to think about it is the profits gained by increasing quality comes from stealing customers from competitors, not from the quality of the commodity itself. Of course, it's possible that people will pay more for a better commodity, but this does not by itself imply that the rate of PROFIT will commensurately increase. More likely than not, improving quality involves an increased labor input and hence price.
Furniture is a great example of an argument to counter this, we talk about how things are more expensive now but don’t even acknowledge that the same affordable desk from the 1980s was made from steel and hardwood, an affordable desk today is poster board and aluminum. Not to mention nearly all modern steel is recycled and significantly less strong than pre WWII steels (recycling steel adds more carbon to the metal I believe) so there is that too
@@BrozusFilms That's not the main problem with steel. Carbon content is easy to control as you can either add more or burn it away with oxygen. But steel will always have additive alloy metels in it and when you mix them together in recycled steel you have no control over the quality of the steel because removing alloy metal is much harder than removing carbon and beacuse each batch have different alloy mixed in with different quantitiy
I don't get it, if something is entirely produced by a machine and has no variable capital, why can't the firm sell it at a profit? If the machine produces something at $1 and the firm can find a buyer at $1.25 why can't they get profit there?
These are good questions and I hope I can provide (at least the start of) an adequate answer.
One thing to consider is the theoretical notion of "full automation." When we refer to full automation in this case, we are talking about an productive process that is *entirely*, from start to finish, automated. In other words, machines make the machines needed to make products. Machines make repair drones/machines to maintain the production cycle. Machines gather the resources and refine them. The point is that there is *no* variable capital at all in this thought experiment. So the whole system is self-restorative and in perpetual motion. There are literally zero costs involved with production, so you wouldn't even have that $1 cost. If you have a model of machines that can reproduce themselves ad infinitum, the production process is free.
Obviously that's a pretty far-fetched scenario. The objective is to illustrate that once variable capital is totally phased out of the production process, there wouldn't be a way to earn any *new* profits. Machines possess value insofar as they are the products of labor conducted by humans. At the heart of Marx's argument is the idea that human labor has the unique potential to create *new* value. Machines can impart value into other objects, but only as much as they themselves have "stored." You can think of machines (and really any tools) as a sort of value battery. A little bit of the charge (value) is imparted into the creation of a new object. Eventually the battery dries out, which Marx depicts as the natural life expectancy of a given tool/machine (a hammer that is regularly used will be worn out beyond use after, say 20 years).
As machines replace more and more human labor in the global production chain, the relative amount of new value created goes down. Eventually, in our full-automation scenario, we are no longer creating new value. That is not to say that we stop producing things altogether. It's just that the things we produce no longer have value.
(Exchange) value is kind of a weird and abstract concept in Marx, and I often find it hard to think about. But we can refer back to our original vision of full-automation, where machines make machines that make machines that make machines (...) that make our products. It costs us nothing to produce things. Any "profit" we make in selling the goods now comes at some arbitrary price decided by the firm, which is probably going to be very, very low since competition will incentivize a constant drop in prices. If companies can somehow convince people to spend money on products that are known to be made at no cost, they'd still be faced with the issue that there can no longer be an increase in the *rate* of "profit." It'll just be some flat, arbitrarily defined price.
As for the $1 in your scenario, with the $1.25 selling price, that's entirely plausible in a sub-automated system, where maybe certain aspects of production still involve labor somewhere, like in the maintenance of the machines that produce the commodity. That involves the type of capital-labor contract we're familiar with, where the worker is producing above the value of his or her compensation.
For me, the automation argument is better used to understand a general trend. Instead of worrying about what it's going to look like in the end-stages of automation, what we are better off doing is understanding that the *process* of mechanizing labor creates a tangible drop in surplus value that ultimately affects profit rates.
It may very well be the case that the LTRPF follows an asymptotic curve that will bring is infinitely closer to a negligible rate of profit. I'm just not sure.
I hope that kind of answers your question :/
@José Pedro Coelho can you explain that in brief???
@José Pedro Coelho bruh what
@José Pedro Coelho Nature creates use values. In the Critique of the Gotha Program.Marx critizizes the belief that humane labour has divine creativity. You have to understand the relation of use and exchange value and money as the universal exchange value and thus the relativt of price to value and use value. Exchange value is a relation between persons who are setting use values in a determined relation which implicates a postulate of identity. So Marx says that the metaphysical principal of identity going back to Patmenides is involved in the concept of the commodity. That’s why he uses the example with geometry before linking the concept of abstract labour to value.
Marx said: Competition creates monopolies and monopoly leads to competition again.
With fewer and fewer companies, of course.
That means: If one gets a little more expensive, the others use it to throw the expensive one off the market.
Marx said: Everyone is always a seller and a buyer.
This means that if someone sells the goods at a higher price, the buyer must also sell the goods at a higher price.
If, for example, the metal dealer increases the price, then the customer as a bicycle manufacturer or machine builder also has to pass on the price increase. The metal dealer would now pay more - as a customer - for a bicycle or a machine or a car.
The worker would also pay more for a car and must now demand higher wages.
All now have their prices around eg. increased by 20 percent. But nothing really happened. Only nominally everyone has 20 percent more.
Marx addressed this in the first and third volumes.
The Tendential Fall in the Rate of Profit -- thank you!
Nice video! I am reading The Capital at the moment. I do realize an error Marx made when he assumed that the "Labor" is the sole source of producing the surplus value, and it is related to LTRPF theory. As we know, capitalists buy the "exchange-value" of the labor and consume its "use-value", which is greater, thus comes the surplus. However, Marx didn't treat machines the same way. He assumed that the "exchange-value" and the "use-value" of the machine are the same (The Capital, chapter. 8). But in reality they should be different just as the labor. The capitalists buy machines at their "exchange-value" which is determined by the labor required to produce such machine, but consume its "use-value", which is the efficiency that they produce products and is probably far greater than their "exchange-value". In other words, machines can also be a source of surplus value just as the labor. Consequently, the basis of LTRPF is gone. I invite you to read USE-VALUE, EXCHANGE-VALUE, AND THE DEMISE
OF MARX’S LABOR THEORY OF VALUE by Steve Keen
What martial are you familiar with?
Where can I order a phony television?
[Ps - keep up the good work. Your channel deserves way more views]
From the phony Capitalist enterprise which is everyone of them
I don't see what the reason is for thinking that all profit needs to be derived from labour. If I have a fully automated factory that produces solar panels, then how am I not getting value out of this? Is the idea that because competitors would also have automated factories therefore solar panels would be a 100% competitive market where prices are forced downwards to just cover the material and maintenance costs?
Because in that case sure I might not be 'profiting' in the sense of making money, but you still get to reap the rewards of having tons of solar panels. in other words, it sounds like this end state of 0 profits would actually be a utopia with absolutely no scarcity whatsoever, right?
@@Xerdocreisson there absolutely are automated processes. think of a vending machine: if people are paying by card then you don't need to go collect the payments, and a lot of machines can automatically detect when they need to be restocked, so you don't need any human management. a single person could own hundreds of them no problem
@@Xerdocreisson even if it's done by a human, which is doesn't necessarily have to be, that's beside the point, since the value of the vending machine is offering the service of vending. if you count the delivery as part of the value of the vending machine then you'd be counting it twice, since the value of the delivery is already accounted for in the payment to the deliverers
@@Xerdocreisson exactly, it's part of the delivery, but not the whole thing, meaning that there's some value being created by something other than labour
@@red_Sun24 no, because labor is still necessary to create the product (human or automated). No matter the value on the market, as long as a profit is made, it will get value because of labor because labor is required to make the commodity. The value may fluctuate based on supply and demand, but there would be no value at all without labor. Also, the LTV isn’t debunked because of automation, because the machine still has to produce more money than the capitalist spends on the machine. Labor still creates all value under complete automation, the labor just isn’t done by humans. (Complete automation is also currently impossible since human labor is required for maintaining machines)
@@d3th2m3rikkka im pretty sure in the LTV automation doesnt count as labour. also if youre saying that the market value doesnt matter, then how are you measuring value? because if you use labour input as the measurement, then the statement becomes completely tautological since youre defining value as being the same as labour
I don’t understand why increasing constant capital decreases surplus value.
Workers doing less labor as automation grows
@@100Mmore why does surplus value grow with workers doing labor but not with automation doing labor?
The way I understand it increased automation means more goods are chasing the same number of consumers who are now paid less
@@TheDentist27 because capitalism demands exploitation of labor. The more labor you can exploit and at greater amounts, the surplus will increase. Profit is surplus value, surplus value is the difference between what the laborer produces in value during the work process and what they are aid as a wage. That difference is the most significant source of profit for a capitalist, the unpaid value the worker creates. This is why wage labor is exploitation and must be abolished. The biggest irony is people or capitalists saying that socialists don't want to work or just want get paid to do nothing. No, the worker just wants recieve the value equal to what they produce. But this will never happen under capitalism.
@@anthonyesposito7 that does not answer my question regarding why, according to the video, increasing constant capital decreases surplus value. If an employer can gain profit (surplus value) on the difference between what a worker is paid, and the value the worker creates, then why can't an employer gain profit (surplus value) on the difference between what a machine costs to run, and the value the machine creates?
The rising MASS - David Harvey
I think the way that Marxists explain this very important tendency in capitalism really sucks! Forget the equations and explain it more simply. Competition drives capitalists to reduce prices and improve functionality by means of increased capital equipment. While this may increase the absolute amount of profits for a time it reduces the rate of profit which is profit measured against investment. This tendency becomes manifested in each sector which tends to go from an early stage when the required investment is relatively small and profits and profit rates are high to an older more mature stage when the required investment is much greater and profit rates are much lower.
Why is this important? The rate of profit is an important factor in the considerations of investors in general. And investment will tend to flow away from those older mature sectors with a low rate of profit to newer sectors where profits and profit rates are more plentiful. The problem comes because the newer sectors become a smaller proortion of the economy as a whole. Thus we see older sectors such as iron and steel, vehicle production, transport and so forth sinking into declne and unable to attract the massive long term investment they need. Eventually, the older less profitable sectors drag down the rest of the economy with them.
Of course, that is where capitalism no longer offers a solution and public ownership is needed.
Another simple example of the Tendency of the Rate of Profit to Fall can be seen in the life cycle of products which go from early adoption as expensive highly profitable products for the first company producing them through to a mature phase when competition comes into market, prices fall and profits become very low.00
We need much simpler explanations like this to popularise these concepts and turn them into weapons of hundreds of millions. or we will just end up talking to ourselves. Let's never forget Marx's famous expression "Philosophers merely interpret the world. Our job is to change it!"
The equivalent of surplus value is taken from the producers that are the machines. You don't need human producers labor power to produce the value. You just need ANY laborers, including literally machines. Why do you think surplus value extraction diminishes because it's machines?
The part you need to be looking at is what happers to human labir when they are replaced with machines because they are needed to be consumers, purchasers of the commodities
Great video!
quoting Popper:
“There is, for example, a trend towards an ‘accumulation of means of production* (as Marx puts it). But we should hardly expect it to persist in a population which is rapidly decreasing; and such a decrease may in turn depend on extra-economic conditions, for example, on chance inventions, or conceivably on the direct physiological (perhaps bio chemical) impact of an industrial environment. There are, indeed, countless possible conditions; and in order to be able to examine these possibilities in our search for the true conditions of a trend, we have all the time to try to imagine conditions under which the trend in question would disappear. But this is just what the historicist cannot do. He firmly believes in his favourite trend, and conditions under which it would disappear are to him unthinkable. The poverty of historicism, we might say, is a poverty of imagination. The historicist continuously upbraids those who cannot imagine a change in their little worlds; yet it seems that the historicist is himself deficient in imagination, for he cannot imagine a change in the conditions of change.”
Sorry, you didn't explain how the decline of labor power in the production process necessarily reduces surplus value. Wouldn't it be more profitable to not pay employees...? It would have been nice if you stuck with the TV example, I'm having trouble understanding.
Because in Marxian economics, surplus value is seen as a characteristic of labour. In other words, the profit that capitalists extract from the production process comes from paying the workers less than their full share of the value they create in the process. The less people you employ (because of increased efficiency and automation), the lesser is your pool from which you can extract surplus.
Once you produce with more efficiency, you lower your prices to remain competitive, and you tend to overproduce, which increases supply. For every product made, less amount of work is required, leading to layoffs.
Imagine a factory where every single thing relating to the production of TVs is automated. Literally nobody needs to work there. The raw materials are also automatically extracted and transported. Now the cost of a single TV is miniscule, it's literally just the maintenance costs relating to this machinery, and even that can be automated. Once you pay off all this investments, what is the price of the TV?
If you have 2 of these types of factories, each of them will try to outcompete the other for a lower price, in order to get the consumer to pick them. This leads the price of the TV to approach exactly the cost of producing it, which is pretty much nil at this point. So the profits are slowly but surely squeezed out of the equation since there is no human element to shorthand, as to extract the surplus.
I'm not an expert but this is how I understood it. There are other factors involved obviously, and in real life it's more complicated, but this phenomenon has been observed empirically to be a real thing. It explains, for example, why across the board productivity has gone up, but wages have been going down. The capitalists are further squeezing the surplus from people's wages to account for the falling profits resulting from the increase in technological efficiency.
@@jonirischx8925this is really helpful!
Please add subtitles comrade!!!
what is rate of profit
The rate of profit is measured as the ratio of the flow of after-tax profit to the replacement cost value of fixed assets at the beginning of the period.
How exactly is it controversial? It’s literally objectively correct, even if it’s not the dominant economic force at a given time it’s always lurking in the background
ThaThanks
Why can't constant capital produce new value?
see the labor theory of value
ie. constant capital imparts it's constituent value onto the commodities it creates, but doesnt contribute new value into the commodity that can be homogenised at the point of exchange
@@duskyflathead4483 thanks 🙏
**happy anarcho-commie noises**
Maybe in 200 years friend, for now we need vanguard parties and state power to defend against reactionaries
in monopsony capitalism the falling rate of profit does not control. We are in that stage of capitalism and it really makes no sense to consider the falling rate of profit as relevant. In fact, the rate of profit is actually growing and the rate of wealth transfer is accelerating. Now, under our present conditions, it's imperative we spend time condemning how these monopolistic capitalists are exploiting us instead of looking at Marx from 170 years ago and determining new ways to wrest the burden of these parasites from ourselves with new doctrine that considers our present state of affairs.
I feel as if the flaws of the labour theory of value are showing here. Yes, automation does remove value or effort created by a worker, but when it comes to goods which meet our basic needs these will always be in demand. The price isn’t completely determined by required labour so long as governments enforce their currency as the primary unit of exchange. Even if every necessary input in the process of production is fully automated, essentially making the product “free”, the capitalist has the power to and is incentivized to limit output to level prices out. This can be achieved through sufficient monopolization. The capitalist is incentivized to maintain profit in this way so that he can purchase products which have not yet been fully automated, or those of which whose prices have also artificially levelled in the same way. The capitalist is incentivized to collude in this way with his brethren by the time most processes are automating in order to maintain his “superior” social status.
The labour theory of value is flawed in that it aims to totalize the subjective measure of value in a single quantity. We treat labour as valuable, but other factors are in play as well, such as scarcity (artificial or not), and their essentiality. An orange when we are hungry has value regardless of the labour
of a product.
Obviously it's been a while since you commented this but Marx differentiates value, use-value, exchange-value, and price-- that value is determined by the amount of socially necessary labor time needed to produce a commodity doesn't mean the same is true for price; Marx goes into this at great length. Also, no, the value of an orange materializes only through the medium of exchange. Air, for example, is not a commodity because it isn't obtained through exchange and no labor goes into receiving it; the necessity of air (for all practical purposes) remains constant in human life, and it would only have value if human labor were required to bring it into your existence.
good video. But the music is annoying.
3:00 what? The machine is simply a slave (that you can extract surplus value from with minimum reproduction inputs of capital for maintenance etc) that replaces multiple workers. There is no need to assume that a machine diminishes the equivalent of surplus value, the surplus value taken from the worker is simply transferred to a higher level of surplus value extraction from the machine.
The falling rate of profits comes when the workers, who by necessity of capitalism need to be consumers, are put into new jobs and production overall increases, therefore causes a surplus and profits to fall OVERALL. This is why UBI is important, because rates of profits will fall if you don't add UBI with automation, but when you add UBI you are bo longer in the definition of "capitalism" technically because there is no surplus value extraction from the people, you replaced each ten people with one machine and gain the "surplus value" from that machine.
Get this metaphysical shit out of your head, it's the act of production that is creating the value, it doesn't matter if that if from a biological entity or a machine. The worker as a human doesn't magically create the value.
algorithm
Capitalism is fucked
the nature of competition leads every capitalist to exploit his/her workers more ( giving them bad wages to increase the amount of capital to invest in machinery ) so there is no freedom under capitalism for the workers to refuse this wage slavery conditions as capitalists tell us describing capitalism system 😂😂😂
In the end, competition results are not for the benefits of all humans but for specific ones ( the capitalists ) .
competition leads to economic crises where we workers pay for that by our taxes when the governments give them loans from our taxes to get basic needs we pay for something we are the reason for .
competition under capitalism is portrayed in the capitalists arguments to be good as commodities get cheaper but that leads to the destruction of commodities and chaos of production and the need to wage wars to save capitalist system by dinding new markets for the excess commodities no one can buy because of the competition nature the capitalists admire !!!!! .
in contrast capitalism is a sucky system full of contradictions , here comes the definition of socialism :
the public ownership of the means of production ( no exploitation and no inequality) , planning between production units so there will be no chaos of production and so no wars , no economic crises as there is no exploitation leads people not to buy the commodities .
this shows us that the problem of poverty is caused by the distribution of production not the amount of resources as capitalists liars tell us .
It seems like the analysis breaks down at high levels of automation.
When automation is simple enough, it can be counted as capital. As it gets more complicated, it seems like it would be interpreted as a slave. I can see replacing a human slave with an advanced robot and there would be no real difference to the capitalist.
Are slaves capable of creating surplus value? As humans it seems like they should, but as beings that are bought and maintained by the capitalist, it seems like they should count as capital.
Background music is creating noice , we are listening political economy, this is not film .... please remove music , request
This looks to me more like a demonstration of the failure of the labor theory of value. The capitalist, thinking only in terms of money, understands that he gets paid not by maximizing hours of unpaid labor, but by maintaining the gap between gross income and total costs. How those costs are divided between employing capital equipment and employing workers doesn't change the bottom line. What am I missing?
But that's all within the classical supply-demand theory, and has nothing to do with the labor theory of value. And as you suggest, real-world capitalists get around this, not only through marketing but by avoiding competition and by shifting investment among multiple product lines in different stages of maturity. I still don't see how Marx's version of this tells us anything interesting.
Isn't this just the Race to the Bottom?
This is the best accidental debunking of the labor theory of value, EVER!
Complete automation doesn't eliminate profit, therefore labor theory of value is baseless.
What the fuck are you talking about? The value is still generated by labor, but not human labor. (although there will likely be human labor needed to maintain the machines).
@@d3th2m3rikkka What the fuck are you talking about? The value with 100% automation would be part of the constant capital. This doesn't get counted into labor, because it isn't human labor. Even the upkeep cost of the machines weather done by humans or not, is still not labor, it is constant capital, by definition.
@@3jacen Ok, you're right about machine labor being constant capital but it doesn't mean the LTV is debunked.
"A third and final proof of the correctness of the labor theory of value is the proof by reduction to the absurd. It is, moreover, the most elegant and most “modern” of the proofs.
Imagine for a moment a society in which living human labor has completely disappeared, that is to say, a society in which all production has been 100 per cent automated. Of course, so long as we remain in the current intermediate stage, in which some labor is already completely automated, that is to say, a stage in which plants employing no workers exist alongside others in which human labor is still utilized, there is no special theoretical problem, since it is merely a question of the transfer of surplus value from one enterprise to another. It is an illustration of the law of equalization of the profit rate, which will be explored later on.
But let us imagine that this development has been pushed to its extreme and human labor has been completely eliminated from all forms of production and services. Can value continue to exist under these conditions? Can there be a society where nobody has an income but commodities continue to have a value and to be sold? Obviously such a situation would be absurd. A huge mass of products would be produced without this production creating any income, since no human being would be involved in this production. But someone would want to “sell” these products for which there were no longer any buyers!
It is obvious that the distribution of products in such a society would no longer be effected in the form of a sale of commodities and as a matter of fact selling would become all the more absurd because of the abundance produced by general automation.
Expressed another way, a society in which human labor would be totally eliminated from production, in the most general sense of the term, with services included, would be a society in which exchange value had also been eliminated. This proves the validity of the theory, for at the moment human labor disappears from production, value, too, disappears with it."
www.marxists.org/archive/mandel/1967/intromet/ch01.htm#s8
@@d3th2m3rikkka It is like you didn't read what I wrote, or watch the video. Not surprising considering your tactic is to just copy paste.
"Ok, you're right about machine labor being constant capital but it doesn't mean the LTV is debunked." It does mean that you fail to understand the basic ideas we are discussing, which is why you have to rely on stealing someone else's words.
@@3jacen I read what you wrote and watched the video. It's kind of hard to think clearly when I only got a couple of hours of sleep last night and have stuff to do. Copy pasting something to make a point might be "lazy" but I'm not going to spend half an hour writing a fucking essay in the comments section of a youtube video. What that man wrote represented my thoughts after I actually thought clearly about what you were saying. Your failure to refute what I copy pasted only shows how unwilling you are to actually looking at things that might change your opinion on the LTV. If you won't read the article, then there's really no point in continuing this conversation. I don't have time to argue with people who won't listen to my arguments and simply resort to saying I'm lazy for not writing 10 paragraphs on Marx in a youtube comments section.
Using math to explain imperialism
When production cost drop production tends to increase for most products because now there is more demand for the lower price, also many times companies will work for higher net income even if it is a lower profit ratio they still get overall more money, now of course there are exceptions to this with different products and different industries but that determined primarily by marginal utility, maginal productivity, and diminishing returns, all of this is explained by marginalism because labor value theory is wrong it is not labor but instead utility that guides value in prices, because the price is based on the subjective value placed by the consumer not the subjective value the worker places on their time and energy that only comes in the workers wage which is just part of the price, but if you do not find this argument convincing because of the subjective psychology then let us look at it in material terms a company automates its assembly making it take less time and energy to convert resources from a raw form to a more useful form this makes it to where there is less waste and other processes can now be more efficient leading to new possibilities for growth, what does it matter if the work is done by a meat machine (humans, other animals) or a metal machine, the same uses come from transforming resources, by the logic of the law of the tendency of the rate of profit to fall when the transition from domesticated animals to tractors would have led to mass starvation but instead it contributed to less more food being produced and population growth because more people could be fed, and yes farmers lost jobs to for the most part work in other industries that did not exist before, and yes there are still starving people even though we have the technology to support them all, but the point is from what I understand from history and markets this model of economics and human behavior is wrong.
Looks like innovation increases production, lowers cost, increases availability, which floods market and necessitates further innovation. There is not a perfection of automation of anything except theoretically. This video does not deal with the praxeological inevitability of a flooded market at all, and it presumes all persons who could purchase a product would and that they would continue to do so to the point that perfect automation would eventually be realized. A new better product would supplant the previous. Also Inputs would need to be dealt with in a finite world of finite resources.
Capitalism making good cheaper and cheaper doesn’t sound bad to me. If the capitalists profits fall that’s their problem. If the means of production is ever seized it’s best to wait until it’s all automated and the capitalists are no longer needed no? At that point they may not even care if there is no longer any profit to be made. At least if this theory is true. There wasn’t much rebuttal talked about. Just one and that was from a Marxist economist.
This is ridiculous. The reason capitalists automate is because automation is cheaper than labor and it creates more value than labor by itself. The profits would rise, not fall.
Wow Marx BTFO'd
What is value?
@@Runs-InCircles According to Marx value is the amount of human labor put into something. In the real world value is "the benefit provided by a good or service".
@@ArtisticLayman That's wrong but okay, in that case, why is gold more expensive than steel?
@@Runs-InCircles Gold is more rare than steel and it's used for currency, jewelry, computer parts, and other things.
@@ArtisticLayman That describes exchange value, the pricing of a commodity but notice that exchange value isn't all that exists. For example a diamond can have high exchange value but low use value whereas a car can have low exchange value and high use value.
What I'm asking is what is value in & of itself.
If we take 10 coats to be equal to 10 burgers or whatever the equivalent amount is in the real world then we can say that this amount is representing something that the two commodities share? You with me?
So this thing that value in itself is representing, the quantitative difference between "equal value" of commodity x (coats) & commodity z (hamburgers), what could that be?
Marx is confusing profit with interest.
if this were true, we would all still live in the forest
Look at how the life style of the Soviet Union, Communist China or Cuba fell. They never attained the stained of living of Europe and the USA. China had to adopt a form of Capitalism "with Chinese Characteristics" to escape Mao's Leninist policies with the subsequent poverty they brought. Now Cuba has modified Capitalism. No Socialist country can survive without a Black Market. There are fundamentals of falling living standards in Communist states. All communist states failed in economic competition with Capitalist countries using Leninist policies.
Economic output in communist countries is/was so low. We never saw a workers paradise or even the equivalent of lifestyle of the European middle class. However, Party Elites lived the good life. In China, all the men (there are NO women) in the Politburo, are billionaires (Mao would have killed they all). Those living at the top of the hierarchy (which never dissolved as Marx promised) have a good life. Economic mediocrity is the historical record of Socialism. Many believe that Worker Co-ops can produce Marx's unrealized promises. However, Worker Co-ops will always be under the control of the One Party state; Workers Co-ops will never run their own show. They will answer to the Dictatorship of the Proletariat.
What? Surely Rusia's standard of living went up a lot from being a feudal society to going to space in just 50 years. I'm also sure cuban people live a lot better now than in the times of Batista, even with all the US sanctions
[Citation Needed]
Worker cooperatives aren't under the control of the state.
@@alexredfield1943 Of course there were improvements. However, people went from one dictatorship to another dictatorship (but there was no "dictatorship of the proletariat"). These improvements came at the cost of the loss of all civil liberties. There is no loyal opposition in Communism. Dissent was and is a crime in Cuba.
@@alexredfield1943 Of course there were improvements. However, people went from one dictatorship to another dictatorship (but there was no "dictatorship of the proletariat"). These improvements came at the cost of the loss of all civil liberties. There is no loyal opposition in Communism. Dissent was and is a crime in Cuba.
This is a logical fallacy, because it uses the labour theory of value, which is in itself, a logical fallacy.
Please stop blinding yourself!
No it is not, but please, do what all the most brilliant economists have failed to do; disprove the labor theory of value. How is it a fallacy?
@@100Mmore When production cost drop production tends to increase for most products because now there is more demand for the lower price, also many times companies will work for higher net income even if it is a lower profit ratio they still get overall more money, now of course there are exceptions to this with different products and different industries but that determined primarily by marginal utility, maginal productivity, and diminishing returns, all of this is explained by marginalism because labor value theory is wrong it is not labor but instead utility that guides value in prices, because the price is based on the subjective value placed by the consumer not the subjective value the worker places on their time and energy that only comes in the workers wage which is just part of the price, but if you do not find this argument convincing because of the subjective psychology then let us look at it in material terms a company automates its assembly making it take less time and energy to convert resources from a raw form to a more useful form this makes it to where there is less waste and other processes can now be more efficient leading to new possibilities for growth, what does it matter if the work is done by a meat machine (humans, other animals) or a metal machine, the same uses come from transforming resources, by the logic of the law of the tendency of the rate of profit to fall when the transition from domesticated animals to tractors would have led to mass starvation but instead it contributed to less more food being produced and population growth because more people could be fed, and yes farmers lost jobs to for the most part work in other industries that did not exist before, and yes there are still starving people even though we have the technology to support them all, but the point is from what I understand from history and markets this model of economics and human behavior is wrong.
@@100Mmore it’s a fallacy because I don’t believe in it I am very smart