[Marxism] Why does the rate of profit have a tendency to fall ?

[Charles Brown <cdb1003@xxxxxxxxxxx>]

> >> Perhaps we can get an understanding of the issues on this thread  by
> 
> imagining Waistline's totally robotized or automated factory.
> 
> >> As Walter Reuther said (to Ford ?) if automobile production is  100%
> 
> robotized, then who will buy the cars produced ? This refers to a  zero
> profit realization problem for capitalists when there is  zero
> consumption. If workers aren't paid anything the masses are  in
> absolute poverty and absolutely restricted consumption, and they  can't
> buy anything. So, the capitalists have zero realized  profit.<<<
> 
> Comment
> 
> Autoworkers did not buy 17  million vehicles a year in the American market,
> each year between 2001 - 2007.  

^^^^^^^^
CB: That's right. You have to think about all the other industries, and the 
workers in all those industries. Pile up the 17 million cars, millions of 
television sets, millions of computers, millions of tables, chairs, coats, 
hats, shoes, bicycles, widgets, wodgets,  etc, etc, etc. , all the commodities 
of all types. If they are all made by robots then there is nobody to buy any of 
them. 100% overproduction.
 Similarly, if they are made by exploited human workers, all of the workers in 
all of the industries don't have enough money to buy all that they make. If the 
rate of exploitation is 50% average overall ( I think it's rate of 
exploitation; have to look back at _Capital_ I) , they can buy half of what 
they make.  The capitalists pay themselves big bucks, but since these are 
personal consumption goods, the few capitalists aren't going to buy half the 17 
million cars. So, there is overproduction of a large fraction of the total 
produced in the sense that a large fraction of what is produced in personal 
consumption goods won't be bought (consumed; underconsumed). Overproduction and 
underconsumption are two sides of the same coin. The impact of 
overproduction/underconsumption on profit is that the surplus exploited from 
the workers can't be realized, because not all the commodities produced can be 
bought, because of what I said above. This UNDERREALIZATION
 causes the rate of profit to fall, but it is not the FROP.
The FROP comes in in a different way through the increase in the organic 
composition of capital (OCC), overaccumulation of constant capital. Constant 
capital - means of production, instruments of production , factory buildings 
and machines- is not a source of new value, and therefore not  a source of 
surplus value. The value added to commodities by constant capital is limited to 
the value "in it" from the labor of workers in the departments of the economy 
that produce means of production. Above we are discussing the department of the 
economy that produces means of personal consumption. As machines are used they, 
little by little add the value in them to the commodities produced by the 
machines. But none of this is a source of profit for the capitalist. The 
capitalist in the department of personal consumption pays the capitalist in the 
department producing means of production fully for the means of production, 
machines, etc. bought. For the car
 producing capitalist, the machines and factory building are not sources of 
profit. Only the auto workers are sources of profit.
So, the smaller and smaller the variable capital component, the workers 
component of the auto capitalists' total capital, the higher the organic 
composition, the smaller and smaller the source of surplus value/profit. This 
is why the higher and higher the organic composition of the total capital, 
there  is a TENDENCY OF THE RATE OF PROFIT TO FALL, S artesian's favorite fact 
,and it is a fact, don't get me wrong. But the rising OCC is not the only 
source of the tendency of the rate of profit to fall. The underealization 
mentioned above is also a reason for the rate of profit to fall, the rate of 
realized profit falls.  The rising OCC causes the rate of profit to fall 
because of the shrinking proportion of variable capital or shrinking source of 
surplus value in the total. The underrealization aspect causes the rate of 
profit to fall because less profit is realized ,even though it was 
theoretically produced as surplus value. We might say it is inchoate
 surplus value ( there's a legal term for you S artesian, "inchoate")
And S artesian is also correct that it is the falling rate of profit that 
directly causes the capitalists to start a recession by "destroying" capital, 
closing plants or underusing plants . Can't destroy constant capital without 
destroying variable capital. Can't close a plant without laying off 
workers. But the purpose of closing the plant is to disgorge of the constant 
capital which is not a source of surplus value or profit. The capitalists don't 
close the plant because they think "oh the workers don't have enough money, are 
poor, and there consumption is restricted "( as in the infamous one and only 
one quote from Marx), but that is one of the underlying causes of the profit 
rate falling , the rate of profit realized falling because the mass consumer , 
the other hat the worker wears, can't consume all that they produce, because 
they aren't paid enough to consume all they produce , because a part is 
exploited from them. Of course, the capitalists
 don't say "pay or give them more money"  Be we, the Communists _do_ say this 
as a reform demand.  That's why it is important for us to raise the "poverty 
and restricted consumption of the msses" in our propaganda. Leave it to the 
capitalists to cry about their falling rate of profit.
> 
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