The Trend of a Falling Rate of Profit
The current mode of production, based
on private ownership of the means of production
and the aim to seize
for private gain the added-value workers produce,
holds within it the
trend of a falling rate of profit arising from the
application of
science to methods of work and production called
productivity.
The ratio between the total investment and the
number of
workers necessary during production determines in
broad measure the
rate of profit. The rate of profit under the
current mode of production
is constantly depressed by ever-increasing amounts
of invested value
necessary to activate workers.
As the number of
workers in production falls with the development
of the productive
forces, such as with the use of robots and
Artificial Intelligence
(AI), the rate of profit from the total investment
declines. This
growth in productivity is a double-edged sword for
the oligarchs. It
allows them to compete and possibly wipe out their
competitors but it
brings with it a falling rate of profit.
The rate
of profit is expressed as a ratio in social
product between the old
value to new value or more specifically between
the added-value the
current workers produce and the sum of their
reproduced-value (wages,
benefits and social programs) and the
transferred-value from fixed
value (buildings and machinery etc) and
circulating value (consumed
energy and material etc). Profit is derived from
the new value workers
produce, specifically the added-value. Profit does
not come from the
fixed and circulating value transferred into
production from already
produced value.
Phenomenal amounts of investment
are needed to set in motion the workers who
produce the new value the
oligarchs crave. The rich have long sought ways to
overcome this trend
of a falling rate of profit. Instead of investing
in the productive
economy, they have gone increasingly into the
parasitism and decay of
selling and reselling already produced value, into
stock markets and
commodity markets, and into Ponzi-type schemes to
bilk small investors
of the wealth they hold.
The other dominant way is
to have governments pay the rich through public
investments in their
enterprises or through contracts for social
product at inflated prices.
No major investment in the economy of any type
occurs without
governments participating through handouts, tax
exemptions, the use of
public infrastructure for the big enterprises at
preferred rates and
other pay-the-rich schemes, such as public-private
partnerships,
buyouts similar to the Trudeau government purchase
of the Trans
Mountain pipeline from the monopoly Kinder Morgan
or other schemes.
The concentration of wealth and power in fewer
hands and their
control of governments, coupled with the trend of
a falling rate of
profit, have meant that the mode of production has
become one of paying
the rich. All major investments include payments
to the rich from the
collective wealth held by the state. No investment
of any size proceeds
without government guarantees of state payments to
the rich. No
decision in politics or economic affairs is made
without the
consideration of the rich oligarchs in control.
Objectively,
this situation indicates that the rich oligarchs
have become
superfluous and have no reason to be involved in
the economy. The
economy is socialized. The actual producers, the
working class, must
become the owners and directors of the already
socialized and
interrelated economy so that the power of its
productive forces can be
organized and unleashed to build the nation and
serve the people and
society without interruption, crises and war.
The
current mode of production based on private
property has run its course
and must give way to the New where the actual
producers, the working
class and its allies who produce the wealth, are
in control and set
their own aim for the economy and society in
conformity with the
already socialized economy and its needs and those
of the people.
This article was published in
Volume 50 Number 34 - September 12, 2020
Article Link:
The Trend of a Falling Rate of Profit
Website: www.cpcml.ca
Email: editor@cpcml.ca
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