Tendency of the rate of profit to fall

[Karl Marx's Camel]

Do you agree with the existence of such a tendency?

[blueeyedboy]

Do you mean that the goods been produced lose their value?

If so, then I think the profit would fall, but take what I say with a pinch of salt, because I'm only a beginner on the economic side of things.

The reason I think this is that capitalists have to provide what people want, and when they want it. If the goods been produced are not wanted by the consumer society, then the profit would fall, I think. The key for a capitalist is to always always always maximise profits, and they usually are able to regain control, even when the rate of profits fall. This is probably due to more exploitation, like they don't do enough already, and some clever deals and what not.

Like I said, there will defenitely be other people on this site that are more knowledgeable than me, so basically read my reply if you want. If it sounds stupid, then don't read it all lol.

[rouchambeau]

I will when I see proof for it.

[ComradeRed]

Originally posted by NWOG@Oct 16 2006, 05:09 AM
Do you agree with the existence of such a tendency?

Well, let the ratio of goods exchangeable for one another be defined as value (as extensively covered in Das Kapital, vol. I, Chapter 1).

Let the set of numbers defined by the infinite summation:
SUM^{infinity}_{n=0} L_{a_{n}} w (1+r)^{n} = X
for every industry sectory. The summation converges to some arbitrary number, and the ratio of these numbers are equal to the value of the good (by the definition of value).

As t->infinity, L_{a_{n}} -> 0, and the arbitrary number (which is actually the sum of the dated labor inputs into the commodity) remains constant. As more goods are created, the value of the goods, represented as V, V->0.

(Note on symbols: w = wage as a fraction of the surplus, r = rate of profit, L_{a_{n}} = Labor input to the a-sector in the economy in the n-th year as a fraction of the whole labor market.)

This supposes that innovation is constant in the capitalist mode of production.