What is the Tendency of the Rate of Profit to Fall?

Here’s a quick intro by me on TRPF theory, “Tendency of the Rate of Profit to Fall”.

The value of an item is tied to the amount of labor required to produce that item. Innovations in technology reduce the amount of human labor per widget, which initially increases profit by producing far more widgets per worker per time period. But over time, profit rate falls because the market corrects around the cheapness of producing the widget, as competitors undercut their competition because their costs have dropped.

Capitalists will continue to pretend that labor isn’t value, because they don’t want workers to realize their labor is valuable. Bourgeois economists are invested in doing the same. But they all know it’s a lie, because they know what happens when technology erodes profit margins by decreasing labor.

The tendency of the rate of profit to fall is a major reason for Capitalism’s eventual self-immolation, and we’re living in such a period. The recent price-gouging of mid-2023 until recently (Amazon Fresh wanted $50 for 100 sugar cubes a month ago) has started to trend back into price slashes because people simply stopped buying things. You can observe Capitalists trying to fine-tune their way back to max profits that consumers will still pay for.

It’s not accurate to say that “labor creates all value”, but it would be accurate to say that “labor enables all value” because while natural resources have theoretical inherent value from their productive potential, somebody ultimately has to farm them, mine them, refine them, shape them, smelt them, etc. It is the difference between potential energy and kinetic energy. The devaluation or erasure of labor is called “Commodity Fetishism” in Marx.

The value of natural resources is why Capitalists create empires and settler states, to “enclose the commons”, IE steal nature’s bounty and land by force so they can sell it’s produce back to us, and also create a force of cheap or free labor at gunpoint. That’s why workers must use force to seize the commons back for the good of all, there is no other liberation without doing that.

Another fun way you can watch Capitalist scum squirming under the falling rate of profit is hipster bullshit. The attached video is satire, but only just: it fetishizes manual labor in order to claw back profits lost to technological innovation.