The progressive tendency of the general rate of profit to…
““The progressive tendency of the general rate of profit to fall is, therefore, just an expression peculiar to the capitalist mode of production of the progressive development of the social productivity of labour. This does not mean to say that the rate of profit may not fall temporarily for other reasons. But proceeding from the nature of the capitalist mode of production, it is thereby proved a logical necessity that in its development the general average rate of surplus-value must express itself in a falling general rate of profit. Since the mass of the employed living labour is continually on the decline as compared to the mass of materialised labour set in motion by it, i.e., to the productively consumed means of production, it follows that the portion of living labour, unpaid and congealed in surplus-value, must also be continually on the decrease compared to the amount of value represented by the invested total capital. Since the ratio of the mass of surplus-value to the value of the invested total capital forms the rate of profit, this rate must constantly fall.””
About This Quote
This interpretation was drafted with AI assistance. It is one reading of the quote, not the author's own explanation.
The tendency of profit rates to fall is a structural result of capitalism’s drive to increase productivity, which reduces the proportion of living labor relative to capital.
In simple terms: Capitalism’s productivity growth lowers profit rates over time.
Key Takeaway
Recognize structural limits of profit in capitalist economies.
Themes
economics
capitalism
profit
productivity
labor
capital
Mood
analytical
critical
academic
Type
theoretical
economic
philosophical
When to use this quote
- business strategy
- investment analysis
- policy making
- academic study
Key Concepts
Marxist theory
rate of profit
surplus value
Questions to Reflect On
- How does technological advancement affect profit margins?
- Can policy mitigate the falling profit tendency?
A Different Perspective
Profit rates can be temporarily boosted by external factors, but the long‑term trend remains downward.