This is a concise answer I found online, but it only confuses me more.
“Because profit can only come from human labour, as more and more capitalists invest in the new machinery the average labour time required to produce each commodity falls. This is what makes the rate of profit fall, as the ratio of surplus value to investment falls across the whole system.”
My understanding of this paragraph is that as machines play more and more a role in production less human labor is needed to produce the commodity, but I dont get how that lowers profit. My first thought it, don’t machines allow more money to be made? As capitalism develops we are reaching a point where 90%+ jobs in some industries will be replaced by machines, needing less people and less overall investment for the profits you’re getting. The entire reason is that it makes more profits right? Employers at least in the US save a ton just from not needing to pay for employees healthcare and other benefits, there are a lot of incentives in replacing people with machines.
I am sure these questions sound totally moronic to you comrades who have read capital volume three, but I hope you can see where I’m coming from and let me know what I’m getting wrong. I would really like to understand this, but it’s pretty intimidating to get into and wrap my head around some of this stuff. Thanks guys.
Some good answers already. I’ll just add that it may help to remember that value is a reflection of the socially necessary labour time embodied in a commodity.
As technology decreases production time, it takes less socially necessary labour time to produce any given commodity, which means that commodities come to embody less and less value.
Generally, the less value in a commodity, the lower it’s price (although value =/= price).
Capitalists have some power to protect themselves against falling prices (i.e. the tendency for the rate of profit to fall). We’re seeing this now across the world with price increases. They just call it inflation and blame it on war. (It may have been on here, but I saw last week that 100 years ago, the return for $1 invested in fossil fuels was something like $100; today it’s closer to $1:$1 or $1:$4.) Or they outsource work to lower wages. As well as stealing resources to get them cheaper than their market rate, as @cfgaussian said.
Edit: edited for clarity