🎯 Main Thesis

Marx’s theory of The Tendency of the Rate of Profit to Fall (TRPF) reveals an inherent contradiction in capitalism: the very drive for innovation and efficiency that fuels it also leads to its decline in profitability over time—eventually becoming unsustainable.

🔧 Key Concepts Defined

1. Constant Capital: The value of means of production—machines, tools, raw materials, energy, etc.
2. Variable Capital: The value of human labor power purchased by the capitalist.
3. Surplus Value: The value created by laborers beyond what they are paid; this is the source of capitalist profit.

📐 Rate of Profit = Surplus Value / Total Capital Invested

📉 Marx’s Argument: The Falling Rate of Profit

1. Capitalists innovate to increase relative surplus value (make production cheaper/faster).
2. This leads to the replacement of labor with machinery (automation).
3. But only human labor creates surplus value.
4. So: less labor = less surplus value = lower profit, despite more efficient production.

This contradiction means capitalism contains a built-in “self-destruct” mechanism: chasing profit undermines the system’s ability to generate profit.

🔁 Counter-Tendencies (Factors That Delay or Reverse the Decline)

Marx and others identified counter-tendencies that may slow or temporarily reverse the falling rate:

• More intense exploitation of labor (longer hours, lower wages)
• Cheaper constant capital (tech/machinery becomes cheaper)