 I'm not doing anything new. I'm just new. I'm just examining this c for a moment. What is this c? This is the exchange value of the c-gods times the c-gods, okay? In other words Very simple. This is the unit value of a machine $1,000 One machine or two machines. So this is $2,000 if it were two machines $1,000 per machine times two machines is $2,000, okay? All right. First Marx provides an eloquent beautiful discussion Description of what's happening in capitalism of his day in volume one of capital, which I've assigned to you Which is that my goodness That's going up. I mean It's not the only one that notices this okay There are others as well, but can't the growth of capitalism From the 1750s all the way to the world after all its entire history, but 1750, you know To to 1850 this first industrial revolution then 1850 to World War one this this second industrial Revolution Marx captures the first part of it Is a robust expansion of machines That's mechanization And he describes quite eloquently how the division of labor and the specialization of task Change within factories as human beings get hooked up to these machines. I mean this That just goes up and therefore this pushes See up, okay, so C over C plus V rises In part because the quantity of machines goes up So question about that on the other hand It's also true that this falls The unit value of those machines fall so there's no there's a There's two different things going on as a result of the same process capitalist competition forces each and every capital to buy more machines In in the language of economics the capital labor ratio goes up steadily On the other hand the very competition that results from that rise in the capital labor ratio Cheapens the sea in you know iron and steel and machine-making and so forth etc which then means that The other part of the fraction is falling and hence this is pushing it down So some people in tradition say well this arrow always is going to exceed that arrow It's possible and any during any particular period that may occur, but it's also possible. It doesn't occur and this could be Going in that direction Okay, you can begin to think of the cheapening of seas which occurred throughout capitalist history to see the importance of this as Well as this might my point being here that this is being pushed in Two different directions as a result of this so the result Is a bit ambiguous in terms of what's happening to this this this index of these two different forces, okay You got to add to this The V. Let me just do this So the V over here is the exchange value per unit use value of the V goods times This is the real wage part of it Okay, this is the unit value Well the history of capitalism is a fall in this Can you think of any industry in which the V goods have fallen more than agriculture? There is a massive wage-good industry in which there's been a steady rise in the productivity of labor due to mechanization With the result of yes a falling rate of profit for farmers Resulting in the United States had the state having intervened the state of those farmers, but also cheaper food Okay, so the price of food in the states the unit value of food falls on the other hand I'm gonna do what I just did over here The real wage goes up in the states. There's no hand, but you that is up until recently in the 1980s For as long as we've had data in the states the real wage of workers rises steadily Now you can ask the question is it possible for this to outweigh this for sure. It's possible if this outweigh this That the V would rise the rate of exploitation would fall and that would dampen the rate of profit I think it's it's an argument one can make in the United States. It hasn't gone like that This is outweigh this and hence the V has been pushed down and the S over V has gone up But you might ask let's go back here. You might ask look In our language what over determines this well everything over determines the use of machines okay competition Shapes it credit shapes it knowledge shapes it There are many many over determinants and I think all those forces together. I think the argument of people is quite correct is that the Capital labor ratio rises because the K rises rises rises There's no I don't have any question about that, but that also means the possibility of robust cheapening of C Let's go over here What over determines this well lots of stuff unions shape that the culture Shapes that you know the the culture in the United States of that you In order to be successful you have to consume or the consumerist culture that we have in the States pushes this up unions push it up and so forth Label market pushes this up no question about that. Is it possible that this could outweigh this yes But I think the argument here is that the capitalism itself produces such robust competition that it pushes this down So I think on net this goes up and I'm a bit I Am uncertain on this side. What's going on? So you know in terms of the seed because yes, this is very robust, but this is going up I'm not sure so I think that the total impact on the rate of profit Is that in any particular moment? I don't want to lose it in any particular moment to go back to our Pistemology a capitalist can produce a thought concrete In a particular moment showing in that thought concrete that one of these forces outweighs the other So at any particular moment the capital the Marxist can intervene produces an understanding of the economy in which let's say This is going up so dramatically During Marx's day that it's outweighing everything else in the economy So the net effect is a falling rate of profit and then the possibility of recession For sure. I have no art. No problem with that kind of argument. Okay but I think it's problematic to be to argue that It's necessarily the result through always that the rate of profit will inevitably fall because of you know What I just showed you I think it a a more Appropriate analysis on this is the rate of profit exists like everything else in Contradiction although at any moment someone can produce a theory You know theoretical result that's going up or going down or whatever. Okay, so we have the result here That it's possible for the cheapening of sea possible To offset the tendency for the rate of profit to fall so the rate of profit doesn't and the capitalist competition I'm sorry then capitalist expansion continues. So you get you get to I don't want to lose it now. You got two results here, okay for this foot marks is showing in this craziness of capitalism these ups and downs that we experience on one hand capitalist competition Results or propels the economy into a recession. Why because each and every capitalist and each and every industry is Increasing its composition of capital and that's driving that rate of profit down on the other hand This offsetting tendency is the very driving down of the of the rate of profit is also a driving down of unit value of these Goods the C and V which is pushing the rate of profit up. So the economy, which is the totality of these different movements the rate of profit in the economy Which is the rate of profit in the C industry and the rate of profit in the V industry So I got to wait these two things because then you they may not have the same weight in the total economy if I take the surplus value as a proportion of the total value added Here so this would be in the C industry this would be in the V industry The V industry The C industry so I'm just waiting them by their surplus values the total This is the total value added by the workers Then I have the following in this kind of weighted average I have these things being pushed down and pushed up pushed down pushed up and therefore The rate of profit in the economy Exists in contradiction it exists being pushed in different directions. So to conclusion that which we think is a wonderful Machine capitalism capable of delivering vast wealth absolutely is a machine according to this which is out of control It's the machine at automobile. That's nothing governing it. There's no governor on it. It's a machine that can veer into Expansion wonderful euphoria it can a machine that can vary into to contraction depression it's a machine that is Suffering in this this bipolar way from this euphoria and this Recession that's not a happy machine in which human beings might want to live. That's the second criticism of marks of capitalism the first one being class exploitation and the second one being it's really out of control Let me stop there and I will see you next time