Awesome! The next steps are looking at how capitalism fights this. Capital either seeks new markets, ie new inventions to flood with capital or geographically new markets, or it seeks to establish monopoly. The former allows for greater profits in absolute terms, the latter temporarily raises the rate of profit. The natural consequence is imperialism, where this is combined by having financial capital dominate the global south, super-exploiting labor for super-profits, and via unequal exchange, where technology and tech development is kept in the global north and thus monopoly prices are charged.

This is also why south-south trade is the path to escape underdevelopment, and is why China in particular has been a progressive force for the global south, as they don't withold tech knowledge but instead share it through cooperation and trade. China also doesn't charge the same monopoly prices for tech, which is why global south countries are seeing huge electrification, expansions in EVs, etc.

The west used to have a monopoly on cutting edge tech, they witheld the technology used for creating firearms from African countries for hundreds of years while selectively trading firearms in limited quantities for huge amounts of slaves, as an example. The west forces the global south to rely on them, and forces them into remaining at lower levels of industrial development and refinement. It's also why countries like the Sahel States are working towards cutting unrefined gold exports and upping refined gold exports, ie moving from unfinished raw materials into more finished goods or ancillary materials, and why porkie is terrified of them.

It isn't that goods further along in the commodity production process have more valuable labor time at the higher end, it's that the upper end of the production chain is easier to keep a tech and skill monopoly on. This is what liberals mean by "higher value add" industries, made more naked through Marxist analysis.

This is actually going deeper than is necessary. Suppose you have a business that requires spending $100 to buy a building in which workers can labor, such that you can hire 4 workers to produce 1 widget each per day at a pay rate of $1/day, with materials costs of $0.50/widget, and you can sell each widget for $3. Your rate of profit (and the rate part is key, as we'll see in a moment) is 6% per day, since you earn $6 profit on an initial capital investment of $100.

Now, suppose you get a chance to build some robots within that building that will massively reduce labor costs: for another $900, you can set up your building so that it produces 20 widgets per day and only requires one worker. You're now spending only $1 + (20*$0.50)=$11 per day, and raking in $60, for a profit of $49/day, much more than before. But your rate of profit is 4.9% on your $1000 investment, a reduction from the previous 6%. The extra step of prices going down according to the reduction in socially necessary labor time (which may not actually happen under the monopoly conditions toward which capitalism tends) is not necessary for the rate of profit to fall.

Nice!

What really made it click for me (and surprisingly few others in the profession) is that as a civil engineer, today’s technology allows me to do the work in a day that would take a team a week a few decades ago (e.g. drafting, gis, digitized plan sets, etc). But wages have overall been relatively driven down- especially in civil engineering - where tasks are more akin to “labor” tasks (analyzing, drafting and preparing a plan set using hardware and software owned by a company), vs “professional/managerial” (project management, supervisory). But the majority of engineers still view themselves as “professional/managerial” and thus are resistant to collective action.

::: spoiler Boring engineering profit analysis When one prepares a “bid estimate” for the number of hours they’ll work, it gets multiplied by an hourly rate and a “markup”. If an engineer is curious enough (and few are, unfortunately) they can back calculate what they “bill” (ie what the company gets paid) vs what’s received by them in compensation (wage and benefits). And then can compare that to the “billable rate” of, for instance their supervisor, and see that those who work the most hours and actually “produce” work are compensated the least (eg drafters/techs, early careerists, surveyors). But yet the primary thing that the managerial and overall corporate structure provides are access to the tools (drafting software, gis, survey equipment), professional insurance/counsel, and health insurance that are otherwise cost prohibitive to the engineer to acquire if they’d perform their own work. However the managerial/corporate structure do not actually produce any of the “products” that the company actually sells.

And so if, due to tech advancements, a staff member performs the work of 5 staff (ie produces 5x the deliverables or at 5x the pace), then it would follow that the company would see >5x the profit because of that efficiency. However, profits are driven down by “low bid” systems and generally underfunded infrastructure, and so engineers are tasked with doing more and more with the same tools.

So the increase in efficiency of the tools, while maintaining a “presentable” profit margin for the company, ultimately presents minimal benefit to the laborer who does not themselves own the tools. And when the market tightens (as it has been and increasingly so since Covid, and will increase further due to climate change combined with aged infrastructure) these profits continue to fall for the companies and in order to maintain a “presentable” profit margin management tasks labor to produce more still and use “magic silver efficiency bullets” like “AI” to try and pick up the slack.

But ultimately none of these fix the systemic issue of a lack of public funding. The lack of funding stems from a reduced tax income from an overdrawn tax base (since most taxpayers are also on the receiving end of capitalism) not wanting to raise taxes to support infrastructure which does not benefit them directly, and capital does not want to spend any of its profit on maintenance and replacement. :::

And so bottom line - profit is extracted from the labor of workers and siphoned to owners - owners do not reinvest this profit into the society and create nothing of value themselves - and so as capital consumes itself and runs out of ways to exploit the workers the profit inevitably falls.

And as that falls far enough - it becomes socialism v barbarism - either abolishing capitalism or oppressing workers to a precarious enough position where they can be exploited and further profit can be squeezed from them (eg prison, deportation/“citizenship”, un-abortable pregnancy, etc).

Due to competition, companies must lower their prices when production costs decline. If they don’t, they risk a significant loss of market share or even bankruptcy when competitors cut their prices in response to reduced production costs. As a result, the amount of surplus value (profit) created per dollar of capital invested, the rate of profit, necessarily falls as well. The reality is that productivity increases under capitalism produce a tendency for the general rate of profit to fall.

This part isn't necessarily a given though, what seems to happen more often now is that one company buys the other so they don't have to lower their prices. :/