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Cake day: June 20th, 2025

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  • The reduction labor time leading to a reduction in prices is necessary for the theory. The reason is that the numbers given in your example are arbitrary, there could just as easily be a machine that will produce 30 widgets/day, making costs $16 and revenue $90, for a profit of $74, and a rate of profit of 7.4% per day. But increased mechanization will always cause the rate of profit to lower, and this is because the price of the widgets will drop according to the labor theory of value. So the LTV is still a necessary part for understanding the falling rate of profit