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.
In case the explanation i gave in my other comment is unclear or insufficient, here is how this (Trotskyist) website explains it:
https://socialistworker.co.uk/socialist-review-archive/what-tendency-rate-profit-fall/
"The first capitalist who invests in new machinery can make large amounts of profit because initially they undercut other capitalists.
But as every capitalist starts to buy the new machines the first capitalist loses this advantage.
On the face of it this can seem very beneficial […] But commodities don’t only embody constant and variable capital. They also embody the surplus value that the capitalist can only extract from workers.
[…] 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."