As a global mode of production based on class domination, capitalism depends on the extraction of surplus value from a subordinated class, the world working class, which is the pool from which profits, interest, rent, dividends, and other forms of this surplus are taken. As one of its most basic features, corporations in different countries mechanize their operations to raise their profit rate by increasing labor productivity. As these techniques become generalized, the relative advantage for their early adopters dries up, and a new productivity norm becomes the rate at which businesses must produce to remain competitive. The drive for a new breakthrough in productivity begins. Enormous amounts of profit are produced and realized during this process while deleting workers from itâthat is, by getting rid of the real source of profit, labor power. As a result, even as individual corporations rake in more money through investing in machinery, the average rate of profit for all producers declines. The longer this goes on, the lower profitability becomes, reducing the level of investment and further intensifying the pressures of competition.
Jamie Merchant, The Economic Consequences of Neo-Keynesianism
