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The standard Marxist theory of the falling rate of profit rests on the notion that there is an upper bound to the rate of exploitation. That bound is both political and physical, political because the capitalist mode of production unintentionally increases the potential political power of workers, and physical because exploitation of the workforce must, in the long run, be conducted at a level that permits the reproduction of the working class. (OK, that last is quasi-physical since, as Marx notes, the level of consumption required for reproduction varies from place to place, but capitalism raises this level of consumption needed for reproduction, thereby making the quasi-physical limit more stringent, not less). In mainstream economics, these kind of limits get taken up in discussions of the efficiency wage.
The problem with Marx's argument is the assumption that investment in constant capital only reproduces value, which is doubly nonsense, partly due to the incoherence of the notion of value... ^^^^^^^ CB: If the notion of value is incoherent, how are you defining "exploitation" and "rate of exploitation in your previous paragraph ?
^^^^^ [NB - I won't respond to any of the objections this may elicit]
^^^^ CB: giggles