Degrowth and the falling rate of profit

Why is degrowth wrong from a Marxist perspective? Let me explain with the fractions below.

73/105 (69%), 55/74 (74%), 39/49 (80%), 21/23 (91%), 13/10 (130%)

Anyone trained in Marxist economics should recognize this immediately. For the uninitiated (and don’t worry Marxism isn’t exactly a badge of honor anymore) these are hypothetical ratios for either the rate of surplus value or the rate of profit. It doesn’t matter which one, both make the same point.

In Marxist economics, value is comprised of three parts: constant capital (c), variable capital (v), and surplus value (s) for the formula

C = s +c +v

Constant capital (or fixed capital) is machines, technology, and PPE.

Variable capital is the amount of compensation to workers

And surplus is the additional value created via the labor process.

The rate of surplus value ie the degree of exploitation is calculated as the ratio of s/v, that is how much new value is made over and above the level of worker compensation.

The rate of profit is the ratio between surplus and constant capital, or s/c.

Now reconsider the fractions above. When the denominator s rises relative to the numerator c (or v) it means more exploitation and more profit for the capitalist. This is true regardless of the size of the total capital.

In fact smaller capitals tend to yield higher rates of profit and be more exploitative because they are easier to reproduce and require less fixed capital investment (in Marxist terms they have lower organic composition of capital).

Why does this definitively prove degrowth wrong to the point that the whole issue should have been put to rest decades ago?

Because degrowthers want to reduce the size of the fraction without addressing what’s really important, the ratio. And moreover the fact that the rate of profit especially in fact tends to fall as the size of capital increases.

Conversely, reducing the size of the stock of capital, or the denominator c, under capitalist relations in fact simply increases exploitation and raises the rate of profit!

So what the real solution to the degrowth trap? From the perspective of the falling rate of profit, it logically follows that it would be to reduce the size of (s) and raise that of (c) especially in proportion to each other. In other words it means very simply mechanization and rising wages. More specifically this means an increased power of labor (over production as well as political power) alongside mechanization that is subject to the rational planned control of workers (ie operates toward meeting real need rather than just profit).

This and only this would reduce the rate of profit to unsustainable levels in contrast to degrowth which in its current form will only simply raise it through increased worker exploration and impoverishment.

The ruling class as a matter of fact has already long ago grasped this and have thus embraced degrowth as their most recent iteration of Malthusian depopulation policies.