Can machines create value?

Question

Marx wrote that only humans can create value. But why is that so? Ok humans can, with their work, create more value than they need to consume in food and so on, that's obvious. But why is this so important? There has to be a physical explaination as to why they can create much more value than they need to supply themselves. How efficient is the human body in energy creation?

Another thing can comes to my mind is that everyone talks about that in a few years, everything will be automated and there will be no jobs left.

But if everything is done by machines, then there can't be profit. Because machines can only create things that have less value than the machine itself., otherwise you would have an perpetuum mobile, which is according to the laws of thermodynanics impossible. Ok it depends of course on demand. If demand is very high, then you can make profit, but assuming that there is equilibrium of supply and demand, then you always make a loss if you only produce with machines.

Has anyone every recognized that fact? If everything is automated, then capitalism will abolish itself. How can there be profit if everything is automated? Why does no one see this?

Answer 1

Modern economists believe that machines can create value. The reason why Marx thought that machines cannot create value is that he subscribed to classical notion of labor theory of value (LTV). Labor theory of value is an objective theory of value that postulates that all value is determined by labor inputs (see the Durlauf & Blume 2008 entry in the Palgrave dictionary of economics for more on LTV).

However, current mainstream economic thinking rejects LTV in favor of the subjective theory of value precisely because LTV is empirically inconsistent with valuations that we observe. Subjective theory of value postulates that value is subjective and in the eye of the beholder as in subjective theory of value value depends on marginal utility of particular person. Under subjective theory of value even object with no labor content can have value (see the Durlauf and Blume entry (2008) on utility, and on utility and decision theory and sources cited therein - this concept is also discussed in virtually any contemporary textbook so you can learn more also from there).

Marx also thought that profit comes from exploitation of labor but modern economists do not accept that view so, yes economists do realize that profit can be made from capital alone. Profit by definition total revenue minus total cost $\Pi = TR-TC$ and there is no reason to assume that fully automated firm could not have higher revenue than cost.

Lastly, capitalism in economics is poorly defined. In most economic textbooks you wont even find the word capitalism printed. Since the term lacks proper definition there is not much to discuss about it without first defining it.