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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?

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  • $\begingroup$ "machines can only create things that have less value than the machine itself" - so a digging machine made of iron must stop once it's dug up as much iron as the machine is worth? $\endgroup$
    – user253751
    Oct 20 '20 at 11:15
  • $\begingroup$ Common sense says that value (e.g. tomatoes) comes from people doing work (i.e. labour) with machines. The machines by themselves are useless and the people by themselves are very slow. $\endgroup$
    – user253751
    Oct 20 '20 at 11:16
  • $\begingroup$ If self-replicating machines were developed, some interesting issues could come up with respect to this question (at least from the perspective of science fiction scenarios). $\endgroup$ Oct 20 '20 at 12:39
  • $\begingroup$ Machines add their own value, they don't create value. $\endgroup$
    – user117640
    Oct 20 '20 at 12:47
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    $\begingroup$ What is the difference between "creating" and merely "adding" value? $\endgroup$
    – user2852
    Oct 20 '20 at 15:30
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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.

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  • $\begingroup$ I know that mainstream economics reject Marx, but modern economic theory has been proven wrong a thousand times, it's ideology and it doesn't describe anything. We need heterodox approaches, not ideology. $\endgroup$
    – user117640
    Oct 20 '20 at 9:32
  • $\begingroup$ Can you give examples of it being proved wrong? (preferably something recent). $\endgroup$
    – user161005
    Oct 20 '20 at 10:28
  • $\begingroup$ @user161005 don't let yourself get baited, I made a mistake answering this question. I presumed good faith since that is what CoC tells us to do so, and before I answered there wasn't the obvious red flag with clearly unfounded reference to thermodynamics but clearly in this case I was mistaken. Have a look at this meta post about how to deal with these sort of situations. $\endgroup$
    – 1muflon1
    Oct 20 '20 at 10:32
  • $\begingroup$ You can't create machines that run forever. Look up the wikipedia article about perpetuum mobile. And stop crying because I found this answer irrelevant, because it's about the ideas of Marx, not about neoclassical economics. Neoclassical economics doesn't describe reality, for example it doesn't take production and labour into account, money is only a help for calculation and the theory is static only. $\endgroup$
    – user117640
    Oct 20 '20 at 11:24
  • $\begingroup$ @user117640 You are confusing value and energy. Those aren't the same thing. $\endgroup$
    – user253751
    Oct 20 '20 at 16:54

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