Yet the only source of value and surplus value for the system as a whole is labour. So if investment grows more rapidly than the labour force, it must also grow more rapidly than the creation of new value, and profit comes from this. In short, capital investment grows more rapidly than the source of profit. As a consequence, there will be a downward pressure for the ratio of profit to investment-on the rate of profit.
The reason for the growth of investment is competition-the need of each capitalist to push for greater productivity in order to stay ahead of competitors. But however much competition may compel the individual capitalist to take part in this process, from the point of view of the capitalist class as a whole it is disastrous. For, as we saw in the previous chapter, capitalists measure the success or failure of their undertakings not in terms of the total profit they bring in but in terms of the rate of profit.
Two objections are often raised to this picture of Marx's. The first is that technological advance does not always involve increasing the ratio of means of production to workers-that it can be "capital saving" rather than "capital intensive". If scientific knowledge is progressing and being applied as new technologies, then some of these technologies may employ less machinery and raw materials per worker than old technologies. At any one time there will be some new technologies that are capital-saving.
This is true. But it does not refute Marx. For there are likely to be a greater number of "capital intensive" rather than "capital saving" innovations. At any given level of scientific and technical knowledge some innovations may indeed be capital-saving. But when all these have been employed, there will still be other innovations (or at least capitalists will suspect there are other innovations) to be obtained only by increasing the level of investment in means of production. The fact that some technical progress can take place without any rise in the ratio of capital to labour does not mean that all the advantages of technical progress can be gained without such a rise. If an individual capitalist can increase the ratio of capital to workers he will be able to invest in and take advantage of innovations that need more capital as well as those that do not. If he cannot increase this ratio then he will benefit only from those innovations that do not-and he will lose out in competition with those who can. Since, in theory at least, there is no limit to the possible increase in the ratio of means of production to workers, there is no theoretical limit to possible innovation based on this method of competition.
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Understanding the System: Marx and Beyond