More important is Marx’s claim that under capitalism the rate of profit tends to fall. Marx argued that the surplus value of the past accumulates in the form of capital. Hence capital is always increasing, and the ratio of ‘living labour’ to capital is always decreasing; but since capitalists only make profit by extracting surplus value from living labour, this means that the rate of profit must fall in the long run. All this was part of Marx’s attempt to show that capitalism cannot be a permanent state of society.
