Comment by pembrook

Comment by pembrook 2 days ago

I call this the "Karl Marx Fallacy." It assumes a static basket of human wants and needs over time, leading to the conclusion competition will inevitably erode all profit and lead to market collapse.

It ignores the reality of humans having memetic emotions, habits, affinities, differentiated use cases & social signaling needs, and the desire to always want to do more...constantly adding more layers of abstraction in fractal ways that evolve into bigger or more niche things.

5 years ago humans didn't know a desire for gaming GPUs would turn into AI. Now it's the fastest growing market.

Ask yourself: how did Google Search continue to make money after Bing's search results started benchmarking just as good?

Or: how did Apple continue to make money after Android opened up the market to commoditize mobile computing?

Etc. Etc.

chinesedessert a day ago

this name is illogical as karl marx did not commit this fallacy

Reply View 7 replies

pembrook a day ago

Yes, he did, and it was fundamental to his entire economic philosophy: https://en.wikipedia.org/wiki/Tendency_of_the_rate_of_profit...

Reply View | 6 replies
- deadfoxygrandpa a day ago
  
  no, he didn't, and your link has nothing to do with your fallacy you were talking about
  
  Reply View | 2 replies
  
  pembrook a day ago
  
  It absolutely does, and the fact that now 2 marxists (which I can see from your comment history) have a total inability to offer any actual rebuttal, does not surprise me.
  
  Reply View | 1 reply
  
  deadfoxygrandpa 11 hours ago
  
  theres nothing to rebut. you made an assertion thats false on the face of it and posted a link to something totally unrelated. it's so wrong i dont even know which part you're misunderstanding.
  but one of the core ideas of marx's conception of history is that human needs, wants, and human nature itself are constantly in a state of change and that those needs and desires are in large part a product of the environment in which you live, and further that humans and human society in turn change their own environments which in turn change human nature itself
  
  Reply View | 0 replies
- Balinares a day ago
  
  I'm not seeing anywhere in that page anything about an assumed static basket of human wants and needs. Maybe I missed it -- can you point out where you saw that?
  Interesting, though, that per the very same article someone like Adam Smith concurred empirically with Marx's observation on the titular tendency of rates of profit to fall. This suggests to me it likely had some meat to it.
  
  Reply View | 2 replies
  
  pembrook 14 hours ago
  
  Without going too deep on it (I used to be a fan in university as a silly youth), the tendency of the rate of profit to fall is the key aspect of Marx's crisis theory.
  Basically dude thought the competition inherent in capitalism would cause all profit to be competed to zero leading to an eventual 'crisis' and collapse of the capitalist means of production.
  Implicit in this assumption is the idea that the things humans need and want changes/evolves in a predictable way, and not in a chaotic/fractal/reflexive way (which is what actually happens).
  An eventual static basket of desired goods would be the only mechanism by which competition ever could compete profits to zero. If the basket is dynamic/reflexive/evolving, there's constantly new gaps opening between human desires and market offerings to arbitrage for profit. You can just look at the average profit margins of S&P500 companies over time to see they are not falling.
  The further we get from subsistence worries (Adam Smith's invisible hand has pulled virtually the entire globe out of living in the dirt), the more divergent and higher abstraction these wants and needs become, and hence the profit opportunities are only increasing -- which is how the economy grows (no, it's not a fixed pie, another Marxian fallacy).
  
  Reply View | 1 reply
  
  deadfoxygrandpa 11 hours ago
  
  again, marx didnt see it as a fixed pie. thats the whole reason behind his idea of absolute vs relative surplus value, is that the pie isn't fixed. he absolutely saw the (at his time) modern capitalist economy as a revolutionary, dynamic force that brought about a great increase in the absolute amount of productive capacity and wealth in the world
  
  Reply View | 0 replies