Philosotips: Intro + Marx’s Falling Rate of Profit & Games Consoles

The character 'Marx' from the Kirby video game series.

The character ‘Marx’ from the Kirby video game series. Don’t stare or you’ll get a headache.

NB readers only interested in video games should skip to the last section.

Intro to Philosotips

I’m very happy presently as I’ve just managed to access this site for the first time in many weeks ( tell me they’ve got ongoing technical problems here in the UK). So I’m going to celebrate the best way I know how: dreaming up a whole new series of posts instead of carrying on with other series that are still only in their early stages.

These ‘Philosotips’ are short and simple hints for understanding key ideas in philosophy and related subjects. Inspired by my (hopefully) immanent enrollment on postgraduate degree in teaching, these tips are aimed primarily at teachers and their students, but will be accessible to all. At the outset I have 3 main aims: 1) correcting prevalent misunderstandings, 2) suggesting engaging analogies and other useful techniques for conveying the ideas, and 3) pointing out my favourite points among details that aren’t usually covered.

This first post comes under the second category.


Before I get to my main point, I just feel like providing a typology of Marx’s ideas, which I hope is useful in its own right. Karl Marx is rightly a philosophical giant for 5 major contributions he made along with his partner Friedrich Engels:

1) Related theories of human nature and how societies cause alienation. (I have written about this in depth here.)

2) A theory and method of criticism that continues to be used and developed across the humanities and social sciences. For this the apolitical adjective ‘Marxian’ tends to be used.

3) His comprehensive, albeit very much unfinished work applying this method to the industrial capitalism by which the most technologically advanced civilisations of his time were organised. This hinged on his analyses of ideology, a concept that can be applied to any society, and one which Marx infamously applied to religion. Influenced by the humanism of the enlightenment era, and in the shadow of German Idealism, Marx had a strong focus on human progress viewed as the story of history.

4) Theories suggesting the unsustainability of capitalism. Marx provided many of these, so definitely avoid the mistake of thinking that simplified versions of the class based dialectic from The Communist Manifesto (i.e. thesis: bourgeoisie + antithesis: proletariat = synthesis: classless society) represent Marx’s serious or mature justification. The work that does instead stemmed from Marx’s criticisms of the ‘political economists’- a species of thinker who were predominantly British, including free market advocates like Adam Smith and utilitarians like James Mill (father of J. S. Mill).

5) A political theory of how workers under industrial capitalism should organise themselves, i.e. what is normally called ‘Marxism’. This was particularly influenced by French radicals and revolutionaries. That term became used very loosely, particularly in a pejorative sense by right-wingers, so quickly that even in his own lifetime he declared “I am not a Marxist”.

The Falling Rate of Profit and Video Games Consoles

Due to the focus on economics of Marx’s theories from category 4, they are less likely to be covered in depth- especially in a Philosophy or a Religion course at A-Level. (One might well remark that they are not something that the establishment would like taught in any context!) But for one of the most important of these ideas -the falling rate of profit- I noticed a simple example that can be made involving video games- a veritable goldmine of a subject for engaging young people (and gamers of all ages).

For a long time the power of video games consoles tended to dramatically improve every 4 or so years, which was presumably influenced by the effects of Moore’s Law. But since the launch of the X-Box 360, game graphics, for example, haven’t improved much and by the time the new X-Box is released around Christmas there will have been an 8-year gap.

One reason this cycle is taking much longer now might be that with the level of technology that has already been reached, the cost of the investments required to make something that is enough of an improvement to ensure that people would buy it is astronomical. The cost of producing each game seems to be getting much higher too because in order to make full use the new capabilities a lot more work in the form of detailed content has to be created than before.

Each of the console companies have to make something that many consumers will see as better than the other companies product in order to stay in business, and yet it seems that all of them will gradually becoming less and less able to afford to produce something better at all. As the proportion of their capital they have to invest increases, their rates of profit will fall. Ultimately the market will stagnate, and they will be unable to make profit any more. The cost of developing a new console that would make a profit would bankrupt the producers.

Marx claims that there will come a point when this process or a very similar one will have happened to all the major markets, at which point the capitalistic economic system will become untenable. He provides some economics (relating to his famous theory of surplus labour) in order to prove this, and it remains very controversial.

I don’t mean to insist that what has happened in the video games industry is for the reasons that Marx gave, and still less to imply that the whole economy is headed this way as Marx thought. Rather, I share it as an analogy to aid the understanding of Marx’s idea. If you have students who wish to investigate the suitability of this analogy, or the possible existence of this trend in other industries, however, consider that a bonus!


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