The theory has mainly two aspects. First, intra-industry competition is taken to be the structural aspect of capitalism. Second, the growth process of capitalism goes through a periodic business cycles. Thus the labor-saving technical change that amounts to increase in labor productivity is explained by the internal pressure and dynamics of the structure of capitalism itself. Under free competition, the immanent laws of capitalist production confront the individual capitalist as a coercive force external to him.
Luxury enters into capital's expenses of reproduction.