This in turn forces more savage competition among the capitalists. As a result, some sink into insolvency, which leads to a universal capitalist crisis of the type that prevailed in the early 1930s. No magic of the market Capitalist economists tell us that the market is magical, that it creates profit and loss. While huge fortunes are made and unmade in the market, especially the stock market, their premise is wrong. The stock market is where profits are distributed, not created.
Profit is created only in the production process as a result of workers' labor.
Of all the commodities on the market that are exchanged for each other, there is only one with the peculiarity of creating profit. The others are exchanged for equal value. Were the laborer to be paid a sum equivalent to the value that his or her labor creates, there would be no basis for the bosses to employ it. Marx called this surplus value. It constitutes the profit for the employer.