ONCE AGAIN ON THE FALLING RATE OF PROFIT 77 book the Theory of Capitalist Development became a veritable text book for Marxist economics, especially for those who wanted to avoid ploughing through the three volumes of Capital. The eclipse of the falling rate of profit theory of crisis was partly the result of this. Since this review article is about the law of the falling rate of profit, let us start with a brief statement of this law. This law has been explained pithily by Lenin in the following words: "An increase in the productivity of labour implies a more rapid growth of constant capital as compared to variable capital. And since surplus value is a function of variable capital alone, it is obvious that the rate of profit (the ratio of surplus value to the whole capital, and not its variable part alone) tends to fall. Marx makes a detailed analysis of this tendency and of a number of circumstances that conceal or counteract it." In Capital Volume ///, Marx describes the situation by drawing attention to the way capital invested is composed in terms of constant capital (raw material, machinery) and variable capital (wages), and he calls the ratio of constant capital to variable capital as the organic composition of capital. Marx states the law of the falling tendency of the rate of profit in the following words: "...if it is further assumed that this gradual change of the composition of capital is not confined only to individual spheres of production, but that it occurs more or less in all, or at least in the key spheres of production, so that it involves changes in the average organic composition of the total capital of a certain society, then the gradual growth of constant capital in relation to variable capital must necessarily lead to a gradual fall of the general rate of profit, so long as the rate of surplus value, or intensity of exploitation of labour by capital, remains the same." Of course, Marx discusses various countervailing tendencies to explain why this rate of fall is not 'greater and more rapid'. He says: "There must be counteracting influences at work, which cross and annul the effect of the general law, and which give it merely the characteristic of a tendency^ for which reason we have referred to the fall of the general rate of profit as a tendency to fall". Of special interest in the book under review is the essay by Alan Freeman, incidentally a collaborator of Ernest Mandel in the book Marx, Ricardo and Sraffa. Freeman's essay is entitled "A General Refutations of Okishio's Theorem and a proof of the Falling Rate of Profit."