Social Scientist. v 3, no. 36 (July 1975) p. 61.

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can regulate the basic economic trend. In the law of falling tendency of the rate oi profit, Marx concentrated his attention on the fundamental and prevalent aspect of the increase in the organic composition of capital due to technical progress. Samuelson, like most other critics, fails to consider Marx^s law of falling rate of profit in the light of his general dialectical analysis.

Marx's entire analysis of the economic law of motion of capitalism was based on a high level of abstraction but he never moved away from the real world. Rather he tried to isolate, for intensive investigation, certain broad aspects of the real world. In elucidating the law of motion of capitalism, technological advance appeared to him as a crucial determining factor.8 Marx deduced his law of falling tendency of the rate of profit from the long-term dynamic trend of capitalism for capital accumulation accompanied by continuous technological changes. In deducing this law, he had to follow the revolutionary effects of technological progress through the economic system as a whole. /

Dialectics of Technical Change

Marx's theory of economic evolution shows that there is an inherent tendency of capitalism for capital accumulation. The capitalist accumulates capital with a motive to conquer the world of social wealth. He is also compelled to accumulate due to coercion by forces external to himself in his struggle for existence in a competitive regime. In the struggle for sales and profits the best weapon is to lower the cost of production. "One capitalist", Marx writes^

can drive another from the field and capture his capital only by selling more cheaply. In order to be able to sell more cheaply without ruining himself, he must produce more cheaply, that is, raise the productive power of labour as much as possible. But this productive power of labour is raised, above all, by a greater division of labour, by a more universal introduction and continued improvement of machinery. The greater the labour army among whom labour is divided, the more gigantic the scale on which machinery is introduced, the more does the cost of production proportionately decrease, the more fruitful is labour. Hence, a general rivalry arises among the capitalists to increase the division of labour and machinery and to exploit them on the greatest possible scale.4

By a greater division of labour, by the utilization of new machines and their improvement, by more profitable and extensive exploitation of natural forces, the capitalist can find the means of producing with the same amount of labour, (or of accumulated labour) a greater amount of commodities than his competitors. If he puts the price of the commodities produced by him only a small percentage lower than that of his compe-* titors, he can wrest from them at least a part of their sales. However,, this privileged position cannot be enjoyed by the capitalist for an indefinite period. The same machines and the same division of labour would soon

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