Social Scientist. v 5, no. 57 (April 1977) p. 33.

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Falling Tendency of Profit Rate

THE LAW of the tendency of the rate of profit to fall was very important for Marx's analysis of the capitalist mode of production and especially for his diagnosis of crises. Indian Marxists however hardly mention it in their examination of the contemporary crisis in capitalism. See for example B T Ranadive's ^World Capitalist Crisis" in Social Scientist 28. Some prominent Marxists like Paul Sweezy, on the other hand, explicitly say that this law no more operates in monopoly capitalism. Ronald Meek goes even further. He concludes in an article devoted to this problem, that even in a model of competitive capitalism, ^it is virtually impossible to predict how the rate of profit will in fact behave.991 Under such circumstances a discussion of this law in Social Scientist 54-55 by Suhas Chattopadhyay is most welcome although to me it is methodologically off the track and hence fails to help further our understanding of this law. The questions raised by Sweezy and others have not been dealt with at all on a theoretical plane.

Replying to the criticism of Tugan Baranowsky and others that in his exposition of this law Marx makes an unrealistic assumption of a constant rate of surplus value, Chattopadhyay points out that Meek has shown that this is not true but adds: ^Had he been completely satisfied with his initial assumption of constant rate of surplus value due to a rise in organic composition the law could not yet be dismissed. Sometimes the rate of surplus value may have a tendency to remain at the same level even when labour productivity increases due to a rise in the organic composition of capital.5?2 On what grounds does Chattopadhyay assert this? By quoting statistics for Indian industry. The question however is, given the conditions of capitalist mode of production would the rate of surplus value necessarily increase along with the rise in organic composition of capital? In a scientific enquiry, it is wrong to quote figures for a particular case and stop at that. Figures in themselves have no value. They are relevant only within a theoretical argument. But Chattopadhyay has no theoretical argument as to the circumstances under which the rate of surplus value will remain constant in spite of an

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