FALLING TENDENCY OF PROFIT RATL 43 taking some arithmetical examples. From these arithmetical calculations are drawn a few general conclusions. He tries to investigate the effect of increasing labour productivity on the rate of profit by assuming that increased productivity will raise the constant capital per man and hence the organic composition. It goes to reduce the rate of profit. Now he introduces the element of cheapening of constant and variable capital which would simultaneously occur due to the increase in productivity. While doing so,, he arbitrarily assumes that a technology which increases the mass of constant capital per man from 1 to 2j would cheapen the elements of constant and variable capital by ^-.22 What is more surprising is that in his four sequential examples, mass of constant capital per man increases from 1 — 2j to 4| —9, but in each of these cases the constant and variable capital get cheapened by -5- only.21 Thus though Meek has raised a very crucial problem not dealt with by Marx or any of his followers, his own answer to the problem is mistaken. The validity of the law of tendency of the rate of profit to fall is still an open question. It becomes more complicated when we analyze contemporary capitalism. Monopolization, intervention of the state and the rate of banking capital have to be taken into account. Monopoly capital tries to usurp a higher rate of profit at the expense of the non-monopoly sector. The state sector sells its products at best at a nominal rate of profit to the private sector and thus transfers surplus value to the private sector. This tends to boost the rate of profit. Interest on bank capital is lower than the industrial rate of profit. Thus banking capital, which is a section of the capitalist class, is content with a lower rate of profit. This also tends to boost the average rate of profit. All these and similar problems (for example, delinking of money and gold, deficit financing) have to be sorted out to see whether the contradictions in contemporary capitalism are expressed in the tendency of the rate of profit to fall. Sterile dogmatism is completely satisfied with Marx's arguments, always pays tribute to Marx's laws but silently drops this law7 when discussing the current crisis in capitalism. Against this background, attempts by writers like Sweezy, Meek, Hodgson, Yaffe and ^others to go to the roots of Marx's arguments and examine then in detail aie welcome. But lacking the logical rigour of Marx and a similai solid basis in empiiical research they tend to hastily jump to conclusions. Even the mos-t notable attempts have failed to develop Maixi^t theory sufficienti). Indian Marxists have not tried to deal with the criticism ofMaix's law at all. It is hoped that the foiegoing has shown the necessity of going into these questions. But we can never hope to achieve tin;? task if \\e proceed along the lines of Suhas Chattopadhyay. ANANT PHADKE 1 Ronald Meek, ^The lulling Rate of Profit" in The I co^n uc\ of Mot\, Hov^id and King (ed.) Penguin, 1976, p 210.