In nlr 86, Geoff Hodgson discussed the ‘tendency of the rate of profit to fall’. Though I agree with his general conclusions, I feel it is necessary to add some further arguments in order to make his refutation of the ‘law’ more convincing. footnote1
As early as 1929 Natalie Moszkowska published a highly important book on Marx’s economic system. footnote2 Besides making an original contribution to the theory of economic crisis, she put forward some strong arguments against the so-called law of the tendency of the rate of profit to fall, while proceeding strictly on Marx’s own assumptions. Apparently her contribution is hardly known in the English-speaking world, so I think it will be useful to present her basic theses to nlr readers. footnote3
As Geoff Hodgson points out correctly, the movement of the organic
1. Labour-saving technical progress.
Type I: the rate of growth of the productivity of labour is lower than the rate of growth of the means of production (in physical terms).
Type II: the rates of growth are equal.
Type III: the rate of growth of the productivity of labour exceeds the rate of growth of the means of production (in physical terms).