The Law of the Tendency of the Rate of Profit to Fall, put forward by Marx in Capital Vol.3, is a theoretical summary of the social reality of capitalist society. However, this law is still controversial and some scholars have criticized Marx for it, including Japanese scholar Okishio Nobuo in his Okishio Theorem, although these criticisms are theoretically untenable. In this article, after commenting on the relevant arguments, we show that the rate of profit inevitably falls and develop a model to illustrate this. We find Marx's claim that the falling rate of profit, followed by the higher organic composition of capital, is justified even under the circumstance that the rate of surplus value rises and new fixed capital reduces.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.