On Marx’s Law of the Falling Rate of Profit: Disentangling Some Entangled Variables

This paper argues that Marx’s law of the falling rate of profit applies to the problematic of choice of technique in the context of accumulation of capital, and not to the problematic of choice of technique in the context of technological change or new innovation as such. In this context, Marx’s “the law itself†is correct. It is, however, true that Marx does confuse the two contexts at times; but here he seems to be following in the footsteps of Ricardo, who had also made an identical mistake.