The tendency of the rate of profit to fall (TRPF) is a hypothesis in economics and political economy, most famously expounded by Karl Marx. The central idea that Marx had, was that overall technological progress has a long-term "labor-saving bias" and that the overall long-term effect of saving labor time in producing commodities with the aid of more and more machinery had to be a falling rate of profit on production capital, quite regardless of market fluctuations or financial constructions.

Logical as it seems, Okishio Theorem proves it to be wrong. Where is the mistake in Marx's analysis?

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  • $\begingroup$ Your post is interesting, but the logic behind your question is not fully clear. You start with the "rate of profit to fall hypothesis", which is an hypothesis, and then you switch suddenly to Okishio's theorem whose content is not clear (to me at least). Could you add a statement of the theorem or a reference? $\endgroup$ – Bertrand Mar 15 at 11:54

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