rather, in the "facts of experience" considered in their historical setting and connection.
So it was with his theory of Value and Surplus-Value. Considering that the question of value lies at the very foundation of the capitalistic mode of production and distribution, he insisted that a theory of value in order to be accepted as correct, must not only be in accordance with the facts as they are, but it must furnish a key to the understanding of capitalistic development, to the understanding of the facts of capitalism in their movement. It must explain not only the statics of capitalism, but also its dynamics. A theory of surplus-value, in order to be accepted as correct must show the sources and volume of the profits of the capitalist class not only as they exist to-day, but throughout the entire historical epoch dominated by the capitalistic mode of production and distribution. It must account for the different variations in these profits, if any be discovered. It must explain the development of profits.
And it is here that the Marxian theory has to record its greatest triumph. In philosophy as well as in economics, it is its historical character that gives the Marxian theory its peculiar import, that forms its essence. What does the history of capitalistic profits show? If there is anything that is well established in connection with capitalistic profits, it is the tendency of the rate of profit on capital to diminish. With the development of capitalism and the growth of the mass of capital, the return on capital in the shape of profits is constantly becoming smaller. While the gross amount of profits obtained by the capitalist class is constantly increasing with the growth of the mass of capital, the amount of the profits in proportion to the whole capital employed, and therefore, the rate of profit on a given amount of capital, tends to constantly diminish. This is known in political economy as the "law of the falling rate of profit." Whence this law? How account for the falling rate of profit? No theory of value before or after Marx could give a satisfactory answer to these questions. As
