  Can cost-reducing technical change lead to a fall in the long run rate of
profit if class struggle manages to keep the rate of exploitation constant? In
a general circulating capital model, we derive sufficient conditions for
cost-reducing technical change to both keep the rate of exploitation constant
and lead to a fall in the equilibrium rate of profit. Further, if the real wage
bundle is such that the maximum price-value ratio is larger than 1 plus the
rate of exploitation, then starting from any configuration of technology and
real wage, we can always find a viable, CU-LS technical change that satisfies
the sufficient conditions for the previous result. Taken together, these
results vindicate Marx's claim in Volume III of Capital, that if the rate of
exploitation remains unchanged then viable, CU-LS technical change in
capitalist economies can lead to a fall in the long run rate of profit.
