In dealing with the crises of overproduction of capital, (which is also an overproduction of commodities, because capital is composed of commodities) Marx describes how this is a result of changes in the value composition, not the technical/organic composition of capital. As far as the Law itself is concerned, Marx notes, in Theories of Surplus Value, Chapter 23, that the falling rate of profit is much smaller than it is said to be.
“It is an incontrovertible fact that, as capitalist production develops, the portion of capital invested in machinery and raw materials grows, and the portion laid out in wages declines. This is the only question with which both Ramsay and Cherbuliez are concerned. For us, however, the main thing is: does this fact explain the decline in the rate of profit? (A decline, incidentally, which is far smaller than it is said to be.) Here it is not simply a question of the quantitative ratio but of the value ratio.”
As in Capital, Marx emphasises that it is so small, and countered by other factors that any change in it can only be detected over long periods of time. Hardly a basis, therefore, for it to be the foundation of crises that Roberts and his associates would have us believe. He then goes on to explain, some of these countervailing factors, and why it is that the tendency to fall is so slight, and only detectable over these long periods.
For fixed capital, not only does its physical mass grow by a much smaller proportion than the increase in output it creates, but also the unit value of this fixed capital falls proportionately too, because of technological innovation. A spinning machine with ten spindles, replaces ten spinning wheels with just one. The spinning machine may, or may not, cost more than a spinning wheel, but it is certainly cheaper than ten spinning wheels. Moreover, Marx points out that these new technologies tend to be more durable, so that, they also last longer, and so their value is amortised over a longer period of time, and consequently a much greater quantity of output, meaning a smaller portion of the value of the output is accounted for as wear and tear of this fixed capital, with a consequent effect on increasing the rate of profit.
The effect of this is also to bring about a moral depreciation of the existing fixed capital stock. When spinning machines are introduced, the value of spinning wheels is immediately slashed, and it is on the basis of this reduced value, not the historic price of the spinning wheel that Marx calculates the annual rate of profit. The very process that stands behind The Law of the Tendency for the Rate of Profit to Fall, over the longer term, therefore, of technological innovation that raises productivity, causes a devaluation of existing capital, and consequent immediate rise in the rate of profit. The method of using historic prices, rather than current reproduction cost necessarily understates the rise in the rate of profit, or even converts it to a fall in the rate of profit, and such a divergence becomes all the greater in periods of rapid technological change.
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