falling rate of profit on production capital, quite regardless of market fluctuations or financial constructions. Countertendencies Marx regarded the TRPF as a general tendency in the development of the capitalist mode of production. Marx maintained, however, that it was only a tendency, and that there are also "counteracting factors" operating which had to be studied as well. The counteracting factors were factors that would normally raise the rate of profit. In his draft manuscript edited by Friedrich Engels, Marx cited six of them: More intense exploitation of labor (raising the rate of exploitation of workers). Reduction of wages below the value of labor power (the immiseration thesis). Cheapening the elements of constant capital by various means. The growth of a relative surplus population (the reserve army of labor) which remained unemployed. Foreign trade reducing the cost of industrial inputs and consumer goods. The increase in the use of share capital by joint-stock companies, which devolves part of the costs of using capital in production on others. Nevertheless, Marx thought the countervailing tendencies ultimately could not prevent the average rate of profit in industries from falling; the tendency was intrinsic to the capitalist mode of production. In the end, none of the conceivable counteracting factors could stem the tendency toward falling profits from production. Other Explanations Growth of Capital Stock In Adam Smith's TRPF theory, the falling tendency results from the growth of capital which is accompanied by increased competition. The growth of capital stock itself would drive down the average rate of profit. Other Influences There could also be several other factors involved in profitability which Marx and others did not discuss in detail, including: Reductions in the turnover time of industrial capital generally (and especially fixed capital investment). Accelerated depreciation and faster throughput. The level of price inflation for different types of goods and services. Taxes, levies, subsidies and credit policies of governments, interest and rent costs. Capital investment into areas of (previously) non-capitalist production, where a lower organic composition of capital prevailed. Military wars or military spending causing capital assets to be inoperative or destroyed, or spurring war production (see permanent arms economy). Demographic factors. Advances in technology and technological revolutions which rapidly reduce input costs. Particularly in the era of globalization, the national and international freight rate (shipping, trucking, railfreight, airfreight). Substituted natural resource inputs, or marginal increased cost of non-substituted natural resource inputs. Consolidation of mature