In this pamphlet, Ernest Mandel gives a concise outline of the basic principles of Marxist political economy. The first section focuses on the labour theory of value. The second section examines the laws of motion of capitalist economy and its inherent contradictions. Finally, Mandel applies this framework to some of the basic realities of modern capitalist economy. Ernest Mandel (1923-95) was one of the most prominent postwar leaders of the Trotskyist Fourth International. He also became arguably the most influential Marxist economist in the Western world.