Fred,
I do think we have a disagreement here. Let's see if
we can, at least, be clear on what it is. If a capitalist
invests 1000 in machinery, all I am saying is that he has
to set up a depreciation schedule that allows him to
recover that investment. He is aware that the price of
a machine, identical to it, is going to fall as he uses the
machine. He has to take into account those price decreases
as he sets up his depreciation schedule. Is he always going
to be right? No. But he is not always going to be wrong.
He has to compute his rate of profit using the total invested
in the machine and not on its reproduction cost. He did,
after all, invest 1000.
As I recall, Albero and Persky (sp) tried to show a falling
rate of profit by maintaining that the price decreases in
fixed capital would be deductions from profit. But, as
Roemer maintained, the capitalists would soon notice this
and take it into account as they change techniques.
OK. Let's get to the passage in TSV that you cite and about
which you raise questions.
Fred quoting Marx:
As a result of increasing productivity of labor, however, a part of the
existing constant capital is continuously depreciated in value, for its
value depends not on the labor-time that it cost originally, but on the
labor-time with which it can be reproduced, and this is continually
diminishing as the productivity of labor grows. (TSV.II. 416)
Fred says:
If this is what you mean by "constant capital depreciates in terms of
price," then we have no significant disagreement. If you mean something
different, please explain again what you mean and how you interpret this
and the other similar passages that I have presented.
John says:
To be sure, with increasing productivity constant capital does
"diminish" in terms of value and, according to Marx, in terms
of price as well. The question is "Do capitalists anticipate
these changes?" or "Are the changes shocks to them and, thus,
unanticipated losses?" With respect to fixed capital, I think
that Marx's position was that capitalists do "try" to anticipate
the losses by including an amount for the "moral depreciation"
of fixed capital in "c" as it is used in the expression
c+v+s. I base this primarily on Marx's citations of the TIMES's
in CAPITAL and in the COLLECTED WORKS, previously cited. Note
that if the capitalist were to sell his "morally depreciated"
capital, he would indeed be selling it at its cost of reproduction
less wear and tear, but, if he set up his depreciation schedules
properly, he would ON AVERAGE come out even.
The basic questions for both of us are: "How long will fixed capital
last? How do capitalists determine its durability?" It would seem
that we would answer these questions differently. For me, the
lifetime is both initially and finally socially determined.
That is, capital will be used as long as it is profitable and
capitalists in purchasing the elements of fixed capital estimate
its lifetime based upon anticipated profits and past experience.
Again, their information is not perfect. Hence, Marx himself seems
extremely casual in his examples about the lifetime of fixed capital.
My interpretation of YOUR position is that the lifetime of fixed
capital is initially longer than it would be if no innovation took
place in its production. Hence, capitalists set up depreciation
schedules in which they anticipate no losses due to that type of
innovation. When they take place, capitalists take a loss.
Hence, like Paul C. you see them going to their books and making
adjustments to both their capital accounts and to their profits.
I would agree that when the losses are either extreme or unexpected
or some combination of the two, this does occur. But given that
productive change is continual, I do not see this situation as the
norm. Indeed, if it were the norm, capitalists would continually
be diminishing their capital accounts due to this type of
devaluation and continually subtracting identical amounts from
profits. Why not assume that they have the good sense to anticipate
a bit of this process?
Put another way, no one purchases 5 year maintenance contracts on
PC computers. Why? We do expect that they will be working 5 years
from now.* But no one expects that they will be using them 5
years from now. For capitalists, the expectation is that they will
only have scrap value 5 years from now. Hence, I would maintain
that the capitalist is assuming something about moral depreciation
as he purchases his new computer and sets it up on a 3 or 5 year
depreciation schedule of some sort. He does not use a 15 year
schedule and then make adjustments as innovation takes place.
________________
*I still have a 15 year old Kaypro computer and 16 year
old Timex-Sinclair. They work.
______________________________
I suspect that the root of our disagreement is to found in the
manner we deal with concrete and abstract labor. That is, my
feeling is that you object to my placing the "moral depreciation"
in "c" rather than pulling it out of "s" as it occurs. In your
eyes, I attribute too small an amount of the gross output to
the net and consequently diminish the contribution of living
labor to the gross output. But since I am doing this in each and
every period as the process moves from period to period, what is
the danger in viewing value production in this fashion? My
question to you remains the same - how do we measure the profit
rate? Do we use the recomputed value of the means of production
in our calculations or the value actually invested? Do we use
the surplus value produced in the process or the surplus value
minus the moral depreciation in those same calculations?
John