RE: Andrew's 4080 In OPE-L 4060, John wrote, : you seem to take the position that one type of depreciation transfers : value to the output and the other type does not. I think you then face : the question of why moral depreciation is to be labeled "depreciation" at : all. In 4080 Andrew wrote: This presumes that the meaning of the term "depreciation" has to do with transfer of value. I don't think that is the case. The meaning of the term "depreciation" -- and the etymology bears out that this has consistently been the case -- is that there's a fall in price or loss of value. Thus the distinction between moral depreciation and physical depreciation is a distinction between two causes of reductions in the value of a means of production: (a) its price falls; (b) it has been partly used up. My comment: Let me back up and attempt to explain my clear thinking or, perhaps, utter confusion. Why would I associate or conflate the transfer of value with depreciation? First, let's consider the 3 types of depreciation in CAPITAL. 1. depreciation that is due to the simple wearing out of the plant or equipment due to use. Things wear out physically with use. 2. depreciation that is due to simple aging. Things wear out physically with age. 3. depreciation that is due to things of "the same sort being produced cheaper than it of by better machines (things, JE) entering into competition with it."(V1, CH15,sec3b,para5). The first 2 types are physical depreciation. The last moral. Clearly, if all deprecation were of Type 1, we would agree that the amount of depreciation corresponds to that portion of the value of the machine that is transferred to the product in the process of production. The correspondence seems a bit less obvious when we consider Type 2. Still it's a question of physical wearing down of the use value as it is used in the production process. Hence, here I think the correspondence is seen to generally hold. But then comes the clinker -- Type 3. Perhaps we could break it done a bit more by distinguishing between sudden moral depreciation and that which is more or less taking place on a continuous basis. But either way we face problems if we view it as corresponding to the transfer of value or if we abstract from it as we consider the manner in which value is transferred from fixed capital to the products produced with its use. John
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