[OPE] devaluation and revaluation of variable capital

adsl675281@tiscali.nl

Michael Perelman said:

"I have mentioned this idea several times on the list, but Jerry seems to be the only one who expressed any sympathy for it."

I also adopted the same idea, before I read Michael's version of it, because I compared Marx's concept with how depreciation values are empirically established by business, by taxmen, and by social accountants. The same idea is already implied by the modern notion of "economic depreciation", in contrast with book value depreciation or depreciation for tax purposes. 

Namely, in order to establish "economic depreciation" accurately, we have to verify the average market prices of the relevant asset at different stages of its useful life - which is saying that what "real" depreciation is understood to be, depends on the result of actual market values realised in trade for second-hand assets (defined in constant dollar values with the aid of some price index or deflator) and not on the particular history of any given asset. Depreciation values are socially established, and not a technical consequence of labour embodied. 

I agree with Michael that you cannot establish what production values are other than aposteriori, but in fact a great deal of effort by businesses nowadays goes into estimating and forecasting proxies for production values ("value-based management") using concepts such as "economic value added". They understand the relationships to which Marx refers very well, but just use a different language. Instead of labour-exploitation, you talk about productivity, and so on. 

Different authors who have studied the same phenomenon comprehensively and exhaustively arrive at very similar conclusions about it, because in fact reality does not permit very great variations in objectively understanding the same thing. All you can say, is that you get there faster with certain approaches, and that people hide unwanted implications of a reality they discovered with ideological window-dressing.

Jurriaan

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