Re: [OPE] marginal costs

I am not smart enough to give a one sentence summary. Several problems with
the neoclassical argument -- the easiest revolve around time. Long lived
capital investment must be judged over the long term. If I replace a
large chunk of fixed capital today, it will be unlikely to pay for itself
in a year. How can you evaluate its appropriateness before several years
have passed? Can you predict new technology and changing demand.

Also, on the macro side, large fixed capital production typically has small
marginal costs. Competition can mean bankruptcy.

On Tue, Dec 09, 2008 at 11:48:00AM +0000, Paul Cockshott wrote:
> Michael Perelman wrote:
>> My book, Railroading Economics, shows how the refutation was commonplace
>> among the founders of the American Economic Association. Schumpeter seems
>> to have lifted their work and promoted as his own in Capitalism,
>> Socialism, and Democracy.
>>
> Do you give a full version of the argument given in one sentence in my last
> email in response to David.
> I am trying to recall from who on Ope I learned this, it was probably you.
>
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-- 
Michael Perelman
Economics Department
California State University
Chico, CA 95929
Tel. 530-898-5321
E-Mail michael at ecst.csuchico.edu
michaelperelman.wordpress.com
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