John E
-------
Paul must be making an assumption not part of my original
query. That is, he assumes that the machine made in a more
productive fashion sells for less. I said nothing of a
price reduction for that machine. Yet, if we were to use
his labor time accounting techniques, we would insist that
I had lost the $250. To be sure some of this "loss" would
be there whether or not there was a change in technique in
machine production as it would be seen as depreciation. If
the price of the machine didn't change, I'd question the
sanity of any accountant who told me I lost $250
in depreciation unless the new technique led to an IMMEDIATE
price decrease.
Paul
----
I did assume this. In industries where the rise in productivity
is that great, ( semi-conductors and computers ), the fall
in prices is equally rapid. One often sees adverts for second
hand computers, where, the seller reckoning that the machine
is half way through a 3 year life tries to sell it for about
half the price that he bought it for. The problem is, that
at that price one can usually buy a new model with twice the
performance.