John
I think we're in trouble with an LTV that simply assumes price
changes because of increases in productivity. Granted, these
days, we do see them in the computer industry. But, even if
we assume that the price of a machine drops dramatically, do
the producers using that machine drop their prices? Do they
then compute their rates of profit based on this new price of
the machine? Something is amiss here. Suggestions? Why
are we not using Marx's concepts of individual and social
value?
Paul C
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Why are we in trouble with an LTV that assumes price changes
because of increases in productivity?
Is this not what Marx assumes when dealing with relative
surplus value?
On the second question of the extent to which producers
who use a cheapened product pass this on in their prices,
I would say that in principle yes, but whether it is noticeable
will depend upon how important the input is to their product.
If we take a product like PCMCIA solid state disks, which depend
for a large part of their cost on flash memory chips, we can
be pretty certain that they will pass it on. If we take a product
like flour, which may use a few computers in the mills, then
the decline in flour prices would probably not be noticeable.
On the recomputing of rates of profit, the cases where it becomes
significant are where the rapidly depreciating machine makes
up a large part of a firms assets. Mainframe leasing companies,
will have had to take into account technical depreciation of
this sort.