John E. wrote:
>
> I am going to call myself one of those who assumed that information
> about devaluation can be known in advance and further claim that it
> is. Let me be clear. I do not think capitalists have perfect
> information. Rather, I have stated (perhaps not as well as I
> should have) that capitalists in Marx's day knew that the elements
> of fixed capital that they purchased would often be available
> at lower prices while they were using the fixed capital. To
> compensate for this loss as they price their commodities, they
> included a charge for "moral depreciation." This does not preclude
> sudden devaluations in the future which are entirely unanticipated.
>
Yes, I agree that capitalists may have an anticipated moral depreciation.
When competition becomes fierce (I regard a depression as being
associated with fierce comeptiton), devalorization accelerates. Keynesian
policy was a method of keeping devalorization within bounds, but it does not
always work.
>
> I'm not sure why we would assume that prices would move toward
> marginal costs. Doesn't the general story for this type of movement
> assume that techniques are unchanged?
No. New technology can reduce marginal costs for new technology, but it
will add pressure to drop prices toward marginal costs for older capital
goods.
-- Michael Perelman Economics Department California State University Chico, CA 95929Tel. 916-898-5321 E-Mail michael@ecst.csuchico.edu