In OPE-3411, Fred raises the issue of how historic costs are
treated within the TSS framework. His position is that
historic costs are not used by Marx in computing the rate of
profit. He also points out that Andrew seems to have a
contradictory position on the matter. I'll let Andrew speak
for Andrew. However, it does seem to me that given Fred's
position, one is forced to ask a few questions.
1. What happens to the value lost due to price decreases
brought about by increasing productivity?
2. Are these losses to the capitalist to be deducted from
from surplus value or profit?
3. Did Marx simply forget about the losses as he blindly focused
on a rate of profit computed using the lower prices obtained
at the end of a period of production?
To answer these questions we cannot simply choose between
the prices as they exist at the beginning or at the end of a given
period production and ignore the historic costs. As I suggested
last year, by introducing "moral depreciation" Marx is able to
account for losses that capitalists incur because of falling
input prices.
In our discussions of TSS, Value and IVA, we restricted the
discussion to one commodity that is completely consumed in
a period of production. We never clarified whether the prices
at the end of each period were the ones capitalists actually
observed. If they are seen, it is difficult to imagine how
and why capitalists invest as they see drops in the rate of
profit. If they are not seen, we need some description of
what they do see. If we ignore the problem and merely look
for Marx's falling rate of profit, we would be forced to
look at this issue without examining how capitalism moves
from one period to the next as technical change takes place.
John