Fred Moseley wrote:
>
> I would like to raise another issue in the ongoing discussion of the TSS
> interpretation of the falling rate of profit - whether or not Marx's theory
> does in fact assume that constant capital is valued at historical costs -
> the actual costs at which the means of production were purchased at various
> times in the past. It seems to have been taken for granted in the recent
> discussion that the TSS interpretation - that constant capital is determined
> at historical costs - is a plausible interpretation of Marx's theory. But
> I don't think so.
Fred, let's think about historical costs a bit more. If I look at an
industry, if a firm has mis-invested, its historical costs might be
overlooked in terms of price formation.
Now, think about a sequence of rapid technological changes, each of
which wipes out much of the historical costs accross an industry. After
a few iterations, the industry [or on a grander scale, business in
general] faces bankruptcy.
This is the logic that links historical costs to the frp.
-- Michael Perelman Economics Department California State University Chico, CA 95929Tel. 916-898-5321 E-Mail michael@ecst.csuchico.edu