[OPE-L:3997] Re: More Depreciation Questions

Gerald Lev (glevy@pratt.edu)
Thu, 16 Jan 1997 08:41:42 -0800 (PST)

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More on "tacit" assumptions related to depreciation funds for individual
capitalist firms --

In the decision about how much $ to put aside for future fixed capital
expenditures, there are "tacit" assumptions about future profitability that
include (abstracting from the role of the state):

-- estimates concerning the future price of elements of circulating fixed
capital;

-- estimates concerning future changes in wage costs (including benefits)
for productive labor;

-- estimates concerning changes in the intensity of labor;

-- estimates concerning changes in the amount of expenditure on
unproductive labour;

-- estimates concerning capacity utilization and the "workweek" of
constant fixed capital;

-- estimates concerning future transport costs;

-- estimates concerning market demand, including estimates concerning
commodity prices and the quantity of unsold inventories (which itself
implies a cost in terms of storage).

None of these can be known to the firm _ex ante_. These decisions
concerning capitalist production, consequently, from the standpoint of the
individual capitalist, proceed on a wish and a prayer.

In solidarity, Jerry