Jerry is on to what I see as the key dilemma in all this discussion of
depreciation (much of which I have skimmed, I had better confess). The LTV
argues that a capitalist only makes profit out of the v component of his/her
capital. The c component, which represents the physical depreciation of
fixed capital, simply transfers the value used up in its own production--so
that the capitalist makes a zero gain from c *if* the entirety of its value
is transferred to the product.
However if the machine not only physically depreciates but also suffers from
technological obsolescence, then *less than* the entire value used up in its
production is transferred to the product, and the capitalist is in fact
making a loss out of fixed capital. It sounds like capital is walking a
tightrope just above extinction at the hands of technological change. If
this rate gets too high, then it is possible that the loss from
technological obsolescence could wipe out the profit from the exploitation
of labor, leading to a loss overall.
Or does Marx's measure of c include the depreciation due to technological
obsolescence too, so that a higher rate of technological change means a
higher rate of transfer of the value of capital machinery to the product?
In my opinion, both the above positions are nonsense. The former implies
that an increase in technological change can send capitalists bankrupt, the
latter that a higher rate of obsolescence for old machinery increases its
value productivity.
Both these conundrums result from the initial proposition that machinery can
add no new value to the product. I won't repeat my usual liturgy here. But I
will observe that Jerry is right on to focus on how important the issue of
use-value was to Marx's analysis of the transfer of value from machinery to
product. A key example of this from Capital vol 1 (Progress Press edition
page reference):
"Value exists only in articles of utility...
If therefore an article loses its utility, it also loses its
value. The reason why means of production do not lose their
value, at the same time that they lose their use-value, is this:
they lose in the labour process the original form of their
use-value, only to assume in the product the form of a new
use-value... Hence it follows that in the labour process the
means of production transfer their value to the product only so
far as along with their use-value they lose also their exchange
value. They give up to the product that value alone which they
themselves lose as means of production."(Footnote: Ibid, p. 196.)
He continues, stating that over the life
of a machine, "its use-value has been completely consumed,
and therefore its exchange value completely transferred to the
product."(Footnote: *Capital*, op. cit., p. 197.)
And I could throw a multitude more on the same topic, from TSV, Grundrisse,
etc. An understanding of Marx's concept of use-value is key to understanding
the issue of value transfer from machinery to product, and therefore to
coping with the issue of technological obsolescence. But there's no
guarantee that Marx got it right.
Cheers,
Steve K
>I found Alejandro R's comments on use-value in [OPE-L:4113] very
>interesting indeed.
>
>Alejandro: how would you evaluate the following passage from the section
>on "Labor Process and Valorization Process: Use Value and Exchange Value"
>in Volume 33 of the _Collected Works_?:
>
> "Fixed capital -- hence this particular economic form -- is to a
> large extent dependent on use value. The duration of the
> depreciation of the machine, i.e. TO WHAT DEGREE it enters into the
> price of a commodity during a given period of turnover, and how
> long the component of capital represented by it circulates, depends
> on the use value, i.e. on the greater or lesser durability of the
> machine. The turnover time of the total capital therefore depends
> on this: and CHANGES in the relation between the organic components
> of the capital are also considerable affected by this. 4) The whole
> distinction between the labor process and the valorization process
> -- hence also the increase in the productivity of labour while
> labour time remains the same -- the whole of the development of the
> productive forces -- concerns use value, not exchange value. But it
> changes and modifies the economic relations and exchange value
> relations themselves." (p. 147, emphasis in original).
>
>In solidarity, Jerry
>
>
>
>
Steve Keen
Senior Lecturer
Economics & Finance
Faculty of Business & Technology
University of Western Sydney
PO Box 555 Campbelltown NSW 2560
Australia
s.keen@uws.edu.au (046) 20-3254 Fax (046) 26-6683
Home: (02) 9558 8018
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