> Date: Sun, 8 Feb 98 09:56:22 UT
> From: "andrew kliman" <Andrew_Kliman@CLASSIC.MSN.COM>
> To: ope-l@galaxy.csuchico.edu
> Subject: RE: Addendum, re Marx and historical costs
1.
> I think the denominator of h is Xo*a (no b).
Right.
2.
> I have difficulty with this interpretation. What you are calling
> the overvalued profit rate is, I think, the actual historical
> tendency of the self-expansion of capital.
Yes. The term "overvalued" is not good.
3.
> As I said, Im willing to be persuaded instead
> that the profit rate with revalued capital AND losses deducted
> from profit is the tendency. But I dont see it. The problem is
> that the latter has a continually changing starting point from
> which to measure self-expansion. In each period, you get the
> rate of self-expansion of that one period, but you wipe out the
> past.
The problem is that capital not only *self-expands* but, pressumably,
is also *destroyed* continuosly. Given labor saving innovations,
future (present) commodities will always contain less social labor-
time than the present (past) ones. However, this would be a rather
complex problem insofar as it is concieved in terms of the monetary
appearance that the process must take. I mean, we can have that the
falling labor-values could not be reflected in falling monetary
prices. So, there can be periods in which there is no way to really
"devaluate" ("destroy") the past capital because its monetary price
is "inflated". After all, who does really know the "value of money"
in a given point of time? How do capitalists know what is the value of
their capital? They *believe* that is is worth x or y amount of
money, but what is the value of this money? One day before the
devaluation of the "won", South-korean capitalists *believe* their
capital was worth $x; one day after, part of this capital had
been annihilated.
Anyway, I think the problem is not "choosing" between
K[t] = v[o]*f[o] + v[o]*f[1] + v[1]*f[2] + ... + v[t-1]*f[t]
or
k[t] = v[o]*f[o] + v[1]*f[1] + v[2]*f[2] + ... + v[t]*f[t]
Andrew''s model is a quite "stylized" (abstract) one and, as he has
said, it doesn''t depict the capital cycle. But, one or another
"valuation" could be "valid" in a specific temporal point. For
example, in South Korea, vast portions of capital invested in the
past have been suddenly "devaluated" and then, it is k[t] which
begins to be considered as the denominator of the profit rate
(certainly, the losses are written down!). But before the crisis, it
is possible the K[t] was the way in which the assets were "valuated".
BTW, maybe the people in South Korea or in Japan can tell us what is
really going on there.
Alejandro Ramos