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From: owner-ope-l@galaxy.csuchico.edu on behalf of Fred B. Moseley
Sent: Wednesday, February 11, 1998 5:01 PM
To: ope-l@galaxy.csuchico.edu
Subject: Marx and historical costs
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From: owner-ope-l@galaxy.csuchico.edu on behalf of Fred B. Moseley
Sent: Friday, February 13, 1998 2:11 PM
To: Multiple recipients of list
Subject: Re: Marx and historical costs
Fred has written: "I am still not sure how Andrew interprets the case of a
change in the value of money" and "it is not clear to me exactly what Andrew
is assuming about the case of a change in the value of money."
I think the question Fred posed is an inherently complex one. I did my best
to answer it, and I don't think I can do better unless I know what Fred is not
understanding. So I'd appreciate it if he would review my numerical example
and let me know what isn't clear.
Fred has also written in the former post: "it seems to me that ... existing
constant capital is cheapened as a result of technological change, i.e. is
valued in current costs. Otherwise, 'cheapening' cannot be a
'countertendency' to the falling rate of profit."
The latter of the two posts, however, adopts a somewhat "softer" position:
"If the capital loss is subtracted from the gross surplus-value, then it is
not clear to me that this cheapening would be a counter-tendency."
As I've mentioned, I think Marx uses "profit rate" in more than one sense.
With respect to this issue, there are at least two rates of profit to
consider, the actual (realized, ex post) profit rate of the past and the
potential (ex ante) profit rate of the future. The cheapening of the elements
of constant capital that occurs today cannot raise the rate of self-expansion
of a sum of value advanced in the past. However, the cheapening of these
elements does raise the potential profit rate on new advances of
capital-value, in the sense that any amount of profit will be measured against
a base that is smaller than the base would have been had the cheapening of the
elements not occurred. Hence, for the cheapening of these elements to act as
a counteracting factor, it is not necessary to spirit away the actual capital
advanced.
Andrew Kliman