----------
From: owner-ope-l@galaxy.csuchico.edu on behalf of Duncan K. Foley
Sent: Wednesday, March 11, 1998 9:10 AM
To: ope-l@galaxy.csuchico.edu
Subject: Re: [OPE-L] Re: Historical Costs
Duncan writes: "I guess I see depreciation as an entirely separate process
from production. In production living labor preserves the _current_ value of
the means of production, and adds new value proportional to the living labor
time.
Outside of this process many other factors impinge on the valuation of stocks
of existing assets, which amount to _claims_ to value, among them ordinary
depreciation (wearing out) and moral depreciation (devaluation because of
technical change)."
Although Duncan wishes to maintain a strict separation between production and
depreciation, his own reasoning shows that this can't be done. He refers to
"devaluation because of technical change." But what is technical change?
Simply a situation in which the factors of the PRODUCTION process enter the
process in different proportions than they did previously. For instance, if
less living labor is used to produce a given amount of output, the new value
added "in production" will be less, AND this "technical change" will reduce
the value of existing assets.
I also note that when Marx is interpreted as not having maintained this strict
separation, his law of the tendential fall in the profit rate makes sense,
while it doesn't otherwise. People need to come to grips with the fact that
Marx's law holds that the profit rate falls because productivity rises.
Andrew Kliman