Michael, I am interested to determine whether there are age-wise finely
differentiated markets with standardized prices for second-hand machinery
or to put it differently for residual fixed capital as joint product. What
are the dynamics of the determination of the size and nature of such a
market? Is foreign direct investment in, say, Vietnam best understood as
sale of obsolescent equipment?
If such a market exists, then it seems that there is an easy and objective
answer to the determination of the magnitude of capital consumption; one
would have expected the growth of such a market since "in so far as fixed
capital is condemned to an existence within the confines of a specific use
value, it does not correspond to the concept of capital, which, as value,,
is indifferent to every specific form of use value, and can adopt or shed
any of them as equivalent incarnations." (Grundrise, 694)
The stronger the foreign market for second hand machinery or the more money
to be made from the sale of obsolescent machinery, the less the profit rate
on one mode of investment must fall to render profitable the removal of
capital from that investment for another more profitable one. That is, if
very little can be made from the sale of second hand machinery, then the
investment of that scrap value even at a higher rate of profit may reduce
the mass of profit realized and by thus rendering uneconomical the movement
of capital to investments with higher profit rates, the profit rate
remains depressed despite the theoretical possibility of higher
profitability.
Best,
Rakesh