Rakesh wrote:
> Michael, I am interested to determine whether there are age-wise finely
> differentiated markets with standardized prices for second-hand machinery
The PC example concerned not second-hand (used) machinery, but
obsolescent PC parts that were bought up and assembled by a small
firm for sale to customers for whom price was a more binding
constraint than specification (eg students who just need a
word-processor).
Rakesh:
> or to put it differently for residual fixed capital as joint product.
So I am not sure to what extent it exemplified this.
Rakesh:
> 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;
This seems plausible - but it is counter-factual. There do not, I
think, exist widespread markets for obsolescent (let alone
second-hand) capital goods. *Unless* their do indeed exist a wide
variety of advanced capitalists selling off obsolescent or second
hand stock to less developed capitalists?
>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)
I'm not sure I see the relevance of this. Is Marx here not just
pointing out that it is capital in its money form that is most
adequate to the concept?
> 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.
This sounds plausible, if one can argue (as Geert and I do in our
(1989) book) that technological development at too high a rate may
generate scrapping before full amortization of the money capital
invested. Of course, if there is a market in which some proportion of
the intial investment can be recovered (this could be anything from
scrap value, through second-hand value to value as a low spec.
alternative for cash strapped customers), then innovatory investment
can indeed progress at a greater rate than otherwise.
> 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.
An interesting thought. Of course,such markets would also help the
measurement problem of ascertaining the rate of actual depreciation
(physical and 'moral') that has been exercising John Ernst and
others.
I'm afraid I have no special knowledge about the extent of such
markets.
Comradely greetings,
-
Michael
*===================================*
Michael@mwilliam.u-net.com
"Books are Weapons"
Dr Michael Williams
Department of Economics Home:
Faculty of Humanities and Social Sciences 26 Glenwood Avenue
De Montfort University Southampton
Milton Keynes SO16 3QA
MK7 6HP
tel:+1908 834876 tel/fax: +1703 768641
fax:+1908 834979
mwilliam@torres.mk.dmu.ac.uk
http://www.mk.dmu.ac.uk/~mwilliam