# [OPE-L:4079] Revaluation

From: John Ernst (ernst@pipeline.com)
Date: Fri Oct 13 2000 - 00:33:36 EDT

```RE:  Alejandro # 4071

Herr Bernstein:

John wrote:

>Indeed, should
>we pursue the path you propose, we would have to abandon the idea
>that the output of production processes can be seen as the sum of
>c,v, and s.   Rather the output would be the sum of c,v,s, and x
>where x is the loss or gain due to what you call "revaluation."

Alejandro # 4071

Despite I'm Eduard Bernstein, I read "Extirpating Simultaneous Valuation"!
In that fascinating article, I've got the idea that the magnitude of value
and its component parts should be temporally well defined. However, in the
preceding passage I don't see any temporal determination in your
magnitudes. I'd say that the first c+v+s corresponds to a certain "t" and
the other to, say, t+1. "x" is the difference between the value in t+1 and
in t, but this doesn't mean that value in t+1 is = c+v+s+x; it's, as
always, (c+v+s).

My comment:   Fine,  I still think there is an "x" term in your
thinking as move from time t to t+1.

C(t+1)+c(t+1)+v(t+1)+s(t+1) +x  = C(t)++c(t)+v(t)+s(t)

where C(t)+c(t) is the total capital stock invested at t, c(t) is that
portion that is actually consumed and C(t) that which is not consumed.
At the end of the period, C(t+1) is the value of stock that can be used
in the next period. If there is moral depreciation,  then C(t+1) < C(t)
or C(t+1)+x=C(t) where x is the amount of moral depreciation that
took place as we move from t to t+1.

But the real question is --  how does moral depreciation effect the
rate of profit?  Or does it?  It seems to me that at times labor could
become so productive that the moral depreciation term might be greater
than the living labor added.  This would be have no significance if
moral depreciation plays no part in rate of profit calculations.

>John E.
>"Must we look at physical units involved to determine the value "used up:?"
>
>Alejandro
>
>I think so and I think this is Marx's position in a passage like this:
>
>"...it follows that in the labor process the means of production transfer
>their value to the product only in so far as they lose their exchange value
>*along with their independent use value." I, Penguin, p. 311.
>
>
>My comment:  It seems to me that you would prefer that Marx rewrite
>this to say  "... only in so far as they lose their independent use
>value along with their exchange value."

Alejandro

No, I wouldn't. I interpret the passages surrounding that I've quoted as
saying that the effective consumption of use values is necessary in order
to transfer, i.e. to *preserve*, the value of the means of production.
Marx's accounting of the social expenditure of labor time takes into
account that society has spent some amount of labor time in a preceden
stage of the production as it's explained e.g. on Capital I, p. 294. The
transfer of value is a phenomenon occurring during the production process
which is, at the same time, a process of consumption. This is part of the
value-formation process.

[...]

My comment:  But you gauge matters by the degree to which the use
value itself it consumed;  hence that is your standard for computing
the amount of value transferred.  If half the value of the constant
capital is gone at the end of period production,  you can't really
say how mush value is transferred as you have to determine the
degree to which the use value of the means of production has been
used up.

>Alejandro
>
>Well, I'd say that it's a loss, similar to what happened if half of the
>stock had been, let's say, burnt...
>
>My comment:  But these "fires" are always happening in capitalism. Much
>of the "damage" they do is fully anticipated.  That is,  when an investment
>takes place,  the time over which depreciation takes place is not
>computed on the physical life of the asset but its economic or social
>life.  As I recall from discussions with Andrew K. on this list, Marx
>in V2 treats insurance payments or losses due to fire as deductions
>from surplus value.   Generally, he treats losses due to revaluation
>as depreciation in the "moral" sense.

Alejandro

I agree with this. The point I'm trying to make is simply that there is a
distinction between a) the transfer of value from the means of production
to the commodities in which value is preserved through the consumption of
use values by the fresh living labor --this include the "depreciation" of
fixed capital-- and, b) the processes in which the value of existing stocks
is modified due to change in productivity conditions.

I think b) is not the same that the "depreciation" occurring when the fixed
capital is consumed during the production process. I see that in the
Penguin version, p. 318, this process is described also as a
"depreciation": "If, as a result of a new invention, machinery of a
particuar kind can be produced with lessened expenditure of labour, the old
machinery undergoes a certain amount of *depreciation*..." However, if you
get the German original, Marx uses here another word "entwerten", which is
not "depreciation" but something like "devaluation", not used in English.

>"Further, you seem to take the position that one type of depreciation
>transfers value to the output and the other type does not.

The only thing both processes have in common is the word "depreciation" but
this can be an error of the English translation.

My comment:  Where are you reading ie what volume?   Let's go
to where the concept is first introduced in CAPITAL.  In the
German, Ch 13, Sec 3, b

Marx writes that "Der materielle Verschleisz der Maschine ist
doppelt."

Now we could look at "Verschleisz" as either depreciation or
simple "wear and tear"  as the two-fold (doppelt) types discussed
clearly describe the use value side of the matter.

However, Marx then goes on to refer to "moralischen Verschleisz."
In Vol. I,  this is the first time the term is used.

If Marx is using other words that are translated as "moral depreciation"
in other parts of his work, we may gain some insight into the
development of the concept itself by looking at this.  On the other hand,
why does he even bring up "moralischen Verschleisz"  as he introduces
to the manner in which a machine transfers its value to the product?
At any rate,  the different terms he uses for moral depreciation may
well be significant and I'm  certainly open to more on this topic even
from revisionists such as yourself.

But I'd still like to see where you put x as we traverse from one
period to the next.

John
```

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