[OPE-L:4101] Revaluation

From: John Ernst (ernst@pipeline.com)
Date: Mon Oct 16 2000 - 00:05:36 EDT

Hi again, Andrew

At 10:45 PM 10/15/2000 -0400, Andrew in 4098 you wrote:
>OK, John,
>Thanks for responding with your rejection of my claim that "If a machine
>doesn't produce any output,
>it can't transfer value to that output"?
Let's be clear here before moving on to the next set of questions.
Are you saying the value of 5th machine in my example is not transferred
to the output?

You then continued:

>But what about my other question? -- it isn't the same question at all:
>: do you agree or disagree that "in Marx's theory, what
>: allows the value of a means of production to be preserved (by being
>: transferred) is that it is used in production.  If the same kind of
>: is *not* used in production, but depreciates through aging (a machine
>: idled in a slump, and rusts out), its value is lost along with its
>: use-value"?
>Actually, there are two questions here.  You might want to deal with them

I would agree that for value of the means of production to be transferred
there has to an output for that transfer to take place.  Thus,  I used
the example of a capitalist purchasing 5 machines to make sure that he 
always had 4 producing output.   Now if the 5th machine is never used or
becomes even useless due to a slump, it seems to me that its value must
still be accounted for.   

The question I posed albeit indirectly is -- Does it make a difference if
we view the "lost" value transferred to the output or deducted from the
value of the output?   

There seems to be at least 3 ways of looking at matters as
technical change occurs.   Let's begin by considering things
prior to any technical change.

  Start with a machine worth $100 "designed"  to last for 2 years to 
produce an output of $150 each year.  Ignoring all costs save the
machine, if things proceed according to design, then assuming
straight line depreciation, we would have


as an expression of the profit rate in the 1st year. And 


as an expression of the profit rate in the 2nd year. The "50"
in the numerator is both the depreciation charge and the 
value transferred. 

Now suppose that at the end of the 1st year the machine is 
rendered useless.

Now on to the 3 ways.

1.   If the machine has no value at the end of the period and
if inputs and outputs are simultaneously valued, then that
same 0 value is imputed to it at the beginning of the period.
the profit rate becomes infinite.

2.  If we see the value transferred as 50 despite the technical
change and want to account for the loss of 50 in the expression
for the rate of profit,   we would write 


and see that the rate of profit for this year is not 100% as expected
but 50%.   What do the 2 "-50's"   represent.  The first is the 
value transferred by use in the production process;  the second
could represent the loss in the value of the machine via moral 
depreciation.  This latter "50"  is the "x" which I mentioned 
to Alejandro.

3.  We could simply ignore the loss and continue to write

   (150-50)/100 .

Those seem to be the choices.


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