[OPE-L:4203] Revaluation

From: John Ernst (ernst@pipeline.com)
Date: Sat Oct 21 2000 - 16:36:18 EDT


Thanks for your 4175.   Let me review matters briefly and 
then comment. I gave an  example of a capitalist purchasing 
5 machines but only using 4 in production.  The 5th machine 
was solely a back-up to the other 4.   In 4175, you took 
the position that the value of the 4 machines was 
transferred to the output while that of the 5th was a loss.  
That loss was to be deducted from "operating profit", P,  
so that "realized profit" becomes P-V where V is the value of 
the 5th machine.

My comment.  Let me, at first, for the sake of discussion, 
agree that the 5th machine's value is not transferred to 
the output.  Let's also assume that the total living 
labor involved as the machines transfer their value is L.  
If all circulating capital costs are negligible, 
then the total value of the output is 4V+L or the 
value the 4 machines plus the living  labor.  L is thus 
what you call the "operating profit."  To get the realized 
profit, you subtract from the operating profit the value 
of one machine, V.  Now if the total value of the output 
remains the same before and after this distinction between 
types of profit, we can write

      Total Output =  (4V+V)+(L-V)

Our difference on these matters thus comes into sharper focus.
If I were to view  the total value transferred as 5V and you
see it as 4V, then I'm looking at the living labor added to the
output net of any losses due to "waste",  you find it helpful
to use the terms "operating profit" and "realized profit."  
Put another way,  I would see the 

      Total Output = 5V + A

where A is L-V.

If that one V were a loss due to moral depreciation, I think
the our differing ways of viewing the total output would still

Let me stop here and simply say that I think our next step is to look
at these differences as we consider the falling rate of profit.




This archive was generated by hypermail 2b29 : Tue Oct 31 2000 - 00:00:11 EST