[OPE-L:5186] capacity utilization and the transfer and depreciation of the value of means of production

From: Gerald_A_Levy (Gerald_A_Levy@email.msn.com)
Date: Fri Mar 16 2001 - 08:48:36 EST

I want to expand on [5178] by introducing a related
question: capacity utilization.

I. In discussing the table below, I said nothing about
capacity utilization. However, I did suggest that value
transferred by the means of production can be seen 
as a non-linear process. However, in reconsidering
the table below, I think that (although non-linear
explanations are possible) one could get these
numbers through a linear relationship between
*working hours* (i.e. the actual production time
that the means of production are employed) and
*value transferred* by the means of production.

This was my original table:

(Table 2)

Year                       Transfer of Value
------                        ------------------------
1                                  10
2                                  20
3                                  30
4                                  10
5                                  30
Total:                           100

Now let's modify it as follows:

(Table 2A)

Year Value Transferred Shifts/day Working hrs/day
 ----          --------                ------             ---------
1               10                     1                   8
2               20                     2                  16
3               30                     3                  24
4               10                     1                   8

In the above table, the working week was assumed
to be 5 days/week. It can be very easily shown 
that if one extends the working week from 5 to 6
or 7 days/week then we will observe the same 
effect: i.e. as the workweek is extended the value
transfer from the means of production is hastened.

II. The above provides a powerful incentive for
capitalists to increase capacity utilization. It
also provides an additional incentive to increase
the length of the working day and the length of
the workweek for workers. 

While capacity utilization is not often discussed
by Marxists and full capacity is ordinarily assumed
in many models and illustrations, it is important
to note that in reality there is hardly ever full
utilization of existing constant fixed capital capacity.

The implication of the above could be, then, that if
there is underutilization of fixed capital capacity
then the transfer of value of the means of  production
to output is slower than what it would have been
with full capacity.  Indeed, one could easily show
that, assuming a fixed "lifetime" for constant fixed
capital, if there is severe underutilization of capacity
then the value transferred by the means of production
will be *less than* the value of the means of 
production. Thus, value can be "lost" if the means
of production are underutilized to the extent that the
fixed capital "dies" (of old age) before the full value of
that fixed capital has been transferred to output.
In the aggregate, this would suggest a systematic 
loss of value.

III. We have not considered how the "moral 
depreciation" of constant fixed capital enters into
this process.  Technological change in the production
of means of production can render older means of
production prematurely obsolete. I.e. there is a
devaluation of the older fixed capital caused by
moral depreciation. Yet, as we have discussed
before (and has John E has emphasized) capitalists
-- at least to some degree -- expect moral 
depreciation rather than assuming that their constant
fixed capital will die a "natural death" due to physical

The clear implication of this is that moral depreciation
provides additional incentive to increase capacity
utilization and thereby to ensure that as little as
possible of the value of their means of production 
are "lost" due to technical change. In other words,
it provides additional incentive to put the means
of production "to work" in the production process
immediately after purchase and to use that fixed
capital intensively especially in the early years
of its "life".

In solidarity, Jerry

PS: In reply to Steve K's [5183-4] -- I view use-value
as quality, exchange-value as quantity, and value
as a unity of quality and quantity (this is why I
suggested at one point that use-value stands in
opposition to exchange-value -- a point Chris A
and I discussed last year). 

Thus, my perspective is that use-value is not
quantitative, BUT I am willing to listen to your
arguments as to why:

a) you think this is a logical extension of Marx's
philosophy; and

b) why you think it is a superior way of 
conceptualizing use-value.

I.e. I want to hear the arguments themselves rather
than the assertions.

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