Re: [OPE-L] calculating the not rate of profit

From: Philip Dunn (hyl0morph@YAHOO.CO.UK)
Date: Tue Apr 03 2007 - 15:19:14 EDT

On Tue, 2007-04-03 at 14:06 -0400, glevy@PRATT.EDU wrote:
> > Have you seen what I have written on this?
> Hi Michael:
> Only what you've written on OPE-L about moral depreciation.  When the
> topic was discussed at length many years ago on the list I recall
> that we were making similar points.
> > Even here, you are the only one who seems to have understood.
> I'd like to find out _why_ there has been resistance to this idea among
> Marxians, which seems to me to be so basic to a comprehension of the
> process and effects of technological change in means of production.  I
> have my suspicions, of course ....
> In solidarity, Jerry


I agree with you and Michael.

I dub this approach "strictly ex-post value accounting".

Suppose a capitalist buys an asset and expects it to last 5 years. Let
the depreciation shown in the accounts be 20% per annum linear, for the
sake of the argument. Due to unanticipated technological progress, the
capitalist is forced to replace the asset with a new and better one
after 4 years. I think that the way that this should be accounted for is
by prior year adjustments. Depreciation is 25% per annum and value added
and profit must be retrospectively adjusted.

In general, long lived assets should be depreciated in proportion to
revenue. If sales revenue, in value terms, is:

year 1 : 100
year 2 :  50
year 3 : 150
year 4 : 100

Then ex-post depreciation is:

year 1 : 25%
year 2 : 12.5%
year 3 : 37.5%
year 4 : 25%

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