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

Date: Tue Apr 03 2007 - 19:39:16 EDT

> 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.

Hi Phil:

Are you sure you agree with us?

The above is a type of "rule of thumb" that Michael and I have been saying
can't reliably be used to accurately anticipate sudden technological
changes in means of production.  What you are doing is basically proposing
a depreciation schedule which takes into account the *expected* rate of
moral depreciation. Yet, what is the expected/anticipated rate of moral
depreciation other than a guess based on past rates of moral depreciation?
 The actual extent of moral depreciation is only known ex post.

In solidarity, Jerry

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