RE: [OPE] Understanding Value and Use-Value

From: Philip Dunn <>
Date: Tue Apr 28 2009 - 17:24:34 EDT

On Tue, 2009-04-28 at 13:20 +0100, GERALD LEVY wrote:
> >>> How can zero goods have a non-zero cost?
> >> Ever hear of 'fixed costs'?
> > The fixed costs must be assigned to earlier or later periods.
> Hi Phil:
> This is not merely or primarily an accounting issue: of course,
> the accountants can play around with the numbers and assign
> costs to different periods in which they occurred.
> The following should suffice for an explanation of how
> zero goods can have a non-zero cost.
> Consider the following moment: before capitalist production can
> commence, the firm must purchase constant capital. Yet, typically,
> there is a temporal lag when the time when C is purchased and
> delivered and when the production site is built and organized
> efficiently. During this time, zero goods have been produced
> but the cost - due to fixed costs - is greater than zero. This
> is important for the firms: it is a major reason why they
> try to rush into production: i.e. because they recognize that
> during this period they are not only not making money but are
> actually losing money so they try to shorten the period as
> much as possible.
> On a related note, whether the transferred value of means
> of production will equal what the means of production are
> capable of depends on how efficiently the means of production
> are utilized, including the degree of capacity utilization.
> These aren't merely problems for accountants - they are
> problems for manufacturing engineers, designers, and managers
> - and can also be problems, in other kinds of ways, for
> wage-workers.
> Fixed costs, though, also present potential opportunities for
> workers. If there is a strike, the presence of fixed costs,
> including rent (and firm indebtedness, if there is any)
> means that the firm isn't merely not making money during
> the strike - they are actually losing money while there is
> a strike. This is a strong incentive to reach a
> settlement with the union or break the impasse in others ways
> such as employing strikebreakers.
Hi Jerry

Accountants distinguish between expenditure and expenses. Typically,
expenditures result in assets, inventories. Expenses or expired costs
reduce those inventories.

Accountants do not do money in, money out accounting. It's a bit more
sophisticated than that.

These expired costs are value transfers, measured in money terms.

Cost of goods sold = opening stock of constant capital plus purchases
less closing stock.


Accrued revenue = closing stock of commodity capital plus sales receipts
less opening stock

If, for any reason, accrued revenue is zero, cost of goods sold must be
zero. There is nothing to transfer value to.

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Received on Tue Apr 28 17:26:17 2009

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