[OPE-L:471] RE: Value of Constant Capital

John R. Ernst (ernst@pipeline.com)
Sat, 11 Nov 1995 12:27:04 -0800

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On Thu, 9 Nov 1995 wpc@clyder.gn.apc.org (Paul Cockshott) said:

>John E
>Paul must be making an assumption not part of my original
>query. That is, he assumes that the machine made in a more
>productive fashion sells for less. I said nothing of a
>price reduction for that machine. Yet, if we were to use
>his labor time accounting techniques, we would insist that
>I had lost the $250. To be sure some of this "loss" would
>be there whether or not there was a change in technique in
>machine production as it would be seen as depreciation. If
>the price of the machine didn't change, I'd question the
>sanity of any accountant who told me I lost $250
>in depreciation unless the new technique led to an IMMEDIATE
>price decrease.
>I did assume this. In industries where the rise in productivity
>is that great, ( semi-conductors and computers ), the fall
>in prices is equally rapid. One often sees adverts for second
>hand computers, where, the seller reckoning that the machine
>is half way through a 3 year life tries to sell it for about
>half the price that he bought it for. The problem is, that
>at that price one can usually buy a new model with twice the

I think we're in trouble with an LTV that simply assumes price
changes because of increases in productivity. Granted, these
days, we do see them in the computer industry. But, even if
we assume that the price of a machine drops dramatically, do
the producers using that machine drop their prices? Do they
then compute their rates of profit based on this new price of
the machine? Something is amiss here. Suggestions? Why
are we not using Marx's concepts of individual and social

John R. Ernst