[OPE-L:637] Forms of Tech Change(Digress)

glevy@acnet.pratt.edu (glevy@acnet.pratt.edu)
Sun, 3 Dec 1995 10:10:07 -0800

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Michael Perelman wrote in [OPE-L:636]:

> Here is my understanding of how technical change causes the rate of profit
> to fall. I will use a simple example.
> I am an accountant. To keep up with the competition, I buy an original
> IBM pc. My competitors respond by buying a 286. Even though I have just
> purchased a new computer, I have to scrap it to buy a 386. My competitors
> repsond with a 486. In the end we are all bankrupt.

(1) Why would "in the end" *all* of the firms in that branch of production
go bankrupt?

(2) If the above scenario was played out in all branches of production,
wouldn't *all* capitalist firms go out of business and the system

(3) *In practice*, doesn't the diffusion of new technologies take some
time and isn't there resistance frequently to new process technologies
from management and labor alike? For instance, in many branches of
production older computers (e.g. 386sx's) are still being used and in
some sectors investment in mainframe (rather than PC) computers has been
increasing (in fact, sales of IBM mainframes increased last year despite
virtually all projections). Doesn't this suggest that the process of
moral depreciation is not instantaneous and many firms resist scrapping
older process technologies? (Perhaps this has *something* to do with the
degree of concentration and the form of market structure in differing
branches of production).

In OPE-L Solidarity,