[OPE-L:898] Re: Valuation Of Inputs

Alan Freeman (100042.617@compuserve.com)
Wed, 31 Jan 1996 12:15:01 -0800

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In (OPE-L:856) Jerry writes:
When discussing a *very concrete* topic (upgrading of computers
from 486 to 586), Alan writes:

> Capitalists are *forced* to upgrade their equipment, or
suffer complete ruin, by the phenomenal rises in productivity,
in use-value terms, of the labour-power of the workers using
new technology: not the cheapening of the existing technology
as such.

(1)assuming competitive conditions (which is appropriate for an
initial analysis of moral depreciation, but is not entirely
appropriate for analyzing the concrete question that he has

(2) assuming that there *is* a "phenomenal", rather than a
marginal, increase in productivity.

I think there is an avoidable misunderstanding involved; I was
using 486s and 586s purely as an illustration and it wasn't my
intention to discuss the very complicated concrete conditions
in the computer industry but to discuss moral depreciation in
the most abstract and general terms, taking an example not
actually of my choice but selected by others in the debate.

They are purely an example, like Marx's corn and cotton. You
can substitute any commodity to which the following apply:

(a) the commodity is cheapening, that is, its value is falling
due to innovation in the means by which it is produced

(b) the commodity itself raises productivity, so that
successive versions of it allow workers to make more of
whatever they make, in the same time.

Therefore, the question in general is this: is there any reason
for the capitalists to buy newer versions of a means of
production which are cheaper, but not more productive, before
the ones they possess are used up? My argument is, there is no
point in them doing this, because they will then have means of
production surplus to requirements to no useful end.
To be precise, I don't think they can secure a surplus profit
in this way.

But I do think there is a point in them buying means of
production of the same type which are more productive, because
if they are the first to do so, they will secure a surplus-profit
in this way, and if they are not the first to do so, they will
prevent their rivals from maintaining a surplus-profit.

The importance of this is that these superprofits are,
I think, what Marx in the Volume I discussion on Relative
Surplus Value treats as the imperative that forces
capitalists to innovate and is at the root of the 'continuous
revolutions in productivity' which characterise capitalism.
They are the key to the very 'law of motion of capitalist society'
with which Capital concerns itself, a law immanent to
capital and of its nature, which it cannot transcend.

A further point is that the gains from innovation are
asymmetric, a point not always understood by proponents
of the viewthat all technical progress is necessarily socially
progressive. Superprofits arise only in those sectors where the
productivity of labour is rising, I hypothesise, even though as
a result the outputs of these industries are cheaper.

Second, to clear up another misunderstanding, we could be
talking at cross-purposes. I completely concede that
capitalists might go out and buy new equipment before they need
to, or make buying decisions on the basis of false information
or cultural pressure. But what I think we also need to study
is, what effect does this have on the distribution of value?

Individual capitalists always have the option of acting against their
own interests. But I think we need to be able to distinguish
when they are doing so, from when they are not. Do they gain
any benefit from buying new stuff which doesn't perform any
better than what they already have? Is there a capitalist
imperative to behave in this way? I don't deny that people do
all sorts of things which are not essential for their survival,
but I think we ought to detach the subset of those things which
they *have* to do in order to continue being capitalists.

So I fully concede the points which Jerry makes below about
computers, but I wouldn't like to generalise from this to
depreciation in general; and I fully concede the points he makes
about capitalist behaviour, but we are perhaps at cross-purposes.

I'm only, at this point, interested in what is valid for all
industries and for innovation in general, not what applies to
only one industry and to particular kinds of capitalist
behaviour. I picked the example I was given; I'm happy to
change it.

I am also, however, concerned that we should not take
particular kinds of behaviour from particular industries,
and use these as the basis to make general conclusions
about behaviour in general and industry in general.

To make an analogy; some capitalists are moved by human
kindness to raise wages. And there are some industries
and some historical periods where the capitalists for reasons
of labour shortage, skill requirements or whatever, to establish
a relatively high value of labour-power - for example, the USA
for long periods of its history. But we couldn't conclude from
this that there is a general capitalist tendency towards
high wages.

I think it is interesting and useful to discuss these industries
and conditions, but inadvisable to draw general conclusions
about capitalism from them. (I'm not saying that Jerry
is trying to do this: I'm simply saying what my own
concerns are in this debate)

If it is felt that a concrete discussion about a particular
industry in more depth might be useful at this point I'm not at
all against that. But my own contributions so far were not
intended to be of this nature.