[OPE-L:908] Revaluation of inputs

Alan Freeman (100042.617@compuserve.com)
Wed, 31 Jan 1996 18:39:22 -0800

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Mike L writes: [OPE 895, 31/1/96]
Fred (805) is very clear in showing the consistency of
Marx's position--- that the value of constant capital is
determined by replacement value rather than historic value.
I think there is no question about this.

Oh, but there is a question about this.

*At what time* is the replacement value estimated?

- At the time when the inputs are consumed?

- Or at the time when the outputs are produced?

That, and the question of stocks, is what the whole debate
is about.

I want to study Fred's detailed and considerate recent reply in
detail before responding, as well as attempting to integrate my
response with the issues raised in the discussion around Andrew's
posts, which I think are an important clarification.

But I don't think, after all the discussion we have had and
are having, that I can really let pass a statement that there
is 'no question' about this - paticularly when two posts are
outstanding giving detailed numerical examples showing that
contradiction immediately arises, if by the term 'replacement
value' we understand, as we must if we use the simultaneous
equation method, that the value of constant capital is given by
its value - whether replacement or reproduction value - at the
time of sale of the outputs it produces.

For reference, Jerry has reposted the first numerical example
which deals with stocks. For completeness, I reproduce below
the second numerical example for consideration by others who
may have missed it.

>From [OPE 865, 29 January 1996]

Fred writes (OPE 858, 27/1/96):

This is what Marx said clearly and over and over again:
the prices of previously produced means of production are
determined by their current reproduction costs. e.g.

"As a result of increasing productivity of labor, however, a part of the
existing constant capital is continuously depreciated in value, for its
value depends not on the labor-time that it cost originally, but on the
labor-time with which it can be reproduced, and this is continually
diminishing as the productivity of labor grows." (TSV.II. 416)
(my emphasis - AF)

Alan responds ... (parts omitted)

Even in the simplest possible case where there is no fixed capital
and no buffer stocks, so that these previously-produced means of
production have already been consumed, as far as I can see Fred's
citations - particularly this one - prove the opposite of what he

Suppose on January 1st 1990, the capitalists buy 100 tons of corn for
money worth 100 hours and with it produce bread during 1990.

Suppose that at the end of 1990, the corn harvest yields 50 tons of
corn whose value is 100 hours, the harvest being a bad one.

Suppose that two days before the 1990 harvest begins, the last
ounce of 1989 corn gets turned into bread, and one day later, the
bread gets eaten.

(a)Marx's citation specifically refers to "existing" corn. This
corn doesn't exist. It's been converted into bread, indeed
it has gone one stage further and been converted into workers,
or capitalists, as the case may be.

(b)How can this corn - or the bread - be revalued, when it doesn't exist
any more? And the labour power can't be revalued, because its
contribution to value is independent of the wage.

(c)If the corn is revalued, why stop at the corn produced in 1990? Why not
the corn produced in 1989, 1988, 1987,..........1641?

(d)If the corn produced in these previous years is to be revalued,
along with all other intermediate inputs, were we wrong or were we
right when, at the end of 1988, we calculated, without foreknowledge
of the 1990 harvest, an altogether different value to that which we
now impute to this long-gone corn?

(e) if the corn in all these previous years is not to be revalued,
so that only the outputs of 1989 are revalued, then how is it that
the inputs to 1989 are valued at their historic cost, but those
of 1990 are valued at their reproduction cost?