[OPE-L:981] Re: Missing the Mark

John R. Ernst (ernst@pipeline.com)
Wed, 7 Feb 1996 10:35:10 -0800

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I think your post (OPE-979) raises some important issues.
Here, of course, I speak only for myself.

You state:

"Are we missing the mark by trying for so much quantitative precision about


Value is the set of social relations that binds agents together as they
interact in the market. These value relations replace the direct command
of the slave owner or the authority of the feudal lord.

Although these relations appear to be "just" in classical pol. economy,
Marx tries to make clear what is going on.

On the most abstract level, he can show profit comes from the sale of
labor power at its value. Then the presentation takes more complexity
into account.

Now we are trying to nail the system down to the 8th decimal point. Do we
value constant capital at the beginning of the production period, at the
Or why not at the moment the capitalist decides what the price will be?

I find these questions interesting, but then I ask myself what difference
answer would make. Would it have any political consequences? Or are we
trying to set out a world that we can model as an end in itself?"

John responds:

I think Michael's questions are worth a response since they
may keep us from going off the deep end as well as to focus on
the crucial issues (if they exist). In brief, I do hope that
we are not trying to construct a "model as an end in itself."
Why do I think the discussion is worth time and effort?

1. Most models of Marxist economics are attempt to show that
Marx was wrong. Indeed, so wrong that one would have
to conclude that he was a bit stupid. By challenging
the assumptions behind these models we begin to undo
the relatively simple models offered as refutations.
Have we done this? Not yet.

2. In those models, technical change generally does not affect
valuation. How could it? All valuation takes place at a
point in time and thus change itself does not exist. Our
discussions involve ways to capture change in the modeling
process. Thus, I do not think we are trying to nail things
down to the "8th decimal point" but rather we seek to find
ways to describe Marx's notion of accumulation while
"refuting" the models dismissing Marx.

3. Depending upon one's concept of valuation, you can approach
the notion of accumulation in CAPITAL two different ways.
That is, if one accepts the idea of simultaneous valuation,
then the idea of capital-saving technical change is seen
as foreign to Marx's general description of the accumulation
process. Criticism of his falling rate of profit is often
based on such change. How often have we heard that Marx was
appropriate to 19th Century capitalism but not that of the
20th? To a large extent, such observations can be traced to
valuation. Without simultaneous valuation, it is possible
to see Marx himself including capital-saving technical change
as part of the accumulation process.

4. Your question as to the timing of the depreciation of fixed
capital is on the mark. No doubt as capital accumulates there
is "moral depreciation." I have maintained that it is taken
into account as the capitalists set up their depreciation
schedules. Others have said that these loses are deductions
from surplus value. No doubt, in reality, both positions are
right as no capitalist could have perfect foresight even with
past experience. On the other hand, they are not stupid. Some
allowance for such depreciation must be made. If we claim they
are not, then we should not only give reasons but also take
care by not using such losses to develop a theory of the
falling rate of profit.

5. Ultimately, the manner in which we see the depreciation of
fixed capital relates to the turnover of fixed capital. In
turn, I think Marx was on to something as he noted that there
was a relation between turnover time and the periodicity of

Well, Michael, I hope this partially answers your concerns. Let
me close with a question or two for you. You have written that
shortly after the publication of the first edition of Book I
of CAPITAL, Marx did some calculations concerning turnover
time and the periodicity of crisis. Do any of these notes exist?
Are they published?