[OPE-L:1075] Re: Moral depreciation again

Duncan K Foley (dkf2@columbia.edu)
Thu, 15 Feb 1996 14:24:41 -0800

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On Thu, 15 Feb 1996, Allin Cottrell wrote:

> Duncan [1072]
> > Maybe the first thing to do to sort these issues out is to locate the
> > problem of moral depreciation theoretically. It seems to me it's an issue
> > of how capitalists compete: if they anticipate more rapid obsolescence of
> > capital in one sector than another, they will require a higher profit
> > rate in the first sector to compensate for their anticipated capital
> > losses. On the other hand, it doesn't seem to affect the new production
> > of value by living labor.
> I agree: the "pricing to cover moral depreciation" argument makes good
> sense at a microeconomic level (comparison between sectors). But, to
> repeat an earlier question to John, how is that argument supposed to
> 'scale up' to the economy as a whole? If capitalists are able to raise
> prices _generally_ to cover themselves against moral depreciation, why
> didn't they raise prices already, to make higher profits?

I would say they can't make higher profits just because technical change
makes equipment obsolete. The limit on profits at the level of the
economy as a whole is the rate of exploitation.


> Allin.