[OPE-L:1327] Better Machines

John R. Ernst (ernst@pipeline.com)
Tue, 5 Mar 1996 22:06:50 -0800

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It seems to me that in the positions taken by
Alan and Andrew on "cheaper machines", we seem
to never arrive at the idea of "better" machines.
Yet. the concept of "moral depreciation" encompasses
both better and cheaper machines. Indeed, without
"better" machines the concept itself seems at best
the source for a philosophical debate. (Apologies
to those in the field.)

Let's look at these cheaper machines. Assume that
is all that happens -- they get cheaper and cheaper.
How long can one use a fully depreciated machine? As
long as it is physically capable of production? It
would seem so since once a capitalist has a fully depreciated
machine there is no way a cheaper machine can undersell
him. The limit is imposed by nature and not social

Of course, as a machine is used from period to period,
the cheaper machine becomes a threat as it COULD lead
to a lessening in the social value of the product produced
by the machine. In which case, capital is in trouble.
Further, as Paul Cockshott remarked some posts ago, it may
mean that capitalists have to make note of these cheaper
machines by diminishing the value of the assets they hold.

Let's consider the case where there is no cheapening of
machines in each of four periods which we assume is the
probable life imputed to them at birth. At the end of
the 4 periods, do they just cease to function physically
and peacefully expire? Or, are they put to death by the
capitalist production process itself in its quest for
greater profits? What brings them to this premature
death? Clearly, the culprit is a machine capable
of producing profit such that the profit rate of the
process in which the new machine is used is greater than
that in which the older, fully depreciated machine functions.

How do we assign quantities to the value transferred in each
period of the machine's life? If we are doing the books of
the capitalist, we might choose one of several different methods
of depreciation. If, on the other hand, we are attempting to
track the rate of profit in a model involving fixed capital,
we may choose to treat depreciation as part of an amortization
process. In so doing, cheaper machines appear as all the more
threatening since the recovery of capital increases as the
machine ages. Thus, Marx's innocent remark that depreciation
is both social and physical is but the introduction to a
complex concept all too often ignored.

At any rate, without too many numbers, I hope I have convinced
one and all that

1. By ignoring "better" machines and buying into the idea of
that "moral depreciation" means simply cheaper machines,
the limits to capital appear natural not social. That is,
the physical life of the machine becomes its social life.

2. If we compute the rate of profit with fixed capital,
the amount depreciated from period to period is no task
for the accountant.

Further, we should recognize that the "probable" life of the
machine is just that -- PROBABLE. A probable life of 10 years
may mean 5 or, in other circumstances, 15. The probable life
is an average based on experience. It probably (smile) varies
over time and across sectors.