[OPE-L:1345] Re: Better Machines

Paul Cockshott (wpc@clyder.gn.apc.org)
Wed, 6 Mar 1996 15:09:06 -0800

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Which will she do? If the gain in the anticipated production of
relative surplus value and productivity (and profitability including
possible "surplus profits") more than offsets the loss in capital values
already invested in Technology 1, then Capitalist A switches to
Technology 2 and vice versa, ceteris paribus.

In other words, what matters in terms of timing is the relative
efficiency of the new technology (Technology 2) versus the cost of
capital already invested in the "old" constant fixed capital (Technology
1) taking into account normal physical depreciation.

What's wrong with the above as a simplified scenario?

The issue of whether it is economical to switch machinery
is not quite the same as whether moral depreciation has occured.
Even assuming no change in the quality of the machinery, if
that machinery has become cheaper, the capitalists who purchased
the machines first will be competing with firms that bought
newer cheaper versions. The latter, will have to pass on smaller
depreciation costs and will thus undercut the first capitalists.
The first group are then forced to pass on only the new, lower
depreciation value each year. This does not depend on improvements
in machine quality.

Of course, in practice the two processes are mingled together
making such nice analytical distinctions rather pointless.