[OPE-L:1451] Re: Where does the value go?

Paul_Cockshott (wpc@cs.strath.ac.uk)
Tue, 12 Mar 1996 03:54:20 -0800

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Moral depreciation is a change in price; material depreciation
is a change in use values.

Value is conserved in moral depreciation *because*
it is a pure change in price and can occur independently
of any creation or destruction of use values, eg if
one commodity becomes more expensive and another
becomes cheaper. The fact that moral depreciation
normally takes place by a change in the conditions of
production should not be allowed to obscure this basic

So I am no longer sure exactly where or whether we
disagree. Certainly I don't think I disagreed with
anything in your statement above.

I think that there may still be grounds of
dispute between us.

A price depreciation can occur due to factors
other than material depreciation.

Consider the following example. I purchase
100 summer 1996 style shirts, and hold them in
a warehouse for 3 years. At the end of the period,
even if the shirts are in mint condition, I will
only be able to sell them to the retailers at
a discount. One could argue that this was not
a pure price change, since the labour which
performed the shirt making was no longer embodied
in a socially necessary form. Thus there was
a decline in the socially necessary labour
content, a value change.

If that is not clear enough, then try the following:
assume that I purchase 100 of the latest model
pentium computers chips, which have a current
price of perhaps $400. I store them for 3 years
and then sell them on to retailers. I will be
lucky to get $100 for them. This is not a
pure price change, it is a value change. Improvements
in fabrication over the next 3 years will - on
past performance - reduce the labour required
to make the chips about 4 times.
My loss of $30,000 is here not an effect of
circulation but an effect of changes in production,
clearly a value change.

Neither of these depreciations occurs in circulation.
They occur simply as a result of the passage of time
whilst goods are in store. Nor, in either case,
is there any good reason to suppose that the
value that I lost will be gained by anyone
else. Let us suppose that in each case, my order
for shirts and chips was additional to the
production that would otherwise have been carried
out, and that it thus makes no impact on the
general price level at the time of purchase.

We could drop this assumption, and it is still
clear that there is no net balancing of losses
on my part against gains on the part of others.

Suppose that my purchase of 100 pentium chips did
marginally raise their prices for a week, and that
this rise multiplied by the number sold,
was exactly equivalent to $30,000 in the week that
I purchased them. This, however is not a transfer
from me to Intel, but a transfer from the other
purchasers to Intel. If we aggregate all other
buyers and sellers other then me, they have not
qua buyers or sellers gained.

Holders of stocks of chips, would, transitorily be
able to raise their book price, but since the change
in price is not based on a value change, it vanishes
the next week.