[OPE-L:1938] Re: depreciation, profits, and subjectivity

Gilbert Skillman (gskillman@wesleyan.edu)
Wed, 24 Apr 1996 10:39:56 -0700

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> Capital values are, at least in part, subjective. Revaluations
> do not come instantaneously. They come about via competition.
> Here is an example: my wife's best friend has a print shop with
> outdated equipment. It is failing. It has a negative profit.
> Should she shut down their business? So far, they are convinced
> that "things will turn around." I think that she is typical in
> that respect. They hope to hang on, somehow believing that their
> investment still has value. It does not.

But Mike, if you _know_ this, then presumably "the market" does too,
and thus the capital's value is not subjective, contrary to
suggestion--no matter what the present delusions of the current