[OPE-L:2555] Re: FRP Models

John Ernst (ernst@nyc.pipeline.com)
Fri, 21 Jun 1996 06:56:12 -0700 (PDT)

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My message to you and your response were:

>I can't tell from your response whether or not you have
>an example of capital-using technical change. My
>remark, your comment and my response follow.
>The question is -- Does the precentage increase in constant capital
>invested exceed the percentage increase in passengers carried? If
>so, with a fewer other assumptions, you seem to have an example of
>what I'm seeking as the "normal" way investment would increase relative
>to output if we define the norm in the "usual" way Marx is interpreted.
>This would, of course, contradict Marx's own statements concerning
>increases in constant capital when machinery is already used in
>the process of production.


Relevant factor is the product of the number of passengers carried
times the value of their tickets. Value of tickets fell following
introduction of jumbo jets.


I agree that if we wanted to directly look at the rate of profit
the value of the tickets would be relevant. I am not taking things
that far at this point. I am simply looking at which increases
faster as technical change takes place -- constant capital or
output. Obviously, the next step would be to look at the manner
in which the value of the tickets changes. Your example would seem
to fall into the category of capital-saving technical change as the
growth of constant capital is less than that of output.