[OPE-L:3244] Re: TSS and the value of money

Paul Cockshott (wpc@cs.strath.ac.uk)
Thu, 3 Oct 1996 01:24:19 -0700 (PDT)

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>But, Alan, you can't have it both ways. Either constant capital and the
>rate of profit in Marx's theory are defined in terms of historical costs or
>they are defined in terms of current costs. The determination of constant
>capital and the rate of profit does not change depending on one's assumption
>regarding the value of money. The arguments you and Andrew have presented
>for the historical cost interpretation ("profit is an excess over the
>money-capital actually advanced to production," "the rate of profit is the
>rate of self-expansion of a pre-existing value," "historical cost valuation
>must be used to determine the actual movement of profitability over time,"
>etc.) apply equally as well to the case of a declining value of money as to
>a constant value of money. They just lead to a rising rate of profit rather
>than a falling rate of profit.

What Fred refers to here is a real enough effect for capitalists who
have borrowed funds. I would judge it to be a significant factor in
prolonguing booms in times of inflation.
Paul Cockshott