[OPE-L:4007] Re: More Depreciation Questions

andrew kliman (Andrew_Kliman@msn.com)
Thu, 16 Jan 1997 22:31:46 -0800 (PST)

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A reply to Michael P's ope-l 4003.

Michael wrote: "Andrew wrote that with proper foreknowledge, c can be
calculated. He is, of course, right. But rational foreknowledge is not
available. Capital experiences sudden revaluations, both positive and

I concluded ope-l 3999 with

"It thus seems to me that c could be calculated if one (a) used the above
concepts, (b) assumed straight-line depreciation, and (c) knew the
technological life of the machine, i.e., how long it is physically capable of
operating, at normal intensity."

The only "foreknowledge" needed is the knowledge of the technological life of
the machine. Ex ante knowledge of price movements is completely unnecessary.
But even the word "foreknowledge" used with respect to the technological life
of the machine is misleading, because the calculation I proposed is EX POST.
I'm sorry I didn't make that clearer, but let me do so now: the prices I
assumed were data, i.e., facts. Nothing is a fact until it *has occurred*.

Michael is quite right that "Capital experiences sudden revaluations," and
this makes ex ante calculation impossible or, at the very best, mostly
guesswork. In other words, *prediction* of values is impossible. But the
*calculation* of values still seems to me to be possible in principle. One
needs to know the technological life of the machine and what its replacement
prices *were* throughout its life.

This is not a "useful" calculation. But I don't think there's much that's
"useful" in Marx's theory. Rather, the importance of values being calculable,
assuming one has the data, is really that the theory is determinate, not
circular, not incomplete.

Has this helped clear anything up?

Andrew Kliman