[OPE-L:4044] Depreciation and the Rate of Profit

john erns (ernst@pipeline.com)
Thu, 23 Jan 1997 22:21:20 -0800 (PST)

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In OPE-L 4043, Andrew continues our discussion by
computing various rates of profits using differing
concepts of moral depreciation. We need to do
this and I have no problem with looking at various
examples. However, in carrying out such calculations
we get little guidance from Marx. As I recall, for
him it is still a matter of surplus value to capital
"advanced" -- fixed and circulating. If we put aside
differences concerning moral depreciation (for a bit),
we still have a major question. Let me explain.

In his rate of profit calculations, Andrew includes
not only the undepreciated portion of the value of fixed
capital but also the depreciation fund itself. Thus,
abstracting from technical change, as long as the fixed
capital is in use, the capital advanced as fixed capital
remains the same. This would mean that the depreciation
fund is, by assumption, not used for further accumulation
until all the depreciation that can be recovered is
recovered. Quite honestly, I must admit I'd never considered
dealing with the matter in this fashion. For me, the
undepreciated fixed capital would be the only portion
of fixed capital that should be part of denominator in
computing the rate of profit.

I do think Andrew can make an argument for his method. But if
we are going to incorporate fixed capital into further work
that shows the accumulation process from period to period in a
truely dynamic framework (with techinical change), it is unclear
to me how useful it will be. I do think in the letter to
Engels of 09/11/1867, Marx's question concerning McCulloch
suggests that those depreciation funds could be used for
further accumulation rather than simply hoarded.