[OPE-L:4055] Appreciating Depreciation

Gerald Lev (glevy@pratt.edu)
Sat, 25 Jan 1997 11:31:18 -0800 (PST)

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I. Appreciating Use-Value

"Fixed capital -- hence this particular economic form -- is to a
large extent dependent on use value. The duration of the
depreciation of the machine, i.e. TO WHAT DEGREE it enters into the
price of a commodity during a given period of turnover, and how
long the component of capital represented by it circulates, depends
on the use value, i.e. on the greater or lesser durability of the
machine. The turnover time of the total capital therefore depends
on this: and CHANGES in the relation between the organic components
of the capital are also considerable affected by this. 4) The whole
distinction between the labor process and the valorization process
-- hence also the increase in the productivity of labour while
labour time remains the same -- the whole of the development of the
productive forces -- concerns use value, not exchange value. But it
changes and modifies the economic relations and exchange value
relations themselves." (_Collected Works_, Volume 33, p. 147,
emphasis in original).

In our discussion of moral depreciation and "BETTER MACHINES", have
we really appreciated the role of use-value in this process?

As new -- BETTER -- machinery becomes constant fixed capital, what
happens to the value of the machinery that the new machinery replaces?
The "old, worse" machinery looses (all or part of) its use-value and
hence its value and exchange-value.

Unless we stipulate that all capitalists are stupid without any
memory (having been lobotomized by the accumulation process?), we
would expect that capitalists are aware of this process. Doesn't
this then affect the amount of money capital advanced for fixed
capital in any given period of production? That is, capitalists
can't be *so* stupid that they don't realize that moral
depreciation can, has, and "will" devalue the existing and future
stock of constant fixed capital.

II. Appreciating the devaluation of c and overwork

In VI, moral depreciation is related to the length of the working day.
The following also relates to that theme:

"The SUPPRESSION of all precautionary measures aimed at safety,
convenience, and health of the workers belongs here [in the
section on "Diminution of Outgoings for Constant Capital", JL];
e.g. in the coal mines, similarly in the factories proper, a large
part of the *battle bulletins* [what a great expression!, JL] (see
the half-yearly factory REPORTS) of the wounded and dead of the
industrial armies arises from this source. Similarly, lack of space,

The issue of health and safety for workers is thus related here to
the devaluation of c. In the next paragraph there is a succinct
explanation of the meaning of devaluation of c which deserves a
careful reading:

"The *devaluation* of constant capital as a result of new inventions,
whereby it can be reproduced more cheaply and with better quality,
more effectively, hence the labour time contained in it is no
longer that socially necessary -- and improvements come thick and
fast particularly when new machines are first introduced -- is one
of the main reasons why *overwork* and the prolongation of SURPLUS
labour time -- OVERTIME -- goes hand in hand with machinery (see
the examples in Babbage). The circulation time within which the
value of machines, etc., and other components of fixed capital
is in practice not determined by the time during which they last
but by the quantity of labour time during which they serve as means of
production, and in general by the dimensions, the duration, of the
labour process during which they function and are used up." (Ibid,
p. 152-153, emphasis in original).

Although Marx does not *say* "moral depreciation" above, clearly
that is part of what he is talking about. Some key parts to note
include his explanation of labour-time which is no longer
socially-necessary and the determination of the circulation time of
fixed capital.

III. Appreciating fixed capital, absolute s, and capacity utilization

"Machinery, etc. is valorized over a lengthy period, during which
the same labour process is constantly repeated in order to produce
new commodities. This period is determined by the average time it
takes for the whole value of the machinery to be transferred to the
product. The extension of labour time beyond the limits of the
normal working day shortens the period over which the capital laid
out in the machinery is replaced by the total amount of production
[...] When new machinery is introduced the improvements come thick
and fast. Thus a large part of the old machinery loses part of its
value or becomes entirely unusable before it has passed through its
circulation period, or its value has re-appeared in the value of
the commodities. The more the reproduction period is curtailed, the
slighter this danger is, and the more the capitalist is able, the
value of the machinery having returned to him in a shorter period,
to introduce the new improved machinery and sell cheaply the old
machinery, which can again be profitably employed by another
capitalist, since it enters into his production as from the outset
the representation of a smaller magnitude of value." (_Collected
Works_, Volume 30, p. 332-33).

Note that Marx is saying here, in effect, that if the reproduction
period is shortened, then the capitalist can sell the old machinery
at a higher price to another capitalist who can then "profitably
employ" that machinery. Yet, under what conditions would it still
be profitable for the other capitalist to employ the older machinery?

Marx continues:

"Yet the capitalist is by no means concerned merely to get back the
amount of value laid out in the fixed capital as soon as possible,
so as to protect it from devaluation and to possess it again in
disposable form: he is concerned above all with the profitable
employment of this capital -- of the great quantity of capital
fixed in a form in which it both decays as exchange value and is
useless as use value, except to the extent that it is brought into
contact with the living kind of labour whose fixed capital it
constitutes. Since the part of capital laid out in wages
has become much smaller in relation to the total capital --
particularly in relation to the fixed capital -- and since the
magnitude of surplus value depends not only on its rate but on the
number of working days simultaneously employed, while profit
depends on the ratio of this surplus value to the total capital,
the consequence is a fall in the rate of profit. The simplest
means to prevent this is of course to prolong the absolute surplus
labour as far as possible by prolonging the working day, thereby
making the fixed capital the means of appropriating the greatest
possible quantity of unpaid labour. If the factory is not in
operation, the manufacturer regards this as being robbed by the
workers, for his capital has obtained a form in fixed capital in
which it is directly a draft entitling him to alien labour." (Ibid,
p. 333).

Note the relationship suggested above of absolute s and capacity
utilization to the FRP.

In solidarity, Jerry