[OPE-L:4098] technical change & competition in regional & world markets

Gerald Lev (glevy@pratt.edu)
Wed, 29 Jan 1997 16:22:45 -0800 (PST)

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Alejandro R wrote in [OPE-L:4095]:

> No, he does not "feel" anything: capitalists have no
> feelings... They are hungry wolves... It is a matter of the
> market. <snip>
> Right. Bankers are anxious and capitalist B is even more
> anxious...

Last time I checked, anxiety was a feeling. :-)

If it is the market -- and the force of competition -- that makes the
wolves so hungry, what happens when market conditions and competitive
structure change? See Michael P's #4090 and my #4060.

> Right. That is the case. Of course "depreciated" machines
> for USA can be used in countries where the competition is
> weaker. For instance, in my country --Costa Rica-- an
> important proportion of the machines used by industry are
> second-hand pieces bought in USA, even in junk-yards!! <snip>
> That could be the case of Costa Rican capitalists because
> they, using "scrap" bought in a USA junk-yard (probably by
> weight), can produce in Costa Rica.

Now here's a topic worth discussing -- the uneven development of
technical change internationally. I would think that the second-hand
machinery purchased as scrap would be used by capitalists who are
competing only on the regional or national market since they could not
be able to produce commodities efficiently enough to compete on the world
market. If they were to compete with other "foreign" firms that use the
most efficient technologies, wouldn't they require protection from the
state in order to remain afloat?

On the other hand, as you note elsewhere, these firms may have a cost
advantage due to lower labor costs. Yet, can we expect that the advantage
due to lower labor costs will more than offset the disadvantage of
employing obsolete constant fixed capital (even at "scrap" prices)? I
don't see any real evidence that firms which employ inefficient
technologies are able to compete on the world market despite the lower
labor costs -- except in isolated instances. Yet, how isolated are these

In solidarity, Jerry