[OPE-L:4328] Re: Problems in Vol. III

Paul Cockshot (wpc@cs.strath.ac.uk)
Mon, 10 Mar 1997 01:33:58 -0800 (PST)

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>From the standpoint of the rate of profit the situation
of the two capitalists is the same. From the standpoint
of risk, the capitalists with his money in circulating
capital is in a safer position, since it can be moved
more rapidly into a different line of activity.
> From: john ernst <ernst@pipeline.com>
> To: Multiple recipients of list <ope-l@anthrax.ecst.csuchico.edu>
> Subject: [OPE-L:4307] Problems in Vol. III
> Date: 07 March 1997 17:05
> > Paul, I do not get it. Let's me pose a question that, hopefully,
> can help me gain some clarity. Let's assume one capital that is
> composed of a stock of circulating capital of $1000 that produces
> an annual profit of $100. The capital turnsover once a year.
> The rate of profit would be 10%. Let's also assume another
> capital of $2000 of which $1000 represents investment in a machine
> that will last 10 years and the other $1000 an investment in
> a stock of of circulating capital. It produces an profit of
> $200 in the machine's first year of use. In that year, it would
> seem that the two rates of profit are the same. Assuming
> capitalists wish to maximize their returns, which capitalist would
> you want to be?
> John