[OPE-L:4352] Re: Problems in Vol. III

Paul Cockshot (wpc@cs.strath.ac.uk)
Tue, 11 Mar 1997 05:25:11 -0800 (PST)

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Ok, so the rate of profit may rise the next year under
your assumptions. Where is the problem?

Profit rates do fluctuate from year to year.

> From: john ernst <ernst@pipeline.com>
> To: Multiple recipients of list <ope-l@anthrax.ecst.csuchico.edu>
> Subject: [OPE-L:4332] Problems in Vol. III
> Date: 10 March 1997 18:28
> >
> Granted the capitalist with only circulating capital has
> "the safer position." Unfortunately, I failed to be
> explicit about my assumptions concerning the capitalist
> with the less safe position. As he collects his $200
> in profit for the first year of his machines existence,
> he also receives some monies for depreciation of the
> machine. Thus, assuming price stability, the first
> capitalist can invest the $1000 again and get a profit of
> $100. Given straight line depreciation, the second
> capitalist need only invest and/or tie up $1900 to get
> his profit of $200. His rate of return seems to be
> increasing as he withdraws funds from this process via
> depreciation. The rates of return which, at first, seemed
> the same, diverge over time as the capitalist with the
> machine withdraws funds collected as depreciation. Risk
> aside, of the two this capitalist seems to be in the
> better position. Agreed?
> If so, how we compute the rate of profit becomes the problem.
> John