[OPE-L:4405] Transformation & Fixed Capital

John Erns (ernst@pipeline.com)
Mon, 17 Mar 1997 01:11:15 -0800 (PST)

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Commenting on my 4388, Fred states:

John, I don't think that Marx abstracted from fixed capital in Chapter 9,
or at least not completely. His two examples on p. 256 (Penguin) take fixed
capital into account and calculate prices of production according to the
following equation:

ppd(i) = k(i) + r F(i)

where k(i) is the cost price (flow), F(i) is the fixed capital (stock) and r
is the general rate of profit. k and F are taken as given and r is
predetermined by the analysis of capital in general in Volume 1.

What is the problem with this? I think the key is NOT to start with given
physical technical conditions. Then fixed capital poses insurmountable


Fred, I am willing to start with something other than "given physical
technical conditions." Indeed, I'd start with values, prices, prices
of production, or whatever. Right now, that's not the issue. The
difficulty that I was trying to get it involves the ages of the fixed
capital. (like Reuten, I call it stratification; Duncan (in 4498),
following Dumenil and Levy calls it vintages)

If we are reading Chapter 9 of Vol. III as an attempt to show what
prices of production would be should the rate of profit be equal in
each of the sectors involved, then I see no reason why we are referring
to the "r" in your equation above instead of a rate of return on
investment, rri, to which Dumenil and Levy refer. Neither "r" nor
"rri" can be known ex ante. Each can be anticipated using, say,
current prices, assumed economic lifes of fixed capital, some
method of depreciation, etc.