[OPE-L:5019] constant capital at current costs

fred moseley (fmoseley@laneta.apc.org)
Wed, 14 May 1997 23:13:55 -0700 (PDT)

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Even though I don't really have the time, I want to comment briefly on the
recent discussion between Duncan and John about my textual evidence that in
Capital Marx generally assumed that constant capital is valued at current
reproduction costs, not at actual historical costs (e.g. 3507).

DUNCAN said in (4959):

I find Fred Moseley's case that Marx revalued the stocks of assets held in
production to reproduction cost convincing ...

JOHN replied in (4964) with the following two reasons to question the
textual evidence I have presented:

I find Fred's efforts less than convincing primarily for two reasons:

a. I have no idea how Fred incorporates the idea of "moral depreciation"
into the revaluation process...

b. ... In my view, what is too often forgotten is that the determination
of value in this fashion has to be shown, not merely asserted... Two
questions remained unanswered: i.) Why and how does the value of, say, a
machine produced for sale fall from its social value to its individual
ii.) Why and how does the value of constant capital fall?

FRED replies:

Neither of John's two points is an argument against my textual evidence
that Marx himself in Capital assumed that constant capital is valued at
current costs. John presents no textual evidence to contradict my
interpretation or to support his interpretation. Rather, John's points
have to do with problems that would arise if one assumed current cost
valuation. John's points may indeed be problems for current cost
valuation, but if they are, then they are problems in Marx's theory as he
himself presented it in Capital (at a high level of abstraction). I think
that the textual evidence I have presented still stands and weighs heavily
in favor of the interpretation that Marx himself assumed current cost
valuation of constant capital in Capital.

To briefly consider each of John's two points.

(a). John says that he "has no idea how Fred incorporates ‘moral
depreciation' into the revaluation process." I am surprised by this,
because I explained before on OPEL (over a year ago in an exchange with
John) that I interpret ‘moral depreciation' to be a loss of capital which
occurs as a result of ongoing technological change (essentially the same I
think as Duncan's definition in (4968): "the revaluation of stocks of
existing machines in light of their value after technical change has
changed prices"). There is no problem of incorporating this ‘moral
depreciation' into the process of the revaluation of constant capital.
Indeed, ‘moral depreciation' is the MEANS BY WHICH constant capital is
revalued at current costs.

(b). John argues that it must be shown, not just asserted, how constant
capital can be valued at current costs. Maybe so, at a lower level of
abstraction, but even if this is accepted, it says nothing about what Marx
actually did in Capital. John seems to be arguing in effect that this is
what Marx SHOULD HAVE done, in the sense that anyone who assumes that
constant capital is valued at current costs SHOULD SHOW how this actually

I agree that this is an important task, at a lower level of abstraction,
especially related to crisis theory. But this is not a task that Marx
himself accomplished or even attempted to in any significant degree,
because Marx's theory in Capital remained at a high level of abstraction.
Marx generally assumed that constant capital (both the stock and the flow
of constant capital) is valued at current costs, not at historical costs,
as my textual evidence shows. The task to develop Marx's theory further
along more and more concrete lines remains for us to do.

It may be, at a lower level of abstraction in modern contemporary
capitalism, that something like John describes may happen, at least to some
extent. But I think that this is something different from what Marx
actually assumed in Capital, although it might be a valid extension of
Marx's theory to a more concrete level of analysis.

I will be out of town for the rest of the week, but I look forward to
returning to the discussion next week.