[OPE-L:5024] predicting the future under capitalism

Gerald Levy (glevy@pratt.edu)
Thu, 15 May 1997 09:38:53 -0700 (PDT)

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John, responding to Fred, wrote in [OPE-L:5020]:

> I think you are still wrong on this one. For Marx, "moral depreciation"
> is part of the depreciation charges. It is the loss in value of
> fixed capital as better or, simply, cheaper machines are introduced. It
> is a cost anticipated by the capitalists according to Marx. It is not
> at all a surprise to them.

I think you are still wrong on this one, John. As the issues associated
with expectations also concern issues raised on the "ideal vs. real
value" thread, I am changing the subject line in order to broaden the

A) Before investing money capital in c and v, capitalists have certain
expectations concerning the rate and mass of profit. In that sense, the
expectations that capitalists have re market prices, demand, and cost all
enter into their decision-making and can, thus, affect the quantity of
money capital actually invested in c and v.

B) Whether those expectations concern future prices, future demand,
future technical change and depreciation (or whatever), they are merely
ex ante estimates ("guesstimates") which may be very different from the
ex post prices, demand, technical change (or whatever). When John says re
depreciation and technical change that "it is not at all a surprise to
them", he vastly overestimates the knowledge of individual capitalists
and the uncertainty inherent in commodity production and circulation.

C) Typically, capitalist estimates -- no matter how mathematically
sophisticated; no matter what amount of market research -- simply boil
down into projections that past trends will continue into the future.
Thus, they conduct market research into past trends re demand and/or
have questionaires re the quantity that would be demanded of a product if
it were produced now. Yet, none of this can guarantee that the products
that they produce _will_ have a use-value and an exchange-value. This is
because the decision re demand is _not theirs to make_ and they have _no
way of knowing for sure ex ante_ what will happen "in the event."
Similarly, capitalists may _estimate_ technical change and the rate of
obsolescence of fixed capital, but they have no way of knowing what
_will_ happen. This is because it is not something that they _can_ know
in advance with any certainty. For instance, they can not know what the
pace of technical change and the price of future means of production will
be whether they produce those means of production internally (since there
is a large degree of uncertainty associated with R&D expenditures) or
whether they purchase those means of production from other capitalists.
In this sense, capitalist production proceeds on a wish and a prayer.

D). When capitalists purchase labour-power, they similarly have
expectations about, for instance, the intensity of work and the
resistance of workers. Yet, these expectations may or may not be shown to
be accurate in the event since _workers themselves_ have something to say
about what the intensity of labor and workers resistance _will_ be.

E). Similarly, capitalists may expect certain changes in the rate of
interest and the rate of accumulation in their investment decisions. How
do they know that their expectations about the future will be accurate?
Quite simply, they don't.

G). In addition to anticipating the _possible_ or _probable_ reactions of
workers, capitalists have no way of knowing what their
relationship will be -- specifically -- with other capitalists,
landowners (e.g. will rent increase? by how much?) or the state (e.g.
will taxation on profits increase? will there be more regulations on
firms or deregulation?). Similarly, they have no way of knowing in
advance what will happen in the future re foreign trade and the world
market. They can not know _any_ of this ex ante since all of these
questions are answered _in struggle_ (among capitalists and/or among
different classes).

In solidarity, Jerry