[OPE-L:6478] Obsolesence

John R. Ernst (ernst@PIPELINE.COM)
Sat, 18 Apr 1998 14:49:49 -0400 (EDT)

Do capitalists waste resources as they abandon fixed capital
when it is no longer profitable and not physically worn out?
Maybe the answer to this question is obvious. But it hasn't
been to me and, as I recall, to others on the list.

Let's take an example. Suppose that the annual cost for the
stock of circulating capital is $6000 -- $5000 in constant capital
and $1000 in variable capital. The output produced at the end
of each year sells for $7000. If the fixed capital is
fully depreciated, then the return on this investment would be
1000/6000 or 1/6.

If the fixed capital is not totally worn out, then the only reason
it may be declared obsolete is that the output can be produced
with new fixed capital at a higher rate of return of, say, 1/5.
Of course, this assumes that the capitalist has enough capital to
invest in the new technique. The old fixed capital is abandoned.
Yet, before we take it to the scrap heap, let's take a examine it
a bit more closely.

Using it, workers can still generate surplus value. Indeed, they
can do so until the price of the output drops below $6000 with
the assumed input prices or until the machine is physically worn
out. If the fixed capital is abandoned at the end of 6 years but
can produce surplus value for 12 years, then half of the labor
time that produced the fixed capital is, from a rational standpoint,
wasted. That we often fail to take this into account simply
shows that capitalist obsolescence is so ingrained that it
seems natural.

Given fixed capital is rendered economically obsolete prior to
its becoming incapable of generating any surplus value, capitalist
society wastes a certain percentage of the labor that goes into
the production of fixed capital. That percentage depends on the
the difference between the economic life of fixed capital as defined
in capitalism and the life of fixed capital in a rational society.