[OPE-L:6488] Re: Obsolesence

Paul Cockshott (wpc@faraday.org)
Wed, 22 Apr 1998 09:47:37 +0100

John R. Ernst wrote:

> Paul C. asked:
> What evidence do you have that firms actually abandon equipment
> that could continue to be used profitably?
> John E. comments:
> I suppose one answer to your question is -- why would they not?
> If a capitalist can make greater profits at a higher rate of
> return with a new investment than with fully depreciated
> plant and equipment, why would the older process be used?

That is not an answer to my question.You were asserting that equipment
that could go on being used profitably
would be scrapped if newer equipment gave a higher rate of profit.
To establish that this occurs you would need to produce some
empirical evidence.

If we take your answer at face value, the response is that the fully
depreciated equipment has no capital cost. I am sure that at present
costs it would be unviable for Alcan to build a new smelter using 1911
hydro-power technology, but given that they have one, and that it
requires very little labour to run such a plant they chose to keep it
running. My guess is that old equipment is kept on until the current
costs of using it become unprofitable.

> One
> reason is that the capitalist does not have and can not get
> funds for the new investment. Note that what I am saying
> follows from Marx's idea that new techniques are not introduced
> merely to save labor but to increase profitability or the
> production of surplus value.
> In terms of evidence for this, I first point to the computer
> industry here in the States. Often 8088 machines, daisy
> wheel printers, etc. can be found in the trash even though
> they work. You almost have to pay someone to take them
> away.

I think that the computer industry is somewhat anomalous inthis case. The
old computers work, but they work differently
in the sense of not being able to run modern software. Since
the industry is very standards driven, it is wasteful to have
word-processors etc that use what are now non-standard file
formats since these will not interwork with modern ones.

> Here, in Manhattan, builders would be willing to take
> down almost any building under 6 stories if they could
> replace it with a larger one.

This I would suggest relates less to obsolesence than to theprice of land.

> It seems to me that the attitude "...if it ain't broke, don't
> fix (replace) it." stems from an inability to secure funds
> to replace it. When a lot of old stuff is still in use
> in a particular society, it may well mean that there is not
> enough surplus value to actually replace the older technique.
> To be sure, profits are still produced but not enough to
> purchase new equipment.

This view is totally at varience with the facts.
Production of surplus value both in the UK and the US is at
an all time high. The capitalist classes in these countries
are certainly not short of surplus value. The question
is what they do with it.