[OPE-L:6493] Re: Re: Obsolesence

Paul Cockshott (wpc@faraday.org)
Thu, 23 Apr 1998 11:23:51 +0100

John R. Ernst wrote:

> Ok, let's say profits are high. But relative to what? In neither the
> UK or the US do we see a great deal of investment in new techniques and
> the consequent jumps in productivity. Why?
> 1. It may that new and more profitable techniques are not available.
> 2. The markets for the increased outputs with the new techniques may simply
> not be there because of the lack of investments in new techniques.
> This is one of the stranger possibilities that capitalism produces.
> 3. The new techniques may actually be introduced elsewhere.
> To get at the empirical evidence that you want, the data we need would have
> to be at the level of the firm. Meanwhile, we can consider the situation in
> which a firm has enough surplus value to purchase the new and more profitable
> technique and ask why it would not do so.

I think that you are focussing too much on things like the rate of profit
andignoring :
1. The division of profit into profit of enterprise and interest.
2. The subdivision of the profit of enterprise into accumulation and dividends.

A prior condition of any investment must be that the rate of return is
greater than the rate of interest. Secondly, firms are under pressure from
the stock market to distribute a large portion of profit as dividends.

> Again, you seem to be saying that a given process of production is used until
> it is physically useless. True?

I would expect it to be used until the current cost of running it rose above
thevalue of the product, where by current cost I mean raw materials, maintainance

and wages.