[OPE-L:6532] Re: Obsolesence

Allin Cottrell (cottrell@ricardo.ecn.wfu.edu)
Fri, 1 May 1998 21:00:39 -0400 (EDT)

On Fri, 1 May 1998, John R. Ernst wrote:

> I do not have that book here but will attempt to find it. In order
> to understand your results, let me see if the following can be used
> to clarify matters.

I can make the paper available in postscript or PDF format if
that's any help.

> 1. Does the "flow organic composition of capital" contain any
> depreciation charges?

Paul can correct me if I'm wrong, but I believe our "C" does
contain annual depreciation charges.

> 2. Assuming away depreciation charges, your results seem to say
> that if a capitalist spends $84 on raw and auxiliary materials,
> wages and profit will be about $100. Fixed capital aside, this
> suggests that quantity of living labor exceeds that of dead labor
> in the process of production. Over time, is the ratio, c/(v+s),
> rising or falling?

The figures I mentioned previously came from a "snapshot" (the
1984 input-output table). Paul and I have done some other,
longitudinal, empirical work (e.g. Capital and Class #55, Spring
1995): we find no pronounced secular trend in the organic
composition in the UK from the 1860s to the 1980s.

> 3. I think Marx would hold to the idea that ccc/v ratio would increase
> over time where ccc is the constant circulating capital. If we
> hold the real wage and prices constant, then with productivity
> increases ccc would rise as v remains constant since increases
> in productivity require more raw and auxiliary materials...

In physical terms, yes, but then the unit labour-content of such
materials is presumably also falling.

> 4. I assume that we are dealing only with industrial capital in those
> 101 sectors. That is, we have captured "s" before it is divided
> up by merchants capital, money capital, rent, etc.

Basically, yes.