[OPE-L:7185] [OPE-L:703] Re: Re: Market Values and Market Prices

Rakesh Bhandari (bhandari@phoenix.Princeton.EDU)
Thu, 18 Mar 1999 22:02:38 -0500 (EST)

Re fixed capital, I am having a tough time figuring out what Marx means here

Capital 3 (Vintage pp 374)

" The application of machinery reduces the price of the commodities
produced with that machinery owing to various factors,which can always be
reduced to the decline in [direct?rnb] labor absorbed by each individual
commodity; but in addition to this there is the decline in the portion of
value that goes into the individual commodity as the depreciation element
of the machinery. The slower the machinery's depreciation, the more
commodities it is distributed over, the more living labour it replaces
before the day when its reproduction falls due. In both cases the quantity
and value of the fixed constant capital are increased as against the

Let's say we work from Prof Duncan Foley's example in Understanding Capital

Marx seems to be talking about "corn-intensive" (!) technological change
that reduces cost prices by reducing in prices direct labor costs more than
the incuring of additional costs from the use of more seed corn in
material terms. Only at prevailing prices or a constant real wage will such
seed corn intensive technical change not reduce the rate of profit.

But once we treat fixed capital instead of seed corn, we understand that
the reduction of cost price can even be steeper. The longer the machine is
used, the less the depreciation cost and thus the less the cost price per

That is, once the move has been made to a capital intensive technology,
there are further reductions in cost prices the longer the machine is used.

Not only then does the machine replace direct labor, its slower turnover
displaces the labor that would have been required for the construction of
replacement machinery if machines were not enjoying such a leisurely
depreciation. Sturdier machines enjoy a slower turnover, which means that
Dept I
absorbs less labor to use the existing means of production to produce
additional means of production.

Marx makes the fascinating argument that we tend to understand only how
machinery replaces labor directly, not how machinery in its fixedness and
thus inherently slower turnover displaces the labor that would have been
required to reproduce if its turnover were up to speed with, say,
circulating capital.

Here seems to be an additional reason to reject Brenner: if intl
competition speeds up the rate of turnover by disallowing capitalists to
sit on mountains of antiquated fixed capital, Dept I should absorb more
labor to use the means of prod there to produce ever more advanced means of
production; and this addition of labor should thus increase the mass of
surplus value in the system, thereby exterting upward pressure on the
profit rate.

Yours, Rakesh