[OPE-L:7188] [OPE-L:706] Re: Re: Re: Market Values and Market Prices

Michael Perelman (michael@ecst.csuchico.edu)
Thu, 18 Mar 1999 20:18:04 -0800

Rakesh Bhandari wrote:

> 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

I assume that the above is obvious to you from your comment.

> ; 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.

For Marx, machines are often larger, more durable units of fixed capital.

> 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.

Think of a railroad replacing bunch of wagons. It is more durable, lasting a
long time, it replaces many of the wagon drivers for many decades.

> In both cases the quantity and value of the fixed constant capital are
> increased as against the
> variable."

Again, think of the railroad example.

> 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.

Yes, that was the point of my Keynes book.

Michael Perelman
Economics Department
California State University
Chico, CA 95929

Tel. 530-898-5321 E-Mail michael@ecst.csuchico.edu