# [OPE-L:3480] Re: Stock Valuation

John Ernst (ernst@usa.pipeline.com)
Sat, 19 Oct 1996 11:51:14 -0700 (PDT)

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I think Alan's OPE-L 3459 is amazing in that
he starts from a bunch of use-values and gets
to the FRP in (when printed out) 7 pages.
Needless to say, there are more than a few
questions and, perhaps, problems as those of
us try to catch up with Andrew and Alan in
the world of TSS. Here, let me begin with
the idea of the production of use-values
by means of use-values.

Alan starts with

(1)* K = F + A + W + B

and describes F,A,W, and B as use-values which are
in existence at the start of production. According
to Alan, "During production A, W and B are consumed
and replaced by Q and we have

(2)* K(+1)=F+Q
End quote.

* My numbers, JRE

The Q at the end of production represents the produced
use-values which are available for use in the next
period of production. "F" seems to available as well.
But here is a difficulty. That is, are the means of
production which function as fixed capital the same
before and after use? Hence, to represent two
periods of production, I would suggest that we write:

(3) F(0)+A(0)+ LL(0) ---> Q(0) + F(1)

where F(0) is the stock of the means of production
functioning as fixed capital in the production
process. A(0) is the means of production functioning
as raw and auxiliary materials in the production
process. LL(0) the living labor used in production
to create the output of new use-values Q(0). F(1)
is the means of production that functioned as
fixed capital in production and available for use
in the next period.

Now, let's look at Q(0) a bit more closely. The
use-values it represents can function as consumer
goods as production takes place in the next period
or as means of production in that period. We
can write:

(4) Q(0) = W(1) + B(1) + A(1) + Z(1)

W(1) are the use-values to be consumed by workers
in the next period, B(1) are the use-values to
be consumed by capitalists in the next period,
A(1) are the raw and auxiliary materials to be
productively consumed in the next period. Z(1)
represents the newly produced means of production
that can function as fixed capital in the next period.
To represent the production process in the next
period, we can write:

(5) F(1)+Z(1)+ A(1) + LL(1) ---> Q(1) + F(2) + Z(2)

Both F(2) and Z(2) thus represent the use-values of
the means of production that served as fixed capital
in this period of production and are available for
use in the next period.

_______________________

Why introduce the aging of the means of production
serving as fixed capital in the production process?

For now, I see two reasons.

1. It will help us in tracking depreciation from period
to period.

2. It avoids any confusion between use-values used in
n processes versus those used in less that n. That is,
I do not think a 2 year old machine is the same as a
5 year old machine, etc. This makes such a distinction
clearer.

__________________________

Given that we have a way of representing the production
of use-values by means of use-values, we can then proceed
to assign values to them and to track the valorization
process in time. Prior to proceeding with that, I wonder
if there are better ways to represent the aging process of
fixed capital. As far as I know, most representations are
made under the assumption that technical change is not
taking place. Hence, I do think we need a way to capture
both aging and technical change within the accumulation
process.

John