Subject: [OPE-L:1886] RE: Re: Stock and flow measures of the profit rate
Date: Fri Dec 10 1999 - 16:07:34 EST
> Assuming a flow rate of profit makes it easier to conceptualize the
> mobility of capital that occurs with the formation of prices of
I'm sure I'm being dim, but I don't see how.
> Yet, if we are going to talk about a "standard model" expressing Marx's
> formula for the rate of profit, surely it would be s/c+v where c would
> include constant circulating and constant fixed capital. Thus, the
> existence of capital as (partially) a stock (fixed capital) is presumed
> in the formula for the rate of profit.
> Now, what happens to the value of constant fixed capital when capitalists
> are "exiting" a branch of production is an interesting question. One could
> argue that the value of the constant fixed capital is transferred to other
> capitalists (i.e. re-distributed among capitalists) or you could claim
> that aggregate value is thereby diminished (and *not* conserved).
My tentative view is that it is a transfer: if changed conditions of
production change the value of particular kinds of either fixed or
circulating capital (and this is reflected in money prices) traditional
accounting wants to record this as capital gain (loss) for the firm. At the
macro level, this ought to be balanced by corresponding (losses) gains on
the books of other capitalists who own a different mix of means of
> could argue, in this connection, that value can be diminished because of
> the *material form* that constant capital can take within the production
> process and its limited and (usually) task-specific use-value.
From the point of view of my previous comment, this sounds
suspiciously like arguing that value can be destroyed by the act of exchange
-- in which case, presumably it could also be created thus.
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