3 J's (A Few Points)

John R. Ernst ernst at pipeline.com
Sun Nov 26 22:18:09 MST 1995


Jim, 
 
Maybe we "three J's"  have too many balls in 
the air at once.  At any rate, this note is 
meant to nail down a few points. 
 
 
1. On that extra value.  
 
I did not think I was doing anything clever in 
my post.  I was simply trying to look at a  
capitalist investment following the guidelines  
given by Marx.  At any rate, the 1920 is the  
social value created if there is no price  
reduction.   I then go on to drop the price 
a bit, using the same assumption Marx's makes 
in Book I, Chapter 12 where he discusses the  
concept of relative surplus value. Note that, 
in the next line of numbers, I drop the surplus 
value to 920, indicating the usual Marxian 
assumption.  Still, there is "extra" value 
produced just as there is in Marx when he  
distinguishes between social value and  
individual value.  
 
2. On the Technical Composition of Capital. 
 
In my discussions (mainly with Juan) I saw 
this as a battle over the role or potential 
role of index numbers. Economists use them 
all the time to indicate changes in the real 
wage and productivity for the economy as a 
whole.  Are they in Marx's CAPITAL?  No.  
Strictly speaking, Marx does says that 
the technical composition of capital is the 
mass of the means of production per worker. 
But, when I read your posts concerning  
measuring actual masses of inputs, I began 
to move to Juan's position.  As you know, 
I have suggested dropping the topic for now 
as it did not seem to helpful in getting  
clarity on issues in CAPITAL. 
 
The point I was trying to make is better made 
by Marx himself in the two passages from 
the Book III (pp 108-9 and pp 260, Int. Ed.) 
We should be aware that the vast majority of 
opponents and defenders of Marx's FRP would 
not accept the types of investments that Marx 
speaks would lead to a FRP.  Here, I refer 
to the works of John Roemer, an Analytical 
Marxist, Ian Steedman, a neo-Ricardian as well 
as professed Marxists like David Laibman and 
Maurice Dobb. 
 
3. On Moral Depreciation 
 
I certainly do agree with your point that there 
may be a connection between "moral depreciation" 
and the "turnover of fixed capital."  In a recent 
post, I gave an example of my interpretation of  
"moral depreciation."   In attempting to determine 
the depreciation charges on a piece of machinery that 
costs 1500 -- the capitalist is told by the engineer 
that the equipment will last 15 years and by his 
experience that, on average, machinery lasts 10 years. 
If he believes his engineer the depreciation charge  
would be 100 per year.  If he believes his experience, 
the depreciation charge would be 150 per year.  The  
difference between the two, 50, is what I call "moral 
depreciation."  It surely is related to the turnover 
time of fixed capital. 
 
4. On Engels 
 
I'd like to postpone a discussion of what Engels says 
following Marx's statement in Bk III, CH 15, Sec. 4. 
I do note in a post following mine, you found something 
I didn't.   
 
 
I hope this post does "nail a few points."   
 
 
Regards, 
 
 
John 


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