I am sorry I do not have time for a more detailed response to this interesting thread. One of the themes I have been playing with in my writings is the idea that industries with high fixed costs and low marginal costs are prime candidates for bankruptcy without some constraint on competition.
This idea is a variant on Marx's thinking on the OCC, except that Marx looks at this from the standpoint of the total economy rather than an industry. Only living labor creates surplus value. With a high OCC, small amounts of living labor have to carry the costs of constant capital. This requirement becomes increasingly difficult in a period of rapid that technological change, which devalues existing capital and creates pressure for replacement. In Railroading Economics, I make the case that this sort of condition was rule during the late 19th century. -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail michael at ecst.csuchico.edu michaelperelman.wordpress.com
