Not quite that simple. The moral depreciation can eat up capital quickly. That was the story of the late 19th C. U.S. Depression - at least part of the story. I don't have time to retell it here.
From: [email protected] [mailto:[email protected]] On Behalf Of Shane Mage Sent: Friday, February 08, 2013 9:02 PM To: Progressive Economics Subject: Re: [Pen-l] the tendency for the rate of profit to fall [was: R.P Wolff on Ricardo on Machinery On Feb 8, 2013, at 9:31 PM, michael perelman wrote: Technical change devalues capital; those losses do not figure in Okishio's model. If extended over a sufficiently long run, even very roughly approximate rates of capital consumption for each type of physical capital will combine physical and moral wear and tear, and average out over time (since everything will have to be replaced) so the calculation of actual changes in the rate of profit over several decades will closely approximate the actual trend. Precise calculation of its capital consumption might be useful for analysis of the market-value of a particular company's stock. Such calculation is as irrelevant as it is impossible for determination of long term accumulation trends. Shane Mage "L'après-vie, c'est une auberge espagnole. L'on n'y trouve que ce qu'on a apporté." Bardo Thodol
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