Capitalist Economists on the Fatal 'Dialectical Internal-/Self-Contradiction of Capital[ism]' --
GLOBAL STRATEGIC HYPOTHESES --
Neo-Classical Economists on the Logic, Science, and Ethics of ‘Technodepreciation’.
Once again, we delve into the discourse, among capital’s ideological/scientific servants, about the capitalists’, and capitalism’s, fatal flaw of ‘technodepreciation’, i.e., of productive-force-growth-induced self-devaluation of past-accumulated capital-value.
Marxians can definitely gain -- a great deal -- from intensively observing, examining, and analyzing such discourses ‘‘‘psychohistorically’’’, that is, equipped with the «organon» of the Marxian paradigm of ‘psychohistorical materialism’.
See, for yourself, another case in point, below.
My commentary regarding these extracts is imbedded within them, or below them, in separated paragraphs, beginning with the label ‘M.D.: . . .’.
1.: “The output from equipment produced to-day will have to compete, in the course of its life, with the output from equipment produced subsequently, perhaps at a lower labour cost, perhaps by an improved technique, which is content with a lower price for its output and will be increased in quantity until the price of its output has fallen to the lower figure with which it is content.”
“Moreover, the entrepreneur’s profit (in terms of money) from equipment, old or new, will be reduced, if all output comes to be produced more cheaply.”
“In so far as such developments are foreseen as probable, or even as possible, the marginal efficiency of capital produced to-day is appropriately diminished.”
[J. M. Keynes, The General Theory of Employment, Interest, and Money, Harcourt-Brace, [NY: 1964], p. 141, emphases added by M.D. ].
M.D.: In this quote, Keynes states, in Keynesian lingo, essentially what Marx stated as follows: “The constantly ongoing devaluation of capital, owing to the increase in the force of production, has to be compensated ... .” [Karl Marx, Grundrisse, Penguin Books, 1973, p. 317]. The term “marginal efficiency of capital” was introduced by Keynes in his famous 1936 book entitled The General Theory of Employment, Interest and Money, wherein he defined “the “marginal efficiency of capital” as “the rate of discount which would make the present value of the series of annuities given by the returns expected from the capital asset during its life just equal its supply price.”. Keynes does not explore, in this passage, the consequences of this capitalism-immanent ‘continual technodepreciation’ of capital plant and equipment for the capitals-system as a whole.
However, I believe that we would be correct in supposing that he was aware of them. Indeed, per our hypothesis, this knowledge was what led to Keynes role in propagating the ‘Rocke-Nazi’-engineered ideology of Eugenics in the first place. Keynes was director of the, ‘Rocke-Nazi’, British Eugenics Society, 1937-1944, and a race-bigot, for example describing Einstein, after Einstein published his General Theory of Relativity, as “a naughty Jew-boy, covered in ink” [David Bodanis, E = MC2: A Biography of the World’s Most Famous Equation, Walker & Co., [NY: 2000], p. 217].
No doubt there are great benefits to the ‘Rocke-Nazis’, to the private owners of the “Federal” Reserve, in Keynes pro-state-capitalist prescriptions, calling for national government deficits that led to a vast “military-industrial complex” [Eisenhower], and to huge and continuing debt-service payments -- paid out of taxes on workers’ incomes, as a kind of new form of surplus-value, and apparently paid in perpetuity -- to the plutocratic -- especially to the ‘Rocke-Nazi’ -- banks, and other “investors”, who largely supply the loans, and buy the government bonds, to finance these ‘‘‘national debts’’’. Keynes was a de facto supporter of Hitler, like the rest of the ‘Rocke-Nazis’, while Hitler was still a Eugenics ‘servant-dictator’, serving the ‘Rocke-Nazis’, along with British Prime Minister Arthur Neville Chamberlain, also a member of the, ‘Rocke-Nazi’, British Eugenics Society, who, as revealed by a release of recently declassified materials by the British National Archives, in September 2011, attempted, in secret, to make a peace pact with Germany in 1938, and to help the Nazis with PR to achieve an image more palatable to ordinary Britons[http://www.dailymail.co.uk/news/article-2033502/Revealed-Chamberlains-secret-bid-reach-deal-Hitler.html]. Keynes even wrote, in his Preface to the German edition of his General Theory, that “in offering a theory... which departs in important respects from the orthodox tradition” [he might expect] “less resistance from German, than from English, readers” [because Keynes’s theory was] “much more easily adapted to the conditions of a totalitarian state” [http://www.jstor.org/discover/10.2307/4401913?uid=3739960&uid=2129&uid=2&uid=70&uid=4&uid=3739256&sid=21104213863643]. Keynes even met with Hjalmar Schacht -- who later became ‘Hitler’s Keynesian’; Hitler’s President of the Reichsbank and Nazi Minister of Economics, implementing Keynesian policies in Nazi Germany -- on Keynes’s way back from an advisory trip to totalitarian Russia. Keynes -- and Chamberlain -- only withdrew their support from the Hitler Eugenics regime once Hitler ceased to serve the ‘Rocke-Nazis’, turning from ‘servant-dictator’ to ‘Franken-dictator’, signaling his intension to take over the world, wresting control away from the ‘Rocke-Nazis’, by, e.g., signing the “Molotov–Ribbentrop Pact -- officially named the “Treaty of Non-Aggression Between Germany and the Union of Soviet Socialist Republics”, on 23 August 1939. For more about these hypotheses, see --
2.: “The point under discussion is met with in the case of privately-owned undertakings when a technical discovery affords the opportunity for installing a new equipment or capital improvement which is technically superior to an equipment which is already being employed.”
“The equipment being employed, that is to say, may be rendered obsolescent and this may occur before the equipment has earned sufficient revenue to cover its past cost.”
“The question then arises whether the prices of the output of the equipment should be such as will bring in sufficient revenue to cover the prospective costs of producing that output or whether the revenue aimed at should cover, in addition, the uncovered part of the original cost of the old equipment.”
“As is clear from our discussion of costs and prices it is the first alternative which is economically advantageous to the community; in other words, the “undepreciated” part of the old equipment, as it may be called in conventional accountancy language, should be written off.”
“A firm operating in conditions of competition may have little choice but to adopt this policy because of the likelihood that other, competing firms which have taken advantage of the technical improvement will undersell.”
“But if the firm possesses a high degree of monopoly it can, if it is so disposed, try to recoup the loss on the old equipment out of the revenue earned by the new, in which case the benefit conferred by the technical superiority of the new equipment is not being passed on to the community.”
[ A. M. Milne and J. C. Laight, The Economics of Inland Transport, Sir Isaac Pitman & Sons [London: 1965], p. 232n, emphases added by M.D.]
M.D.: When the rate of costs-of-production-reducing technological innovation in fixed capital plant and equipment accelerates beyond a certain degree, in an acceleration which is an immanent, “lawful” feature of the competitive capitals-system, and in the context of the, also immanently, “lawfully” tendential, growing preponderance of fixed capital plant and equipment in the composition of, especially, the most centralized, most consolidated, most concentrated, most advanced industrial enterprises, owned or controlled by the plutocratic core of the capitalist ruling class, the above-prescribed write-offs of technodepreciated, incompletely-amortized fixed capital plant and equipment, tendentially rising in value and in frequency, accounting period after accounting period, netting-out against, and dragging down, profits, during those accounting periods, threaten to destroy the profitability of industrial capital, and to dethrone the reigning core of the capitalist ruling class. The response of that core ruling class to this threat? -- Eugenics, The 1913 Federal Reserve Act, The 1913 Federal Income Tax, the 1914+ First World War, the 1930s Great Depression, State-Capitalist Totalitarianism [e.g., both Fascism and Stalinist pseudo-socialism], and [1939+] Second World War, the “Military-Industrial Complex”, the ~1900+ suppression of industrialization in the Eastern European, Asian, South American, and African peripheries of the core countries of industrial capitalism [i.e., in the UK, Western Europe, and the US] -- the ~1900+ creation/imposition of the “Third World” -- the engineering and funding of ‘neo-Eugenic’, “People Are Pollution”, Pro-Genocide, ‘PRO-HUMANOCIDE’ ideologies, the “Great Recession” . . . Milne and Laight are quite right, in the quote above, to state that ruling class resistance to “writing off” the increasingly-recurring ‘technodepreciation’ of their industrial fixed capital plant and equipment means that “the benefit conferred by the technical superiority of the new equipment is not being passed on to the community”. However, that ‘economic-ethical’ argument is of no value in convincing that ruling class to change its ways. Not passing the benefits of the growth of the social forces of production on to the larger community is the very core of the modus operandi of that core ruling class, from its very birth as such, by its perpetration the vile social violence of “original accumulation” itself.
3.: “We should perhaps at this point note that a firm whose capital is obtained mainly or wholly on a loan basis is in a much more vulnerable position financially than a firm which is financed largely or wholly by risk-capital.”
“Suppose a firm has purchased out of finance provided on a risk basis an equipment costing £10,000 and that, in the event, it is found that the results of the investment have fallen short of expectation.
“The response of the public to the output produced with the aid of the equipment may have proved disappointing.”
“Suppose that, taking this lower response into account, the firm estimates that an equipment of lower capacity costing £8,000 would have been a better proposition and that, when the original resource wears out, it should be replaced by this lower-capacity resource.”
“But on the original investment a loss will have been sustained, and this will fall to be borne by the providers of the risk-capital.”
“But, retaining the same illustration, now suppose that the finance were provided on a loan basis.”
“The loss will be the same but the loan out of which the original equipment was purchased will remain to the full amount a liability of the firm and the [M.D.: principal and] interest payments [M.D.: the “debt-service” payments] as fixed in the loan contract will still have to be met.”
“These interest payments, arising as they do from a past investment, while not representing costs in the economic sense, will be of the nature of financial charges which, if not met, may lead to the firm being received into bankruptcy.”
“It is evident that given the differing characteristics of loan- and risk- capital a firm financed by loan capital will be financially the more vulnerable in a situation where expectations fail to be fulfilled.”
[A. M. Milne and J. C. Laight, The Economics of Inland Transport, Sir Isaac Pitman & Sons [London: 1965], pp. 191-192, emphases added by M.D.].
M.D.: Not only does its acceptance of, e.g., ‘Rocke-Nazi’ bank loans -- loans from J. P. Morgan Chase, Citibank, Bank of America, etc. -- in place of “risk-capital”, e.g., the proceeds of capital equity stock sales, via IPOs, etc, place an enterprise in greater danger of failure and loss of ownership, e.g., when ‘technodepreciation strikes’ [the example of the quote above is of lack of expected demand for commodity output, not of pre-amortization ‘technodepreciation’ of the producing equipment, but the two cases are parallel]. Fixed capital plant and equipment purchased with the proceeds of loans may, if ‘technodepreciated’ prior to amortization, be scrapped and replaced with the new, state-of-the-art, competitive plant and equipment, but the debt service on the scrapped equipment still has to be paid, as well as the debt-service on the new plant and equipment, if it too was, once again, purchased via bank loans. Moreover, the ‘Rocke-Nazi’ banks can offer loans on seemingly favorable terms, and then orchestrate “capital asset bubbles” [e.g., currencies relative valuation "bubbles"] -- through the method of “Capital Asset Bubble Engineering”, that was advanced by also-early-Hitler-supporter Joe Kennedy, when his Kennedy family was still in good standing with the Rockefellers as one of their lower plutocracy servant-families, like the Bush family of Hitler-financier Prescott Bush -- “bubbles” that result in the expropriation, by bankruptcy, of the original owners of these enterprises, and in the ‘Rocke-Nazi’ “carpetbaggers” acquiring ownership of the thus-made-vulnerable, and, in effect, assassinated, firms, for the proverbial “pennies on the dollar”. For more about this hypothesis, see --