Re: Estimating the surplus\Doug's question\Fred's comments

[Mike Ballard <swillsqueal@xxxxxxxxxxxx>]

--- michael <michael@xxxxxxxxxxxxxxxxx> wrote:
>Invested capital requires some means of calculating
depreciation rates.  The government does
> this calculation by means of rules of thumb based on
> the permanent inventory method.
>
> Over a short period of time, problems with this
> method of calculation will not cause too much
difficulty as long as the business cycle does not move
too rapidly, but measurement over decades is
exceedingly questionable.

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What I've wondered about are the calculations
concerning the depreciation of fixed capital in these
times of rapid technological advance.  One never knows
what's around the corner in terms of the
revolutionizing of the means of production in this day
and age.  So, a capitalist might figure that so and so
much amount of fixed capital depreciates into so and
so many commodities over say five years and then the
piece of fixed capital is replaced.  But what happens
when the technological advance is so rapid that the
old calculation is off by years?

I guess that the capitalist just takes a financial
bath or goes out of business.

But maybe not?

Maybe BIG CAPITAL is not allowed to go out of business
(Chrysler?) because the overall effect on "the
economy" would be too great.

Is this another avenue where excess currency is being
pumped into "the economy"?

I think that I'm over posting today.  So, will stop
with this one.

Best to all,
Mike B)


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Where parents do too much for their children,
the children will not do much for themselves.

ELBERT HUBBARD (1856-1915)
The Note Book of Elbert Hubbard
ed., Elbert Hubbard II
p. 193

http://profiles.yahoo.com/swillsqueal

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