Rakesh writes:
>Michael, if investments are concentrated in the most highly transient forms
>of fixed capital, viz. info technology, then this quicker turnover of fixed
>capital in itself should depress the profit rate (and why have investments
>been concentrated there?) Of course a more advanced telecommunications
>structure may shorten circulation time and allow just in time ordering that
>prevents the lock up of value in inventories. It seems to me that no one
>has yet studied the opposite effects of quicker turnover of fixed and
>circulating capital on the profit rate. The computer revolution depresses
>the profit rate by speeding up the depreciation of information technology
>(Blecker has argued that the shortage of savings is traceable to the quick
>turnover of computers?) while improving profitability on the other hand by
>decreasing circulation time and freeing capital from its idle
>materialisation in inventories. At any rate, the computer revolution does
>not have a clear cut beneficial effect on the profit rate.
Yeah, terrific stuff, Rakesh! And it might also be worth throwing in the extreme assymetry of those beneficial effects. In both hardware and software, it seems to me we are seeing huge benefits with suppliers (geographically and corporately highly concentrated) and all the confusion with the demanders. I'm going back to two-year-old literature here (does Brigitte Preissl ring a bell?), but have yet to see it refuted - or any evidence of the situation having changed.
This might be what's being reflected in the very distorted NASDAQ (a dozen dramatic successes on top and a thousand quiet tragedies beneath) and might also be contributing, to a still increasing extent, to global uneven development in general and the recent local pressures to privatise communications infrastructure in particular (governments dissolving before the anticipated costs of apparently necessary new exchange and terminal technologies with predictably rapid depreciation characteristics).
Keep this stuff coming!
All the best, Rob.