The tendency of earnings estimates to fall

christian11 at mindspring.com christian11 at mindspring.com
Fri Apr 6 10:57:37 PDT 2001


CB: Why ? The "swift devaluation" doesn't mean the capitalist , who has the innovative instruments of production and has already spent the money on it , gets the money back.

Not all of it, but faster depreciation reduces taxable income and thus increases cash flow. It transfers surplus from the public sector back to the private and reduces the nominal cost of investments.

I was also referring to the way that the value--of computers especially--has been measured. If I remember correctly, the productivity revo is in part based on looking at computers' chip speed as representative of their productivity--i.e. a 600 Mhz machine this year is only 2/3rds as productive as a 900Mhz one next. But the real productivity difference is marginal. So you have a machine that is going to be considered scrap very quickly, but still working relatively well.

Christian



More information about the lbo-talk mailing list