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Do they really know their exact profits? Depreciation is part of the profit calculation. It is generally a fairly arbitrary measure, based on accounting principles.
>
> Jonathan Nitzan wrote:
>
>> That is not what I'm saying.
>>
>> We both agree that General Motors -- and every other firm for that
>> matter -- know their profits to the cent. We agree that they know
>> full well what they pay to their workers. And we agree that both of
>> these are pecuniary magnitudes that could be computed as a markup
>> ratio. Where we probably disagree is on how this ratio relates to
>> exploitation. In my view, this ratio has nothing to do with the
>> unknowble rate of exploitation, which is based on unknowble
>> "productive contributions" measured in unknowable abstract labor.
>
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I knew I'm getting into trouble with those short answers.... But, yes, I
think capitalists do know their exact profit. Let me explain my point
and forgive my many inverted commas.
Depreciation refers to a reduction in the "quantity of capital"; that is, to a reduction in its "productive capacity" due to wear and tear. As such, depreciation is a "material" magnitude. It has to be counted in the same unit of the "capital equipment" itself -- that is, either in utils or in abstract labor. But, then, if we agree (do we?) that capital equipment has no definite material magnitude, we have to also agree that depreciation cannot be measured in "objective" material terms.
Depreciation, measured in $, indeed is an "arbitrary measure." It is arbitrary in the sense of having no underlying "true" value. But the same can be said for the $ price of a commodity. This price, too, is arbitrary. It does not reflect any underlying "labor value" or underlying "utility" (which are both unknowable if not logically impossible).
And this is only the beginning. The story gets more and more "arbitrary" as we bring in "transfer prices," "goodwill," "obsolescence," "future projections," "risk allowances" and what not.
All of these magnitudes, we argue, reflect the ongoing dynamics of power in society. These dynamics, in turn, feed into a set of conventions that are themselves the reflection of a long power struggle. The arbitrary nature of these numbers does not detract from their objectivity. Once accepted (not withstanding “fraud” that circumvent this “acceptance”), they become the central force that directs capitalist society.
So I think we have a choice to make. Either we continue to look for the Holly Grail counted in utils or abstract labor, and in the interim conclude that capitalists do not know their “true” profit. Or, we can accept that the numerical architecture of capitalism is created by the social nomos, and then conclude that capitalists certainly know their profits as stipulated by the conventions of that nomos.
Jonathan Nitzan