design of the city is to facilitate the motion. highways, etc communication infra
CH on Fixed Capital very important.
economic dynamics and production of urbanization
Fixed Capital – transformation of nature.
Physical :
machinery
factories
physical infrastructure
these are called fixed capital
Auxiliary materials like energy
physical inputs like raw material
labour power
these are called circulating capital.
Means of labour. = fixed capital + Auxiliary materials
Object of labout = physical inputs [10:00]
Labour power —> subjective element
Vol 1 . constant capital and variable capital. This will give surplus value.
in Vol 2 above section he is looking the motion of capital. surplus value is not visible there. these category conceals theory of surplus value.
Adam smith and Ricardo got fascinated with the fixed and circulating capital. so they could not see the theory of surplus value.
for them capital is a thing. its a stock of asset. put it motion by labour.
marx – value and motion
marx thinking circulation. but they are thinking stocks
fix capital does not act like a stock for certain period of time.
in use value it is a stock.
manhattan buildings, capital moving through them.
tension – between fixity and motion. stock and flow. [20:00]
fixity does not provide motion.
landscape of capital in the age of railroads a fixed structure around capital is moving. railroads become less and less adequate with other faster ways of transportation. landscape of capital is adequate for the capital at that moment. but not for later time as it expands/accumulate. creative destruction of the land. you have to destroy the landscape to build new. the deindustrialization of america in 1980/1990s are classic examples. destruction of particular landscape
he uses the word peculiar/ peculiarity here.
fixed capital need not to be fixed in space. some of it is fixed, some are mobile, eg ship. [30:00]
if you have fixed capital in the land circulating capital has to go there and validate it. if there is no circulating capital goes there then the fixed capital is useless.
the fixity is the airport, the motion is the airplane
circulating party has to dictate the fixed price.
fixed capital is used in production.
consumer also needs something fixed. knifes and forks are fixed capital. house. these fixed capital in consumption front.
cattle are fixed capital. when they got killed, become circulating raw material [40:00]
“Stages of Economic growth – a non communist manifesto approach”. in order to face communist threat you need to have a development strategy that bring high grade consumerism to all part of the world where communist not yet went. communist ideas – spread wealth around, good health care etc.
How you get a low income community out of poverty to a point of high consumerism.
step by step move. 1. pre capitalistic condition, 2 create a pre condition for growth. fix capital formation. lot of infrastructure. 3. take off of economic growth. low salary to high salary. consumption.
In Briton this was not there. actually it was the first place where capitalism grown. How Briton took off without fixed capital formation? for this take off consumption should be restrained.
Marx said in order to build the infrastructure you need surplus population and you need surplus production.
Merchantalism in briton. merchant capital. briton organized large infrastructures largely for consumption. for that they robbed the world. colonies.
1970s all textile mills are closed down. those fixed capital disappeared. same time new form of production is opening up in sweat shops of Los Angeles. there fixed capital is somebodies basements.
17th and 18th century briton where merchants had a putting out system. they go to presents gives cloths and turn it into x,y,z. collect it later. Peasant ‘s hut is the fixed capital.
Micro financing now is the same.
the fixed capital become devalued comes in consumption front/fund. 2 way move. stuff at fixed capital becomes consumption fund and stuff in the consumption fund becomes fixed capital.
fixed capital is that part of the constant capital that is left over after one turn over time. turn over time are very different. [50:00]
if short turnover time then you get lot of fixed capital. for longer turn over time less fixed capital.
problem of disposing surpluses. one way is invest in fixed capital. one reason urbanization connects to capital accumulation.
there was no economic history subject in 16th – 19th century. so Marx used classical economists as raw material. and used his critical analysis on them.
Adam smith said the free market system will work for all. Distopian not utopian. [1:00:00]
Class relation is becoming evident?
Marx talked about fetishism. Masking effect. underlying social realities get concealed from us by the market processes. in some level all believe in market individualism. things are bad for must be our fault. so people dont see the class relation.
moral depreciation
Marx’s value theory. wrong?
A Locomotive 25% depreciation in 10 years. but the there is no depreciation in use value. [1:09:00]
machine 10k last for 10 years.
1k per year return. at the end of 10th year go to market and buy replacement machine.
replacement cost need not be the same.
1. what is the cost of machine. is its replacement cost or depreciation cost by use?
machine helps the capitalist relative surplus value.
vol 1. machine cannot be the source of value. they are source of relative surplus value.
effectiveness of the machine cannot be judged outside of its capacity to help one to produce relative surplus value relative to other Capitalists.
after 5 years a new machine with 5k.
what is the cost of the old machine? I may get only 500 bec all others may moved to new machine.
So Marx says, this drives the capitalists to use the machine as fast as they can to avoid moral depreciation.
Machine may last only 5 years
Instead of employing 12 hrs a day, employ 24 hrs a day. so can get back the 10k faster.
which leads the capitalist to do shift work, night work. this in Vol 1.
How to figure out value.
at the end of turnover time capitalist produced 2 things, 1. commodity. 2 a slightly depreciating machine.
So calculate the machine’s value.
joint product.
3 ways to value the machine.
1. straight like depreciation. thats fantasy.
revaluation
if you have use value then only value exists.
so end of the production cycle ask what is the use value of the machine. [1:20:00]
effective
value of fixed capital is a problem. marx did not solved it. couple of places he comes close to joint product.
how to value a capital asset
asset valuation
mark to market, if no market? 0
lease for one turnover period
“Value acquires a dual existence.” a part natural another is the form of money. [1:30:00]
it depends upon its usefulness. its capacity to gain surplus value.
borrow money and then build the bridge
monopoly rent. – software
huge amount of money going to the consumption front/fund.
housing market.
secondary form of exploitation.
commodity capital – [1:40:00]
vol 2 is explosive from bits.
greater gradual absorption of capital
urbanization etc where the surplus capital is getting absorbed.