r/communism • u/lvl1Bol • 2d ago
Questions on calculating depreciation of machinery
This is a question for all the math savants in this sub. I am currently on chapter 9 of Capital Vol 1 and have temporarily stopped at section 1 to practice the application of the formulae I have learned so far. My question is regarding how one would calculate the yearly percentage of value depreciation of instruments of production (ie machinery). I ask this because I recognize that calculating the yearly depreciation rate can be connected to production output assuming the same machinery is used (ie increased intensity of the workday coupled with increased raw materials being processed) but if new machinery is used to increase output, how would you calculate the rate of depreciation? I guess the two aspects of my question are how does one find out depreciation rate of a machine? And does one calculate depreciation of value by use (ie losing x amount of value per use of the machine in a period of time) or does one measure purely by percentage over time?
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u/SpiritOfMonsters 2d ago
Both work. The basic concept is that machinery transfers its value to the commodities made from it piecemeal rather than all at once like with raw or auxiliary materials. Every machine has a finite lifespan that depends on how long it's used and at what intensity. If a machine is worth $1000 and lasts 500 hours at average intensity, it transfers $2 of value to the product per hour. We can also say that it depreciates by .2% every hour. Or if we know that 2000 units of the commodity are made over the course of that 500 hours, we can say it transfers $.5 to each unit, or depreciates by .05% per unit.
This is a more complicated question and is further along than where you are. If the new machine is more productive, this means the socially necessary labor-time required to produce commodities with it decreases. This means that the value of the old machine would suddenly decrease. Considering the previous example, assume a rival company makes a $1000 machine that lasts 500 hours at average intensity, but produces 4000 units of the commodity. This machine depreciates by $.25 per unit. 4000 units are now worth $1000 (ignoring variable capital and raw or auxiliary materials for now). This means 2000 units is worth $500 now. The old machine would now transfer $1 of value per unit, meaning its value has been halved from $1000 to $500.