Rethinking Reproduction Schemes
This article aims to develop reproduction schemes in two ways: It introduces the “depreciation” (wear and tear) of fixed means of production explicitly into the schemes. A separation of fixed means of production from its depreciation provides a clearer vision for the general nature of capital accumulation in a capitalist economy. It also argues that disaggregating the means of production into fixed means of production (capital equipment) and the circulating means of production (raw materials) is essential for the accuracy of the schemes. Our analysis shows that constant capital in department 2 (C2) must be larger than constant capital in department 1 (C1) in the simple reproduction scheme, and the difference between C1 and C2 must be equal to the circulating means of production.
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