Absolutely. As a result, the accuracy of measures of profit is questionable.
On Wed, Jun 14, 2006 at 07:05:37AM -0700, Sandwichman wrote: > Regarding depreciation, it needs to be remembered that it is a > convention, not a measured physical reality. So if depreciation is 6% > for a number of years and then moves up to 8% it is not because things > suddenly started wearing out or becoming obsolete sooner. It is > because the accounting convention changed. That change may reflect > factors that have developed over a longer period of time or they might > ignore factors that should be taken into consideration today. To tie > depreciation back into the subject line about unproductive labor, it > seems to me that rates of depreciation relate to the notion of > fictitious capital to the extent that the conventional notation may > understate the rate at which capital equipment may be losing value. > > -- > Sandwichman -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail michael at ecst.csuchico.edu
