Rational waste

[Young Master Smeet]

A simple example of how effective demand, and the calculation of exchange value can lead to the destruction of useful wealth.

http://www.newstatesman.com/business/2014/06/bizarre-secret-london-s-buried-diggers

Quote:

Initially, the developers would often use a large crane to scoop up the digger, which was by now nestled almost out of sight at the bottom of a deep hole. Then they began to calculate the cost-benefit equation of this procedure. First, a crane would have to be hired; second, the entire street would need to be closed for a day while the crane was manoeuvred into place. Both of these stages were very expensive, not to mention unpopular among the distinguished local residents.

A new solution emerged: simply bury the digger in its own hole. Given the exceptional profits of London property development, why bother with the expense and hassle of retrieving a used digger – worth only £5,000 or £6,000 – from the back of a house that would soon be sold for several million? The time and money expended on rescuing a digger were better spent moving on to the next big deal.

Per the Piketty discussion, the excess profits from residential development can only come from the surplus value of productive capital (which in turn is being detroyed by burying it)…

[Author]

Posts