CH. 6 APPENDIX ON USER COSTS 73

idle plant happens to be heavy, and of those disequilibria whichare characterised by very rapid obsolescence or great redundancy,especially if it is coupled with a large proportion of compara-tively new plant.

In the case of raw materials the necessity of allowing for usercost is obvious;—if a ton of copper is used up to-day it cannot beused to-morrow, and the value which the copper would have forthe purposes of to-morrow must clearly be reckoned as a partof the marginal cost. But the fact has been overlooked thatcopper is only an extreme case of what occurs whenever capitalequipment is used to produce.‘The assumption that there is asharp division between raw materials where we must allow forthe disinvestment due to using them and fixed capital where wecan safely neglect it does not correspond to the facts;—especi-ally in normal conditions where equipment is falling due forreplacement every year and the use of equipment brings nearerthe date at which replacement is necessary.

It is an advantage of the concepts of user cost and supple-mentary cost that they are as applicable to working and liquidcapital as to fixed capital. The essential difference between rawmaterials and fixed capital lies not in their liability to user andsupplementary costs, but in the fact that the return to liquidcapital consists of a single term; whereas in the case of fixedcapital, which is durable and used up gradually, the returnconsists of a series of user costs and profits earned in successiveperiods.