File spoon-archives/marxism-international.archive/marxism-international_1997/marxism-international.9710, message 274

Date: Tue, 14 Oct 1997 13:59:16 +0200
Subject: M-I: Re: Concept of Value

>On Wed, 15 Oct 1997, ricardo wrote:
>> Sid,
>>  it would help of you stopped equating exchange-value with price. Hugh is
>> right about this too. If unrealised value did not devalue then capitalism
>> would not be an historically transitory mode, but rather a terminal mode
>> which simply requires a ricardian nationalisation of butter mountains as
>> back wages. That of course would make capitalism a permanent fixture and
>> reduce our programme to that of peoples' capitalism. Something which Marx
>> would not even contemplate.
>> Dave.

and Siddarth C replied:

>Exchange value is the "form" that value takes during exchange.

Not quite. Exchange value is the aspect of value to which price relates
during exchange, and approximates closely to the price in capitals of
average composition. In normal circumstances, with consummation of the
exchange by purchase in the normal way (ie no emergency firesale or
cheating involved -- this is the same simplification Marx uses in most of
Capital where he's not specifically dealing with emergencies) the exchange
value will determine very strongly the point around which the price will
oscillate if average capital composition is involved.

>This form can be called price (in labor time units) or whatever.

Nope and nope.

1) This form is value (exchange value), *not* price. It has an indirect
relation to price.

2) Price is *never ever* the same as labour time units. Some of Marx's most
biting polemics were directed against this idea in the shape of
Proudhonism, very early in his career.

Price is in the form of MONEY. Money is a fetishized (therefore
unconscious) and socially mediated form of value that emerges parallel to
value itself (socially necessary labour time) in societies with commodity
production.  Some suitable commodity is "crystallized out" as a universal
medium of exchange (ultimately gold and the various surrealistic attempts
we see today to substitute material money with socially and politically
decreed alternatives). It is absolutely essential to distinguish these

Marx devoted enormous effort to the analysis of money clearing the way for
his analysis of first capital in general (the behaviour of value in
capitalism, Book I) and then capital as particular capitals in competition
(the behaviour of value when it is mediated by competition and the
equalization of profit etc into price, profit, interest and other
fetishized forms of existence, Book III). You can find the most important
results of his studies of money in the Grundrisse,  1857-1858, and in the
Contribution to the Critique of Political Economy, 1859. It's possible to
follow the arguments in Capital without the earlier books, but inadvisable.

(Here a brief clarification in passing about what I wrote too quickly last
night that value is part and parcel of the capitalist mode of production.
Of course it emerges in other modes of production within which commodity
production occurs. What happens in capitalism is that it becomes
universalized as the principle means of satisfying social needs and the
commodity and its two-headed value form becomes the central feature of all
social interaction.)

>And it is
>true that the value of a commodity can be *only* manifested via its
>value-form (exchange-value) in the market.

The form we see in the market is the fetishized, mediated form of *price*,
expressed in *money*.  Value is not directly manifested in the market.

>Yet, it is independent of
>the exchange process. It is the average labor-time (socially necessary)
>that *was* spent to make the object, nothing else.

No. The socially *necessary* labour time is transformed from a potential
speculation into a reality by the fact of exchange, by purchase, by the
consummation of the circuit M (money) - C (commodity) - M' (more money). If
the commodity is sold at a price that doesn't reflect the capitalist's
calculations of cost, then there is a discrepancy between the capitalist's
idea of what is socially necessary and society's (the market's) idea of
this. So it's not merely *not independent* of the exchange process, but it
*doesn't exist* without it. "Potential" value does, as a speculation, and
so does concrete labour time put into the production of the commodity, but
the confirmation of this labour as socially necessary labour comes with the

>The value of a
>commodity is the bedrock or center of gravity around which its exchange-
>value fluctuates. If we fail to clearly and unambiguously understand these
>basics, all is in vain.

Let's be generous and assume that value here means the socially necessary
labour time expended in production. In this case, this is true within the
limits of Book I, capital in general, where Marx is dealing with
production, exchange-value and circulation as such, in the abstract, and
sets aside the mediated forms that must be dealt with in real capitalist
economic relations for later consideration, in Books II and III.

If we choose not to be generous, we can see that it would be a strange
exchange-value that didn't equate with the value of which it is an
inseparable aspect. I'd reformulate this statement as follows: "the
exchange-value of a commodity is the centre of gravity around which its
price fluctuates, if it is produced by a capital of average composition".

>Here is Marx himself:
>"It becomes plain, that it is not the exchange of commodities which
>regulates the magnitude of their value; but on the contrary, that it is
>the magnitude of their value which controls their exchange proportions."

Naturally, if, as Marx assumes in Book I, the process of production and
consumption runs smoothly in a normal, average way. Profit is not generated
by the process of selling, but by the socially necessary labour imparted to
a commodity being realized in a sale and exceeding the cost to the
capitalist of the raw materials, machinery etc involved in the production
(fixed capital), and the labour-power involved (variable capital).

>Nothing could be clearer,

... *if* you understand the constraints to the argument in Book I, and
their place in the plan of the whole of Capital, and don't confuse value
and price.

>and yet this simple point has aroused so
>much confusion, dispute and debate among the academics.

Perhaps it's simple but not easy. Also the confusion has not been limited
to academics. Stalin was no academic, but the leader of the largest and
most influential party of the world working class for many years, and he
didn't understand bugger-all of what Marx or Lenin were going on about.

>And Hugh is making the same mistake (unless I have misinterpreted him badly).

Well, I'm trying to clarify my position here.

>For any specific commodity (say, a pair of boots), the relation between
>its value and exchange value is one-way, i.e.,
>		value of commodity ---> exchange value of commodity

It's not just one-way, it's identical.

The relationship between exchange-value and price is less clear-cut. If, as
I wrote above, things run smoothly and goods are produced and consumed more
or less as intended by the producers and consumers, then on average
exchange-value will determine price. But if things don't go smoothly, then,
as I wrote above, the price will reveal the discrepancy between the
seller's speculation about the value of the goods and the market's crass
judgement on it and thereby the social necessity of the labour contained in

>You say that Hugh is right that "if unrealised value did not devalue
>then capitalism would not be a historically transitory mode, ...."

I'd like to see Sid's comment on the historical implications of Dave's
remark. I mean, what will happen to value under socialism, in Sid's view?

>So say, there is a sudden crash and boots suddenly "devalue"(their price
>drops to a fraction  of what prevailed prior to the crash). Are you
>then meaning by the word "devalue" that their "value" disappears? If so,
>where does it vanish to?

If there is no sale at all, then the *potential* value that the seller
thought he had is shown to have been purely imaginary. The labour involved
is proved to be socially unnecessary, so there was in fact never any value
in the commodity. And that's it. Too bad, so sad ...

>Or is it actually that their "exchange value"
>drops suddenly far below their center of gravity (i.e., their "value").

If there is a sale of some kind, an emergency cheapo deal, say, then the
labour involved is shown to have been of far less value than the capitalist
speculated. In other words, far less socially necessary than the capitalist
thought (in her mediated fetishistic way of course). The exchange-value
doesn't drop below its centre of gravity, but its centre of gravity is
revealed as being somewhere else than it was in the head of its owner.

And here we have the relationship between the Proudhonist equation of
labour-time with value with price and bourgeois economics. It's all in the
head. The psychological axioms of vulgar economics, in this case the
reality of the capitalist's notion of the value of a commodity, replace the
actual material relations of real economic processes.

It's not what's in the head of the actors, but what's happening in the
material metabolism of society that counts. And in capitalism it all comes
out post festum, after the party. That's what's so frustrating about it and
makes it impossible to plan properly however much the multinationals would
like to and try to do so.

And this accounts for the constant atmosphere of crisis and insecurity
under capitalism. They just don't know what's happening or what's going to
happen until it's already taken place and it's too late.



     --- from list ---


Driftline Main Page


Display software: ArchTracker © Malgosia Askanas, 2000-2005