| This question <13|13> overall <14|16> Hans: <12|16>. |
| Exam Question 6: What is a commodity? Marx does not give the definition of a commodity but an analysis. How would you define the thing he analyzes? (The answer can be given in one sentence.) |
| [15] Hans: The wisdom behind the definition of a commodity. Marx's definition of “commodity” is very broad. He does not care whether the thing is a finished consumer good or a raw material or an investment good, if they are produced for sale they fall under his definition of “commodity.” Marx uses such a broad definition because a capitalist firm does not care either whether they produce one or the other, as long as can make money from it. |
| Toby said in [13] that he would have preferred a narrower definition of “commodity”. I agree in the following sense: it would be a better economic system if the production of finished consumer goods were organized according to different principles than that of investment goods. In my vision of a socialist society, consumer goods should be distributed in a market-like fashion. But the merchants who sell those consumer goods should not be able to use the money received from selling consumer goods in order to buy investment goods. Instead, this money should be used as an indicator of the popularity of the different goods which informs a planned production system. Here are three reasons why: |
| (1) The decision how to invest, i.e., which production facilities to expand etc., is the most important economic decision. It should not be made behind the closed doors of corporate boardrooms, but there should be democratic input in this. |
| (2) Investment should also not be governed by market incentives but should be planned. In the present system, investment is high when demand is high, which puts an even larger strain on supply. In a rational system, investment should be high exactly during those times when demand for consumer goods is low relative to the productive resources. |
| (3) Only a scientically planned investment process will be able to make production decisions which are mindful of the ecological constraints of our planet. Markets are too dumb for this. |
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