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| Question 90: How is the value of raw materials determined in Marx's theory? How does the scarcity of these materials influence their value? Is Marx's argument still valid in the case of an exhaustible resource, which is present only in finite supply? |
| [170] Ash: Raw materials, according to Marx, are determined by the labor used in extracting them. For example, wheat is a raw material for bread. Wheat is much easier to extract (or grow and harvest) than gold, therefore, wheat would not be as valuable as gold. |
| Marx takes scarcity into effect along the same reasoning. If it is more scarce then it must take more labor to obtain it, and therefore, has greater value. |
| Marx's theory on value does not seem to have merit in our economy today. Take the victims of hurricane Katrina. How much would one person pay for a bottle of water if they have not had it for two days? The labor invested in the water is the same, but the price would go up dramatically because of the scarcity of drinkable water in the region. This contradicts Marx's labor theory of value. |
| Some students have argued oil as support to Marx's theory. Yes, it is a non-replenishable commodity, unlike wheat. However, until it is to the point where we have near to none left, oil remains a poor example as even now we have enough to meet demand despite the gulf crisis. What we are experiencing is exploitation of the crisis and pure capitalist greed. |
| Hans: Prices converge towards, or rotate around, labor-values only in the long run, when demand and supply have had time to adjust. In a hurricane situation, there is excess demand for water, therefore prices will rise above labor content. |
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