| This question <69|71> overall <69|71> Hans: <60|71>. |
| Question 63: Marx says that the exchange-relations are characterized by an abstraction from use-values. But use-values do affect the exchange proportions. If a use-value is in high demand compared to supply, then it commands a higher exchange-value. If a competitor brings out a better product, the firm's own product may not sell any more. Can this be reconciled with the claim of abstraction from use-value? |
| [70] Hans: Apples and oranges. Dange, you say in [69] that you are willing to trade 5 oranges for an apple. If people take you up on this you may lose a lot of money. By the way, how many apples do you have at home? I am asking because according to neoclassical economics you should be eating so many apples that you have gotten sick and tired of apples and any additional apple is not worth to you more than an orange (assuming that the market exchange proportion between apples and oranges is roughly one apple for an orange). |
| The labor theory of value (i.e., Marx's theory) does not have to make such assumptions because this theory determines exchange by labor content rather than consumer preferences. Assume apples and oranges contain the same amount of labor, but people are so crazy about apples that they are willing to pay five times more for an apple than for an orange. Then the supply will change; labor will be shifted from producing oranges to producing apples. The greater supply of apples will decrease their price, and the scarcity of oranges will increase theirs, until the prices are equal. In this theory, prices are determined on the production side, and consumer preferences only affect quantities produced, but not the long run prices. |
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