| This question <14|14> overall <8|11> Polo: <1197|246>. graded A– |
| Question 73: Marx argues that commodities are exchangeable only because they contain some common substance. Bailey denies this. He compares the exchange-value of commodities with the distance between points, which is not based on a commonality between the two points but is purely relative: “As we cannot speak of the distance of any object without implying some other object between which and the former this relation exists, so we cannot speak of the value of a commodity but in reference to another commodity compared with it. A thing cannot be valuable in itself without reference to another thing any more than a thing can be distant in itself without reference to another thing.” Comment. |
| [10] Polo: The question one should be asking is, what common substance is Marx referring to? When one looks into a commodity's value, such as a television, they see how much each individual part was worth, the electricity costs, etc. and then decide based on that how much to sell it for and therefore how valuable it is. |
| Hans: Here you are trying to determine value by cost. This is not the same as Marx's labor theory of value. Indeed it cannot serve as a value theory, because it has two problems: |
| (1) It is circular. It determines the value of one thing by the value of another thing. It can therefore not be used as a principle to determine the value of everything. |
| (2) It is inconsistent with production and growth. In a technology which allows the economy to grow, i.e., which has more outputs than inputs, the price system cannot be such that the input prices exhaust the output prices. I.e., market prices must be larger than costs. For more details look at [2007fa:49]. |
| But in the next sentence you switch from determining value by cost to determining value by utility. You say that different things cannot be compared based on their utility: |
| [10] Polo: But unfortunately, every commodity is unique unto itself. While all televisions of the same type will be of the same value, how can one say that a car is more valuable than a television? They do not have the same parts, they do not have the same functions. |
| Hans: Next you are introducing labor-based value as some normative principle how things can be put on the same denominator. |
| [10] Polo: So to find out which is more valuable, it is necessary to break down everything that is used to create these commodities into one commonality. That commonality is labor. Everything starts with labor. Individual parts are produced with labor. Machines, which produce electricity, were made by labor. And labor was used to put all the parts together to form the final product. Since we have now reduced a commodity's value to its labor alone, it is now possible to show the exchangeability between commodities based on the common substance of labor and one does not need to rely on the relative value of that commodity. |
| Hans: Apparently here you mean that one does not need to rely on relative *use-value* or utility. |
| Raynold: I would have to agree on the fact that labor is the starting point of all commodities. In order to find out a commodity's value you would have to analyze how much labor is required to produce each commodity. For example, the technology used to make a plasma screen tv is more advanced than the technology used to make your basic television. Therefore the value of the plasma screen is higher because of the extra labor and advanced parts used to produce it. But then again they are both tv's that have different values but the same use so they can be compared. |
| Hans: Raynold, you are trying to reconcile the labor theory of value with the utility theory of value. You basically say that the labor content gives a good inner measure of the utility of a thing. This is not the case. Audio cassettes are not only more expensive to produce (contain more overall labor), but they also have lower sound quality than audio CDs. And diamonds have a higher labor content but are less useful for human life than water. I hope these examples show that a value theory based on labor content is a different animal than a value theory based on utility. It is a theoretical error to think that they can be reconciled. |
| Your next example is not based on a theoretical error, but you point out a real problem with value based on labor: |
| Raynold: Even in today's commodity society, not all labor creates value. For example, a mom can put all of her time and energy (in other words labor) in raising a family, however you cannot put a price value on how well she raised them. This labor power is not socially recognized. You cannot compare the labor put into raising a family to the labor required to produce a tv. |
| Hans: A Marxist would say this is a critique of any economy which organizes its production around the market. An economy which values labor by its tangible and sellable product cannot capture all necessary labor in society, because there are many kinds of socially necessary and useful labor which do not result in a sellable product. The labor of raising children is one of them. |
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