| This question <54|44> overall <63|65> ALeix: <1403|497>. |
| Question 104: 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? |
| [64] ALeix: The value of raw materials is determined by the amount of labor-time required to provide a certain raw material to an industry. The scarcities of raw materials are priced at a high value because of the amount of labor put into extracting the material. Marx gives the example of Brazilian diamond mines in relation to this. Diamonds have a high level of rareness and therefore require more labor-time. Because of this combination, diamonds have more value than other raw materials. Another example would be platinum metal. Although it has a higher use-value than diamonds, technically speaking for the use of catalysts inserted into catalytic converters, it still requires a large amount of labor-time to extract the precious metal in particular parts of the world. |
| I believe Marx's argument is not valid in the case of an exhaustible resource, which is present only in finite supply. The best example for this would be extracting oil. Production price to extract the oil would remain the same as the finite fossil fuel diminishes and the value of oil would increase as the supply would decrease. In regards to this statement, I had in mind of OPEC and the pricing wars for barrels of oil. |
| Hans: The point has been made, with justification, that water is more useful than diamonds. But if you compare diamonds and platinum, they are both used for different things, diamonds for drill-heads and platinum for catalytic converters, and I don't think one can say one is more useful than the other. |
| The problem with oil is that it is too cheap rather than too expensive. The economic valuation of a resource like oil cannot be reduced to the cost to get it out of the ground. This is a case where the limitations of the labor theory of value become most glaringly apparent. |
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