| This question <98|182> overall <104|107> Hans: <92|109>. |
| Question 223: Describe the joint work of all commodities which is necessary to appropriately express the value of one commodity. |
| [105] Hans: Value and Use-Value must be distinguished. Charles's answer [85] describes how the use-value of a complex product (coat, house, car) depends on the use-values of its components. This is not only true for commodities but for all complex products, and it is not what Marx means. When Marx says “value” he means the congealed abstract labor inside the commodities, which makes them exchangeable. |
| Gregory [98] is better because it does stay on the value-side of commodities, instead of discussing their use-values. Gregory sees correctly that the “joint work of all commodities” is the willingness to accept one and the same commodity as the general equivalent. But there are still some differences between what Marx says and what Gregory says: |
| (a) Gregory says that that which makes commodities exchangeable, its “value,” is “determined individually by its process of labor and value of use to the consumer.” There are two mistakes in this. (i) In Marx's theory, the value is determined only by labor content, not by the use-value. Use-value and demand determine how much of the commodity will be produced, but not the price. Here Marx differs from mainstream economics. (ii) Although this seems to be an individual determination (all one needs to determine the value of a commodity is a stopwatch), the case of the lazy or unskillful laborer shows that this is really a social determination: the relevant labor time is not the actual labor time used to produce that specific commodity, but the socially necessary labor-time for this kind of commodities. |
| (b) Gregory says that this general equivalent is money which has no intrinsic value, while Marx was thinking about gold money, i.e., one commodity (gold) selected to serve as money. |
| (c) Gregory says that money is necessary so that the commodities can be exchanged. Again, this is a part of mainstream theory where Marx's theory differs, as Ricky explained in [94]. Marx thinks that the primary function of money is to serve as a carrier of information for the producers. When Marx uses the words “express the value of the commodities” he means: how do the private producers get the information necessary so that they know whether they should use their labor and material resources for product A or product B? Observing the many barter relations, between linen and coat, or coffee and tea, will not help here. For this they need the monetary prices of the goods and compare these with their own costs, either monetary costs for the purchased inputs, or their own labor inputs. |
| By the way, such theoretical differences can have important policy implications. If the most important function of money is informational, then it is very important that the dollar is not devalued if it wants to remain the world currency. OPEC countries will not continue to price their oil in dollars if the dollar continuously loses value. If you look at money mainly as a means of circulation, the inflation of the dollar will not matter. |
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