Question 1 What did Marx mean with his formu - University of Utah

U of Utah Econ 5080 2007fa 23
other, they are also not shocked if the price of milk in one store is different than the price
of milk in a different store – although this diversity contradicts the idea that this is the price
“of” milk. To us, this diversity is a familiar every-day occurrence, but when East Germany
switched from a socialist system to a capitalist system, people used to call the radio station
saying: “I just was in two different stores and they sold milk at two different prices; isn’t
one of these stores doing something illegal?” Under socialist price controls, they were used
to getting milk everywhere at the same price. This seemed to be natural to them, because
after all it was the same milk, and they were shocked to see that now the same milk was sold
at different prices.
Marx’s theory offers here the following explanation: we are not shocked about this contradiction
because we understand that both contradictory aspects have some truth in them.
The exchange-value of milk is commonly associated with milk and not seen as something
purely relative, i.e., newly generated in the interaction between each buyer and seller, because
it is the exterior manifestation of the value of milk. This value is indeed closely
associated with milk, because it is the socially necessary labor-time to produce this milk.
On the other hand, the variability of prices of the same good is also accepted because the
sellers compete on the markets. I.e., the value is not set by a direct organization of producers,
but the producers produce independently and then let their goods fight with each other on
the market. Prices are the results of these competitive battles. This does not mean that they
are entirely “accidental,” the value still shines through as the regulatory principle since every
producer has similar production costs. In Marx’s terminology, prices are the exterior surface
manifestations of the intrinsic value, and this manifestation is indeed relative, because it is
the exchange relation between the two commodities.
Chased makes a distinction between the intrinsic quality and its exterior surface manifestation
when he writes: “alas, it is not a question of what the worth is, but of the exchangevalue.”
But in his answer, if I understand it right, the intrinsic thing is the use-value, while
the exchange-value comes from the market power of the suppliers who “control” the market.
Marx does not believe that use-value has an influence on the price; in the long run, use-value
only has an influence on the quantities supplied. Instead, the intrinsic basis for pricing is the
ultimate cost of the commodity to society, which is its labor input. This theoretical disagreement
has important implications: in Marx’s theory, value is produced in production by the
workers, while in the neoclassical theory, value is produced on the market by the consumers.
Message [155] referenced by [2010fa:24]. Next Message by Hans is [157].
Question 63 is 64 in 2008SP, 64 in 2008fa, 66 in 2009fa, 67 in 2010fa, 61 in 2012fa, and
67 in Answer:
Question 63 The French economist Le Trosne wrote that the value of a thing consists in
its exchange-proportions with other things. Does Marx agree with this, or how would he
re-formulate this proposition to make it correct?
[131] Daru: Le Trosne doesn’t know the difference. Le Trosne’s statment can be broken
in two parts. He first mentions the “value of a thing” (and by ‘thing’ we here assume that
he means a ‘commodity’) and then defines it relative to the exchange proportions with other
commodities. Marx would not agree with this for the simple reason that he defines the two
24 2007fa Econ 5080 U of Utah
concepts differently. Every time Marx uses the word ‘value’ he is referring to the congealed
abstract labour expended on the commodity (Hans [105]). Le Trosne on the other hand
suggests that the value of a commodity exists only because it can be exchanged with some
other commodity/ies. Here to Marx, Le Trosne is only talking about the exchange value of
the commodity and not its value.
The exchange value of a commodity for Marx is an outcome of some social relations
that take pace in the marketplace. The exchange-value only provides producers with signals
about the quantity of a commodity to be produced. For Marx, the value of a commodity
makes it exchangeable (Hans [105]). From the last sentence it seems that Marx is agreeing
with Le Trosne and alludes to the same type of connection that Le Trosne has developed
between value and exchange value. It must be noted that Marx considers exchange value
to be only a superficial manifestation of value. Marx believes that although value in its
own right is a social relation stemming from production, he describes exchange-value as
form of value (Annotations page 76). Also, I think for him value exists independent of
exchange value of a commodity. The exchange value comes about only in the market place
i.e. only through some social relations that govern trading of commodities. If a commodity
is produced and consumed without being traded then it still contains value i.e. the congealed
abstract labor inside it. What it would not have is an exchange value since it has not been
put up for trading. Le Trosne’s statment on the other hand implies that if commodities are
not traded then they will not contain any value—an argument that Marx would not find
palatable. In summary, exchange value comes about due to social relations taking place
on the surface, whereas the value of a commoditiy exists due to the social relations that
exist behind the surface phenomena. This is a crucial distinction to Marx that Le Trosne’s
statment completely seems to miss or ignore.
Hence, if Marx were to rephrase Le Trosne’s statment he probably would have said ‘the
value of a commodity exists because of the congealed abstract labour present inside it.’ or
‘the value of a commodity makes it exchangeable.’
Hans: Very good, just one quibble: if the product is never traded but consumed by the producer then it is not
a commodity and has no value. The difference between Marx and Le Trosne is whether value is produced in
production (Marx) or in the market (Le Trosne).
Message [131] referenced by [208] and [263]. Next Message by Daru is [256].
[147] Caroline: What exactly is being traded for this Thing. A thing, or a commodity,
in Le Trosne’s view is only valuable in relation to other commodities. Marx would probably
dissect Le Trosne’s proposition, and disagree with part of it, because there are more values
in a commodity than just its “exchange-proportions with other things” (Hans’ annotations,
pg. 22).
Le Trosne does not specify what is actually being traded. What does one consumer
see in a commodity that drives them to exchange or purchase it? “The value of a thing
consists in its exchange-proportions,” but this begs for more interpretation. Marx would
probably argue that the exchange proportions of a thing, or commodity, consists of usevalues,
as well as its exchange values. They are interrelated, as Marx says in question 75 of
the annotations: “exchange-relations are characterized by an abstraction from use-values...if
use-value is in high demand,...then it commands a higher exchange-value.” Also, on page 18
of the annotations, there are explanations as to how they are related, but also independent in