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RG1: Online reading group: Value, Price and Profit - Marx

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Steven.
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Dec 24 2005 22:36
RG1: Online reading group: Value, Price and Profit - Marx

Right well following on from this thread [ http://libcom.org/forums/viewtopic.php?t=7283 ] we've decided to start an online libcom reading group, and our first text will be Marx's Value, Price and Profit which is online here:

http://libcom.org/library/value-price-and-profit-karl-marx

From that thread it was suggest reading up to Chapter VI by Monday January 9th, cos of the xmas break, then maybe finishing it about 10 days later. Then we can choose a new text.

That sound cool to everyone?

Please feel free to let other people know if anyone else would be interested in joining it, and feel free to start the discussion on the first 6 chapters on this thread from now.

gordonL
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Dec 26 2005 16:23

hello I'm Gordon. I'm a newbie here but would like to join in anyway. I don't believe I have ever read Value, Price and Profit from cover to cover. I'm looking forward to reading it and discussing it.

Mike Harman
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Dec 26 2005 16:56

Welcome to the boards (and the reading group) Gordon!

selig
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Dec 26 2005 22:19

Hello. I'm also a newbie here. I've read Value, Price and Profit before, and will join in if this gets interesting and I have something to say. I can't say my english is great, but I hope I'll make myself understood.

Mike Harman
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Dec 26 2005 22:23
selig wrote:
Hello. I'm also a newbie here. I've read Value, Price and Profit before, and will join in if this gets interesting and I have something to say. I can't say my english is great, but I hope I'll make myself understood.

Hi Selig. Are you also from Riff Raff? Nice to see you here anyway.

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Dec 26 2005 23:03

I've been googling without luck but does anyone know if the text marx was repling to - that of Citizen Weston is actually available? It's been a long time since I read this and it strikes me that Marx's demolition is so obvious that perhaps he is only knocking down a straw man of his own construction.

Mike Harman
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Dec 26 2005 23:07

No idea. Looks like Weston was the chair of some meetings and a member of the General Council:

http://www.marxists.org/history/international/iwma/documents/1865/october.htm

also:

Quote:
On 1 April 1865, the Carpenters' Union of Chelsea asked that deputies be sent to explain the principles of the International Association. John Weston, a member of the General Council, also reported on their delegation to the Miners' Union.

http://www.marxist.com/hbtu/chapter5.html

So it looks like he was definitely a real person - Cleaver refers to him as an "owenite", no sign of his address though.

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Dec 27 2005 00:06

Yeah I'd found those - I note in Chapter 5 Marx sort of admits that he has oversimplified Weston's supposed argument to date but then implies this isn't very important.

Chap 5 wrote:
It might, perhaps, be denied that Citizen Weston has put forward the dogma: "The prices of commodities are determined or regulated by wages." In point of fact, he has never formulated it.

Anyway while marx's model remains useful an interesting question is to what extent it is a description of reality in todays world. Does the relatively simple explanation of value in chapter 6

Chap 6 wrote:
A commodity has a value, because it is a crystallization of social labour. The greatness of its value, or its relative value, depends upon the greater or less amount of that social substance contained in it; that is to say, on the relative mass of labour necessary for its production. The relative values of commodities are, therefore, determined by the respective quantities or amounts of labour, worked up, realized, fixed in them.

actually tell us all that much about why the price of goods like trainers or soft drinks can vary by a factor of 4 or 5 according to which manufacturing label they carry.

Another interesting problem is that this model has an identical flaw with the 'rising boats' assertion beloved of neo liberals. It assumes a free market - something that whatever the rhetoric capitalism has tended to seek to reduce over the last 150 years. With super monopolies like Microsoft is there any strong relationship between price, value and labour time in Windows.

I raise these not because I think they show the Mills/ Ricardo labour theory of value adopted by Marx to be useless but because I think one of the historical problems of marxist determinism was to get so wrapped up in the perfection of the theory to not actually be that bothered when real world conditions deviated from what was predicted. The fundamental flaw of 'scientific' determinism is obviously part of what destroyed the left once it got into the position to try and force reality to fit the theories that had been 'perfected'.

I guess a good part of the problem is that things like branding that have a major impact on price today were almost irrelevant in marx's time. The idea of capitalism using the state as an instrument of self regulation and planning was also not really around not to mention the idea that you'd have a host of transnational and global bodies set up to regulate / plan on the level of not only the planet but also the EU, NAFTA, Mercosur etc.

Mike Harman
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Dec 27 2005 00:59
Quote:
ctually tell us all that much about why the price of goods like trainers or soft drinks can vary by a factor of 4 or 5 according to which manufacturing label they carry.

Because price and value aren't the same thing. Lots of label goods are made by the same people in the same factories, using the same material as non-label goods. The difference in price is a result of the subjective 'worth' of these goods based on brand identity, and has nothing to do with their value.

LTV doesn't apply to art or other one offs, I think brands to an extent fall into this category (at least to the same extent as much modern art is commodities). To a large extent a brand identity is a separate form from the commodity, which may affect it's price (different labels on the same clothes, the same labels on widely different products), and it's a form that's derived from the subjectivity of aesthetics, from art. Just as art could have wildly varying 'values' 150 years ago despite similar production processes/socially necessary labour time, I see no reason why brands are much different now.

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Dec 27 2005 09:11
Catch wrote:

Because price and value aren't the same thing.

I know that they are not the same but Marx saw them as closely related. Also from Chapter 6

Marx wrote:
Price, taken by itself, is nothing but the monetary expression of value

The problem is that value is already a bit of a mysterous and unmeasurable thing, if you attempt to strongly seperate it from price to make the theory fit reality it becomes like the 'ether' that was once presumed to exist in space in order to 'scientifically' explain the gap between the expected movements of the planets and the observed movement.

And frankly trying to explain the price differences between Nike and Woolworth trainers on the grounds that Nike is art just looks a lot like a poor attempt to patch a flawed model. Or the price difference between a bottle of Coca Cola and Tesco white label Cola. Or more fundamentally price differences between retro virals or any other generic medicine and its patented parent.

This by far illustrates my biggest problem with marxism - a turn to faith to find 'explanations' for where the prophecy does not quite measure up to reality.

I'd suggest a more obvious approach here is to observe that for a sizeable section of commodities the LTV does not hold and then to look for what sort of theory does explain this. Far better than to claim everything was predicted 150 years back and it is only a question of us mortals correctly interpretiting the scripture.

As I suggest above I think the explanation in the Nike case is quite connected to capitalism developing in a way that marx did not expect - that far from seeing the 'anarchy of the market' the market became increasingly regulated. The ability to sell one set of trainers for four times the price of another near identical set depends very heavily on such regulation to protect brand identity.

As above the LTV assumes a free market - something that does not exist. As a model it tells us something about how capitalism works but it is not a complete description of capital and the determinism that attempts to treat it as such (and look for 'explanations' to correct reality) does us no favours.

Mike Harman
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Dec 27 2005 11:25
Quote:
The ability to sell one set of trainers for four times the price of another near identical set depends very heavily on such regulation to protect brand identity.

This is true, but ignores the reason why one brand may command a higher price, and that's down to marketing which primarily works on an aesthetic basis IMO.

Quote:

And frankly trying to explain the price differences between Nike and Woolworth trainers on the grounds that Nike is art just looks a lot like a poor attempt to patch a flawed model.

The last thing I'd do is call Nike art. Would I would do, is call advertising form very closely related to art - a form which has assimilated much of the art world in both technique and actual personel. Obvious examples would be Absolut vodka or Red Bull which are closely intertwined with galleries etc., but similarly TV adverts borrow from film, film from adverts - and largely inhabit a separate world from the products. The actual labels attached to products are merely symbolic representations of the brand itself - which is connected to a much wider area of lifestyle.

This can't be explained away by intellectual property laws allowing for monopolies - because the question isn't why "everything isn't Coke" - and therefore priced higher - due to intellectual property; it's why brands command higher prices than generic (or lesser-branded) alternatives in the first place. Unless the latter question is answered, the former means very little. I think branding is much more connected to the artificial creation of demand - there's a surplus of footwear, but relative scarcity of any particular brand or range.

Intellectual property is more interesting in terms of CDs or DVDs - where the format and production cost is almost identical (give or take a few pence for packaging/printing) and the only difference is the data contained - in fact prices for CDs are fairly standard regardless of what's on it, because production costs are largely the same. Budget CDs tend to be public domain material, there's no royalties to pay, but there's also no recording costs. Imports and limited editions tend to be higher priced, where economies of scale aren't possible. The only thing keeping any price at all on CDs though is force - because the same data can be moved around for free on the 'net. Similarly with generic drug alternatives, that really is due to force in most cases, but it's force which regulates supply - keeps it low.

Marx may have been dealing with a properly free market for most of his examples - given that he was critiqueing liberal political economy that makes sense no? I don't see that the existence of price regulation and force to maintain certain pricing levels is much of an argument against the fundamental exposition of the commodity form and the two-sided nature of value. All these things happen within a system of commodity production, and it's the nature of the commodity form, of the relationship between capital and labour that's important.

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Dec 27 2005 12:27
Catch wrote:
Would I would do, is call advertising form very closely related to art

Not in this context it isn't. The price of art escapes the LTV because pieces are unique and so price is set by supply and demand rather than having a relationship to the amount of labour they contain.

This does not apply to mass produced items that are branded. Coca Cola does not command a higher price because it is hard to get or is about to run out. Outside of brief periods when new products are released the same is true of trainers etc. Advertising has a role in terms of convincing people that it is worth paying the extra but this is quite different from the exclusion of art from the LTV and in fact is an example of where the LTV does not seem to hold.

Again I'm not trying to dismiss the LTV as useless (which is where your last sentence seems to be going) rather illustrating that marx's writing should not be treated as scripture that is capable of fully explaining the world today once correctly interpretated.

Catch wrote:
Marx may have been dealing with a properly free market for most of his examples - given that he was critiqueing liberal political economy that makes sense no?

Well the LTV is older than marx and was developed as a measure by liberal economists but that is sort of beside the point. And in this piece its not actually liberal free marketers he is critiquing.

Catch wrote:
I don't see that the existence of price regulation and force to maintain certain pricing levels is much of an argument against the fundamental exposition of the commodity form and the two-sided nature of value.

It's not meant to be - it is rather an early comment on the fitting of reality to theory that developed in response to my first post. But behind are some of the much more fundamental problems that flowed from the gap between the model and reality.

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Dec 27 2005 12:34

Hmmm I've not read the text yet so won't say too much, but regarding brand identity meaning that coca-cola sells for five times as much as tesco value cola (and the rest...), surely if you count the labour in marketing and branding then that adds to the value no? And if not why not?

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Dec 27 2005 16:59
John. wrote:
Hmmm I've not read the text yet so won't say too much, but regarding brand identity meaning that coca-cola sells for five times as much as tesco value cola (and the rest...), surely if you count the labour in marketing and branding then that adds to the value no? And if not why not?

Right so what you have done here is take a look at your theory, spotted a gap with reality and therefore assumed that this must mean reality can be 'rediscovered' to fit the theory. So confident are you in this that you haven't even bothered with discovering the facts - apparently to suggest they exist is enough. This again highlights my concern with marxism as a method/label.

But could it be that adding the labour in 'marketing and branding' into the equation would provide the missing hours? I'd be surprised if it did but even if it did it would still appear to breach LTV as marx used it.

Marx Ch6 wrote:
You will recollect that I used the word "social labour," and many points are involved in this qualification of "social." In saying that the value of a commodity is determined by the quantity of labour worked up or crystalized in it, we mean the quantity of labour necessary for its production in a given state of society, under certain social average conditions of production, with a given social average intensity, and average skill of the labour employed

From this and what he has written elsewhere Marx would have considered 'marketing and branding' as parasitical on necessary labour - not something that adds to surplus but something which appropiates part of it. It may add to price but just how does this create social value?

A final note - this starts to illustrate just how much is hidden in the distinction between value and price. What exactly is value - is it a real thing at all?

Mike Harman
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Dec 27 2005 17:05
JoeBlack2 wrote:
Catch wrote:
Would I would do, is call advertising form very closely related to art

Not in this context it isn't. The price of art escapes the LTV because pieces are unique and so price is set by supply and demand rather than having a relationship to the amount of labour they contain.

This does not apply to mass produced items that are branded.

Again I think the brand and the physical label are different things. Does the branding and marketing constitute a separate commodity or is it integral to the product?

Quote:

Coca Cola does not command a higher price because it is hard to get or is about to run out. Outside of brief periods when new products are released the same is true of trainers etc. Advertising has a role in terms of convincing people that it is worth paying the extra but this is quite different from the exclusion of art from the LTV and in fact is an example of where the LTV does not seem to hold.

If not from labour, where does the extra value come from - what entitles the producer of Coca Cola to more money than the producer of Happy Shopper Cola (apart from Happy Shopper tasting like bubble gum of course)?

Quote:

Again I'm not trying to dismiss the LTV as useless (which is where your last sentence seems to be going) rather illustrating that marx's writing should not be treated as scripture that is capable of fully explaining the world today once correctly interpretated.

Who's said that? I don't think branding makes any fundamental change to the basis of the commodity relationship, do you?

Quote:
Well the LTV is older than marx and was developed as a measure by liberal economists but that is sort of beside the point.

Yes, I know that, what's your reason for pointing it out?

Mike Harman
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Dec 27 2005 17:07
JoeBlack2 wrote:

From this and what he has written elsewhere Marx would have considered 'marketing and branding' as parasitical on necessary labour - not something that adds to surplus but something which appropiates part of it. It may add to price but just how does this create social value?

I would too. However, even the most generic of generic colas has money spent on marketing and branding (via TESCO's general advertising etc.) It's usually categorised under revenue for capital - same as military expenditure.

I'd wager it's a far lower proportion of price for an own-brand product though.

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Dec 27 2005 17:19

Forgive me for coming with some notes, since I'm not reading the piece with you.

However, I saw it necessary to make a clear distinction between value and price (made by Marx in Capital). Commodities can be sold above or below their actual value (ie. the social average necessary labour time for production of a unit).

Let's take an example:

Suppose you have to pairs of shoes which are being sold as capitalist commodities: NoName and Nike. They are both produced with the same technique and with the same amount of labour time crystallized in them (ie. they have the same value). However, the highly subjective notion of use value will probably affect your willingness to pay a price above the value of the commodity. If you have a circle of friends where it is important to wear brand clothes you will probably be more inclined to buy the Nike pair (above the shoe value), but if you are more into spending your money on something else you will probably be more inclined to buy the NoName pair (at or below the shoe value).

There are several more examples, but if value and price were the exact same thing all items of one sort would be at the same price (which they are apparently not).

One more example. If a capitalist has an ingenious engineer working with him and this engineer comes up with a new invention to make the production more efficient etc. and the capitalist implements it, he will have reduced the production time of his shoes (while the other producers are still working in an antiquated manner) he will be able to keep selling his shoes at the value, while having much lower prices on labour-power for instance. Thereby he will have received more surplus value than other capitalists and thus forcing them to follow his lead.

Very well, I haven't read Value, Price and Profit (perhaps I should wink) but I hope my short notes are useful.

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Dec 27 2005 17:33
Catch wrote:

Again I think the brand and the physical label are different things. Does the branding and marketing constitute a separate commodity or is it integral to the product?

Sorry your losing me here - I'd have thought 'the product' is what is bought so it contains whatever has gone into its production.

Catch wrote:
If not from labour, where does the extra value come from

Back up on this one for a second. We agree there is extra 'price' but is there extra value in the sense marx seems to use the word. I'd say not. But on the other hand marx sees price as strongly indicative of value so what does it mean when the two seem to get so divorced. Is value a real thing here or something metaphycial as some post-marxists have suggested.

Catch wrote:
I don't think branding makes any fundamental change to the basis of the commodity relationship, do you?.

As marx presents it there does seem to be something odd going on here - quite what that is I don't know which is why I'm throwing out questions. But to restate my position, the LTV is a useful model for explaining how expolitation works - it is not however a perfect description of reality, indeed in the modern world more and more flaws start to appear. Going back to marx to explain these flaws doesn't work and also doesn't make much sense.

Quote:
Well the LTV is older than marx and was developed as a measure by liberal economists but that is sort of beside the point.
Catch wrote:
Yes, I know that, what's your reason for pointing it out?

If you scroll back up you'll see I said this in response to you saying marx was using the LTV in the context of arguing with liberal economists. I said this isn't true of this pamphlet but anyway the LTV was a product of liberal economists so even if this was true it wouldn't tell us anything.

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Dec 27 2005 17:39
cph_shawarma wrote:

However, I saw it necessary to make a clear distinction between value and price (made by Marx in Capital). Commodities can be sold above or below their actual value (ie. the social average necessary labour time for production of a unit).

I get this but marx also clearly expects prices to tend towards the value not to remain permanently above it over a long period. A far bit of what he has written in the section under discussion is explaining just this to the reader.

Also the question arises as to what value is once it permanently retreats from the attempt of the market to measure it?

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Dec 27 2005 18:26
JoeBlack2 wrote:

Sorry your losing me here - I'd have thought 'the product' is what is bought so it contains whatever has gone into its production.

I think a lot of companies that are brand based view their brands as separate (what is advertised is often the brand/lifestyle rather than the actual product, the brand can be applied to lots of things) - I'm asking whether we should agree with them.

Quote:

Back up on this one for a second. We agree there is extra 'price' but is there extra value in the sense marx seems to use the word. I'd say not. But on the other hand marx sees price as strongly indicative of value so what does it mean when the two seem to get so divorced. Is value a real thing here or something metaphycial as some post-marxists have suggested.

Price includes a lot of things other than labour value - rent, tax, etc. etc. I don't think you can quantify exchange value and surplus value in the same way you can quantify price and profit, no. Nor do I think value is any more metaphysical than money, prices - it's the result of social relationships, not a property inherent in objects.

Catch wrote:
I don't think branding makes any fundamental change to the basis of the commodity relationship, do you?.
Quote:

As marx presents it there does seem to be something odd going on here - quite what that is I don't know which is why I'm throwing out questions. But to restate my position, the LTV is a useful model for explaining how expolitation works - it is not however a perfect description of reality, indeed in the modern world more and more flaws start to appear. Going back to marx to explain these flaws doesn't work and also doesn't make much sense.

Quote:
Well the LTV is older than marx and was developed as a measure by liberal economists but that is sort of beside the point.
Catch wrote:
Yes, I know that, what's your reason for pointing it out?

If you scroll back up you'll see I said this in response to you saying marx was using the LTV in the context of arguing with liberal economists. I said this isn't true of this pamphlet but anyway the LTV was a product of liberal economists so even if this was true it wouldn't tell us anything.

I think that's where we've gone wrong.

I said

Quote:
Marx may have been dealing with a properly free market for most of his examples - given that he was critiqueing liberal political economy that makes sense no?

US Libertarians, or other people who believe in free market capitalism with zero regulation, they think exploitation is a result of monopolies and regulation, allowing for rackets to form, and that a 'pure' capitalism would be a fair system. This is the strength of Marx's work as an analysis of capitalism - it shows the way that exploitation is mediated by fair and equal contracts via money, commodities and wage labour. Many people who favour free-market capitalism would also like to get rid of intellectual property rights, regulation, even ground-rent - capitalism could theoretically exist quite well without them (although IMO not for long), what it can't exist without is capital and commodity production. In other words to argue with liberal economists who assume a free market system, it's necessary to argue within that logic. Primitive accumulation and the rest aren't discounted by any means though.

Mike Harman
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Dec 27 2005 18:30
JoeBlack2 wrote:

I get this but marx also clearly expects prices to tend towards the value not to remain permanently above it over a long period. A far bit of what he has written in the section under discussion is explaining just this to the reader.

I'd say in relation to value overall and prices overall, it would tend to. I don't think an individual commodity (Coca Cola) needs to at all.

Someone like Loren Goldner deals with the idea of a lot of profit actually being redistribution of surplus value, not it's creation (that fictitious capital piece - in the library).

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Dec 28 2005 13:16

Hmmm it looks like this discussion could split in a few different directions.

I would suggest maybe we can start any number of different threads if we need to, we just start the thread with "RG1" at the beginning of the title, for Reading Group 1. Then if we post a link to it on this this thread one of us admins will edit the first post here to add links to all the different discussion - that sound cool?

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Dec 29 2005 13:23
Catch wrote:
I'd say in relation to value overall and prices overall, it would tend to. I don't think an individual commodity (Coca Cola) needs to at all.

Two points.

1. Even on this thread we are not talking of just 'an individual commodity (Coca Cola)' seemingly escaping the LTV - at least two other examples have also been given. In that context what does overall mean - apart from a patch you seem to have decided must exist to fix the problem.

2. Maxism went on a lot about 'scientific socialism'. Well one part of the scientific method is the test of falsifiablity http://en.wikipedia.org/wiki/ and it seems replies like this respond to problematic false results by trying to redefine the LTV in a way that will mean it is no longer falseable. Which incidentaly is what creationists do with 'intelligent design'.

In other words while one way of dealing with examples that appear to escape the LTV are to dismiss them as irrelevant this is not scientific. While it might convince a true believer not to investigate further to a sceptic like myself it just looks like faith overcoming science.

Note the such escapes do not show that the LTV is wrong in all circumstances, just that, like Newtonian physics, it does not have the absolute explanatory power that was once believed. Given that capitalism did not develop the way marx expected it to there is something to be gained from considered the effects such fundamental flaws in the theories he used in constructing his theory may have generated.

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Dec 29 2005 13:47
revol68 wrote:
[hmmm i think your mistaking scientific methodology for Marx meant by scientific, remember it was the spirit of the age and generally scientific was meant as short hand for without regard to tradition, superstition and religion. God even Kropotkin talked about scientific anarchism.

I think you may have something of a point here as AKAIK it was Engels who really pushed the more determinstic 'scientific socialism' angle. Just checked wikipedia and it seems to agree http://en.wikipedia.org/wiki/Scientific_Socialism Actually Engels is the source of a lot of the crap that annoys me about 'Marxism'.

revol68 wrote:
As for Labour Theoy Value well perhaps i'm daft but i never thought it was something beyond saying that all value is the produce of labour whether that be from mining or marketing. Afterall isn't "immaterial" labour such as marketing important in the production of the brands value? I never thought Marx was saying you could simply work out the value of something based on the labour costs.

If you read the pamphlet this thread is discussing (or even just the quotes from it I've posted so far) you'll see marx is being a lot more specific than the broad definition you offer above. Again a re-occuring problem I see with marxism is peope defending the specific with such broad generalisations but then returning to trot out the theory that only flows from the specific (this isn't directed at you, more at official marxism in its various guises).

revol68 wrote:
And I think capitalism has developed in ways that is truely showing the genuis of Marx.

Care to expand on this? I think marx contributed in a major way to a materialist understanding / critique of capitalism but his specific predictions were nearly all wrong. Unfortunately because of his prophet like status many of his followers rather than acknowleding and thus correcting this instead deepened them (eg Lenin on imperialism) and as this went on generation after generation ended up really off the wall (post WWII trotskyism).

Mike Harman
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Dec 29 2005 14:26
JoeBlack2 wrote:
Catch wrote:
I'd say in relation to value overall and prices overall, it would tend to. I don't think an individual commodity (Coca Cola) needs to at all.

Two points.

1. Even on this thread we are not talking of just 'an individual commodity (Coca Cola)' seemingly escaping the LTV - at least two other examples have also been given.

Nah, some individual products (like coke or pharmaceuticals) may have prices which differ significantly from exchange value for long periods - in this case higher. Other products may have prices which differ significantly from exchange value in the other direction - er, not sure about that but maybe electricity generated from nuclear power?

"Prices" may differ widely from exchange value, but does that mean that price excapes value overall?

If you reduce Marx's analysis of capital to individual companies or individual sectors I think that misses the point. Although it's easy to do and it's something I'm guilty of doing myself.

Quote:

In other words while one way of dealing with examples that appear to escape the LTV are to dismiss them as irrelevant this is not scientific. While it might convince a true believer not to investigate further to a sceptic like myself it just looks like faith overcoming science.

Any kind of research - whether in social or material sciences, has results that don't fit nice smooth line graphs. Is insisting on the presence of the line, of patterns abstractable from material conditions, faith?

Looks like revol has answered your points on scientific socialism.

I don't think you'll get much argument on here in favour of the Engels/Kautsky/Lenin interpretations of Marxism. Although my reading of Marx and other Marxists isn't that extensive, what interests me most at the moment is groups like Aufheben and people like Loren Goldner, Harry Cleaver and others who've been reappraising Marx's work and trying to relate it to the way capitalism has evolved. You seem to be arguing against "Marxism" as synonymous with Leninism.

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Dec 29 2005 15:39
Catch wrote:
Nah, some individual products (like coke or pharmaceuticals) may have prices which differ significantly from exchange value for long periods - in this case higher.

I think though in the very sections we are reading marx rules out the idea of long term deviations - it is to the core of his argument with Weston but of course in a somewhat different context.

Catch wrote:
but maybe electricity generated from nuclear power?

Yeah this is another good example but actually I suspect the energy sector in general operates outside of the LTV (oil price for instance seems to have little relationship with labour input). Without thinking hard in fact you can see vast sectors of the western economy that appear to have escaped the LTV (healthcare, education, defence, aerospace, agriculture etc) to a greater or lesser extent. Once you acknowledge this then the LTV looks increasingly less useful in predicting the real world - its use is really just in sketching how explotation works (which of course in not a minor thing).

Catch wrote:
"Prices" may differ widely from exchange value, but does that mean that price excapes value overall?

What meaning do you attach to 'overall'?

Catch wrote:
If you reduce Marx's analysis of capital to individual companies or individual sectors I think that misses the point.

If it fails to explain an individual sector than why assume it tells you anything about the sum total of several sectors added together (or indeed the average of all sectors). What is your basis for that assumption beyond liking the analysis?

Catch wrote:

Any kind of research - whether in social or material sciences, has results that don't fit nice smooth line graphs. Is insisting on the presence of the line, of patterns abstractable from material conditions, faith?

Huh? I don't see what your driving at here - who expects 'nice smooth line graphs'? I don't.

Catch wrote:

don't think you'll get much argument on here in favour of the Engels/Kautsky/Lenin interpretations of Marxism. A.. You seem to be arguing against "Marxism" as synonymous with Leninism.

I'm not arguing against anything beyond a treating of marx as a prophet - and it is not just orthodox leninists who fall into that. Autonomists (in particular Negri in Marx beyond Marx) are terrible for it. Although actually I do find Cleaver and some of the people in that extended circle useful in part because they delibretly move away from the gospel according to marx and towards a more inclusive look at the development of socialist ideas.

gurrier
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Dec 29 2005 16:36
Catch wrote:
Nah, some individual products (like coke or pharmaceuticals) may have prices which differ significantly from exchange value for long periods - in this case higher. Other products may have prices which differ significantly from exchange value in the other direction - er, not sure about that but maybe electricity generated from nuclear power? "Prices" may differ widely from exchange value, but does that mean that price excapes value overall?

A couple of points.

1. Don't you mean 'use value' when you say 'exchange value' above? 'exchange value' is the median around which price fluctuates according to Marx and there should never be a consistent and long term divergence between price and exchange value - by definition. In the cases mentioned above, it is certainly far from being the case.

2. The price of virtually all agricultural commodities produced in the third world is far, far lower than what they should be according to the LTV - coffee, palm kernels, palm oil, rubber, etc, etc.

I think that the marked, systematic and long-term nature of these divergences is such that it shows that the LTV lacks sufficent explantory power on its own in order to understand modern economics. I think Joe Black has hinted at the source of the problem above. If we had anything approaching a free market these commodities would, I think, arrive at a price that was equivalent to the amount of labour embodied in them.

In the case of Nike, if they didn't have IP laws and a host of international treaties with an awfully big military and economic force behind them, then loads of people would be producing identical and even improved copies of their products, swooshtikas and all (they already are to a small and still insignificant extent) and their price would adjust to their value (with variations depending on supply and demand and popular fetishes).

In the case of farmers in the third world, without the big monopoly commodity cartels of multinational buyers, they would be able to adjust production towards undervalued commodities and away from those with depressed prices, hence leading to prices across the board that would reflect the labour put into them. The multinationals have fought tooth and nail to ensure that they can't with powerful weapons such as the WB / IMF / WTO as well as the cruder military interventions. Until the third world debt crisis many of these countries were trying to do exactly that - by switching production away from global commodities to 'import substitution', but it is practically impossible to do now for any country as the washington boys would immediately pull the plug and crush them - by invasion if necessary.

I think that Marx's fundamental mistake was in underestimating the self-awareness of capitalists and their ability to take conscious action to successfully counteract many of the forces towards communism which he identified within capitalism. He also, characteristically, overestimated the ability of economic logic to overcome the logic of power - if you look around the world today it isn't too hard to identify how power relations have a strong influence on pricing.

martinh
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Dec 29 2005 18:02
John. wrote:
Hmmm I've not read the text yet so won't say too much, but regarding brand identity meaning that coca-cola sells for five times as much as tesco value cola (and the rest...), surely if you count the labour in marketing and branding then that adds to the value no? And if not why not?

Surely branded products sell for more because their manufacturers can command more. Historically, they arose as a means of countering consumers' fears about adulterated foodstuffs. Generic, white label products were invented by the supermarkets to undermine the power of brands. The argument that they are identical to the branded products is as much marketing as the brands' arguments that they are inferior versions.

They also only really exist in certain products - there aren't really unbranded electronics, just cheaper and more expensive brands, which tends to suggest that there are certain characteristics held by these products. In the UK at least they are mainly sold in the supermarkets, who wield enormous power over their suppliers, even when they are major multinationals like Unilever, such that they insist on the suppliers paying the supermarket for promotions (like BOGOFFs) or at least carrying some of the cost.

While probably unforseen in the 19th century, the supermarkets can do this because, between them, they are a super-monopoly and have successfully resisted other parts of the capitalist class' desire to regulate them.

So, brands are an effort (quite a sophisticated one with deep historical roots in the 19th century) to manipulate supply and demand. White label versions are the supermarkets' response.

Regards,

Martin

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jef costello
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Dec 29 2005 18:12

just a quick point, supermarkets make more profit on branded goods. On both individual units and collectively.

Own brands do two things, they make the prices in general seem lower (people judge prices by certain items) they allow people with less money to continue using the store, but they maintain the aspirational value of other brands as they are marked out as cheap.

Value is not necessarily defined by the market.

When I was a kid 'le coq sportif' was a poor brand. A few years back they suddenly raised the prices so that the stuff cost as much as nike/reebok etc and for a couple years it was, if not as popular, it at least maintained its value.

Brands are a cheap method of increasing price and therefoe surplus.

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AndrewF
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Dec 29 2005 19:21
Jef Costello wrote:

Value is not necessarily defined by the market.

In the context of this reading group it is - Marx says in C5

Marx wrote:
Price, taken by itself, is nothing but the monetary expression of value

Your also trying to have your marx and eat him when you go on to say

Jef Costello wrote:

Brands are a cheap method of increasing price and therefoe surplus.

In this context the missing word after surplus is 'value' - except here because the LTV does not appear to hold this would result in the sentence not making (marxist) sense as value would suddenly come from selling price rather than labour input.

The whole basis Marxs argument in these 6 chapters is to establish a strong relationship between value and price - against Citizen Weston's supposed argument "that the amount of real wages, that is to say, of wages as measured by the quantity of the commodities they can buy, is a fixed amount, a constant magnitude."

Marx needed to establish a strong value/price relationship in order to defeat Weston's argument - the sort of loose relationship being argued by some here would allow space for Weston's argument to apply, at least for periods and so defeat marxs original purpose. So although the first 5 chapters may read like a load of outdated waffle against someone we have never heard of they are of value in establishing what marx was arguing.

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georgestapleton
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Dec 30 2005 03:24
gurrier wrote:
Catch wrote:
Nah, some individual products (like coke or pharmaceuticals) may have prices which differ significantly from exchange value for long periods - in this case higher. Other products may have prices which differ significantly from exchange value in the other direction - er, not sure about that but maybe electricity generated from nuclear power? "Prices" may differ widely from exchange value, but does that mean that price excapes value overall?

A couple of points.

1. Don't you mean 'use value' when you say 'exchange value' above? 'exchange value' is the median around which price fluctuates according to Marx and there should never be a consistent and long term divergence between price and exchange value - by definition. In the cases mentioned above, it is certainly far from being the case.

No he definitely means exchange value and not use value. Use value has nothing to do with price level that is exchange, use value plays a part in consumption but not in exchange. And exchange value is not a median around which price flutuates. It is the exchangability of a commodity. It relates closely to natural-price of classical economics but it has no parralel in the post marxian economic orthodoxies. The closest thing to a parrellel to exchange value in economics is the long run cost price in perfect competition. (Cost price is equal to market price in long run perfect competition, but I'm saying cost price and not simply price to emphasis the determining factor of price in perfect competition i.e. cost).

gurrier wrote:

2. The price of virtually all agricultural commodities produced in the third world is far, far lower than what they should be according to the LTV - coffee, palm kernels, palm oil, rubber, etc, etc.

No it's not according to LTV, the value of a good is determined by the value of socially necessary labour to produce it. The price of labour-power is socially determined. And in the third world it's cheaper then in the first. LTV is a theory used to explain society it's not some theory of transcendent value. The entire point of it is to critique that. Labour has no value as Marx says.

gurrier wrote:

I think that the marked, systematic and long-term nature of these divergences is such that it shows that the LTV lacks sufficent explantory power on its own in order to understand modern economics. I think Joe Black has hinted at the source of the problem above. If we had anything approaching a free market these commodities would, I think, arrive at a price that was equivalent to the amount of labour embodied in them.

In the case of Nike, if they didn't have IP laws and a host of international treaties with an awfully big military and economic force behind them, then loads of people would be producing identical and even improved copies of their products, swooshtikas and all (they already are to a small and still insignificant extent) and their price would adjust to their value (with variations depending on supply and demand and popular fetishes).

In the case of farmers in the third world, without the big monopoly commodity cartels of multinational buyers, they would be able to adjust production towards undervalued commodities and away from those with depressed prices, hence leading to prices across the board that would reflect the labour put into them. The multinationals have fought tooth and nail to ensure that they can't with powerful weapons such as the WB / IMF / WTO as well as the cruder military interventions. Until the third world debt crisis many of these countries were trying to do exactly that - by switching production away from global commodities to 'import substitution', but it is practically impossible to do now for any country as the washington boys would immediately pull the plug and crush them - by invasion if necessary.

I completely agree but I think Marx would as well.

gurrier wrote:

I think that Marx's fundamental mistake was in underestimating the self-awareness of capitalists and their ability to take conscious action to successfully counteract many of the forces towards communism which he identified within capitalism. He also, characteristically, overestimated the ability of economic logic to overcome the logic of power - if you look around the world today it isn't too hard to identify how power relations have a strong influence on pricing.

This is strange becasue I don't think Marx made this mistake, far from it, I think this was Marx's great achievement. That is exposing the power relations that lie behind the market, or rather ARE the market.