Cazenove writes, in relation to the identity of supply and demand, as put forward by James Mill (Say's Law),
““The supply of each man depends upon the quantity which he brings to market: his demand for other things depends upon the value of his supply. The former is certain; it depends upon himself: the latter is uncertain; it depends upon others. The former may remain the same, whilst the latter may vary. A hundred quarters of corn, which a man brings to market, may at one time be worth thirty shillings, and at another time sixty shillings, the quarter. The quantity or supply is in both instances the same; but the man’s demand or power of purchasing other things is twice as great in the latter as in the former case” (op. cit., pp. 111-12).” (p 65)
This argument was taken up by Marx in Theories of Surplus Value, Chapter 17. Cazenove is quite right here that A may take a quantity of corn to market that embodies a certain quantity of labour-time, but the actual value of this corn, can never be determined until it's sold, because only then, when the amount of demand for it is seen, can the amount of socially necessary labour expended on its production be determined. This is not meant in the sense of the temporary fluctuations of demand that over a period average out, but where this average level of demand, is above or below the level of supply at the market value. In other words, where there is some more permanent underlying shift in consumer preferences.
As Marx sets out, in Capital III, if 1,000 metres of linen are produced, using the most efficient means possible, and the labour-time expended is equal to 100 hours, say an exchange-value of £100, or £0.10 per metre, then, if demand at this price only amounts to 800 metres, 20% of the labour-time expended was not socially necessary. It is as though the 1,000 metres only has a value of 80 hours, or an exchange value of £80.
As Cazenove says, and Marx makes the same point, in Chapter 17, and again later in this book, the seller has control over the quantity of commodities they take to market, but not over the demand for them. But, in the same way, Cazenove points to the fact that, at one time, the seller of the corn may obtain sixty pounds, and only thirty pounds at another, as the basis for the fact that, in turn, this seller may provide twice as much demand, at one time, compared to another. Yet, the fact that the seller has sixty pounds to spend, rather than thirty pounds, is no reason that they will form twice the demand. As Marx sets out later, for the buyer, they require a certain quantity of the commodity, which is why the seller cannot determine the demand. If, as a buyer, I want to buy 1 metre of linen, the fact that I have £60 rather than £30, in my pocket, is no reason that I will buy 2 metres of linen, rather than the 1 metre I require. As Marx put it in Chapter 17, it is possible that the demand for the general commodity, money, may be higher than the demand for all other commodities, or in this case, my demand for the other £30, in my pocket, is greater than my demand for an additional metre of linen.
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