Demand and supply are only identical if we include in the equation money, as the general commodity. In other words, if I have 1 ton of iron, with an exchange-value of £3, I supply 1 ton of iron and what I demand is £3 in money. But, what I also then require is that there is someone who who demands 1 ton of iron at the price of £3 per ton, and who is prepared, and able to supply the £3 of money to obtain it. This is a far cry from the belief that just because a range of commodities are produced in the economy, which theoretically all could be exchanged for each other at their values, they will do so, because it excludes completely the issue of use value, of demand for those commodities, which is determined by completely different laws than those which objectively determine the value of commodities.
Marx then proceeds to set out a series of comments by Mill, whereby he proceeds from the form of demand and supply of commodities, as it applies under barter, to the conclusion that the same equality applies under capitalism.
““But it is evident, that each man contributes to the general supply the whole of what he has produced and does not mean to consume. In whatever shape any part of the annual produce has come into his hands, if he proposes to consume no part of it himself, he wishes to dispose of the whole; and the whole, therefore, becomes matter of supply: if he consumes a part, he wishes to dispose of all the rest, and all the rest becomes matter of supply” ([James Mill, Elements, p. 225;] Parisot, p. 253).” (p 102)
All this means, Marx says, is that all the commodities placed on the market constitute supply.
““As every man’s demand, therefore, is equal to that part of the annual produce, or of the property generally, which he has to dispose of”
[Stop! His demand is equal to the value (when it is realised) of the portion of products which he wants to dispose of. What he wants to dispose of is a certain quantity of use-value; what he wishes to have is the value of this use-value. Both things are anything but identical]” (p 103)
In other words, I have a ton of iron, which is a use value. I put it in the market, because, for me, it has no use-value; I do not demand it. By putting it on the market, I create a supply of 1 ton of iron, as use value. What I demand is its exchange-value. Under barter, that exchange-value might be, say, 10 metres of linen. If someone else has 10 metres of linen, which they take to market, we might exchange our respective commodities. But, even under barter, this is not guaranteed. The value of 1 ton of iron, and 10 metres of linen may be the same, but, if the owner of the 10 metres of linen only has a demand for half a ton of iron, they will have no reason to exchange all of their linen for all of my iron. That would mean they had given up 5 metres of linen for half a ton of iron, which has no use value for them, and which they would then need to sell.
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