Theories of Surplus Value, Part III, Chapter 20 - Part 32

In a money economy, the exchange-value of a ton of iron may be £3, but, if there is not a demand for this 1 ton of iron, at a price of £3 per ton, my demand for £3 of exchange value, in exchange for my supply of a ton of iron, may not be satisfied either. Despite the exchange-value of the iron being £3, I might have to accept only £2.50, if that is the market price at which there is a sufficient demand for 1 ton of iron. 

Mill continues, 

““and each man’s supply is exactly the same thing”” (p 103) 

To which Marx responds, 

“by no means; his demand does not consist in what he wishes to dispose of, i.e., the product, but in the demand for the value of this product; on the other hand, his supply really consists of this product, whereas the value is only conceptually supplied”. (p 103) 

Even in terms of barter, the value of the commodities, on each side of actual exchanges, may not be equal, because, in these actual exchanges, demand and supply will play a part in determining the actual rate of exchange. It can be seen today. Go to a market, and traders can be seen to sell off some perishable commodities, towards the end of the day, at lower prices than they were charging at the start of the day. All kinds of service industries, from airlines to leisure centres, have peak and off-peak prices. 

When Mill concludes that, 

““the supply and demand of every individual are of necessity equal” ([James Mill, Elements, pp. 225-26;] Parisot, pp. 253-54).” (p 103), 

this is correct only insofar that, in practice, in any actual exchange, what an individual supplies is equal to what they receive in exchange. But, because market prices, i.e. the rate at which these exchanges actually take place, are rarely the same as exchange-values, this is far from being the same thing as saying that the value of the use value that is being supplied is equal to the exchange-value being demanded by the seller. 

“That is, the value of the commodity supplied by him and the value which he asks for it but does not possess are equal; provided he sells the commodity at its value, the value supplied (in the form of commodity) and the value received (in the form of money) are equal. But it does not follow that, because he wants to sell the commodity at its value, he actually does so. A quantity of commodities is supplied by him, and is on the market. He tries to get the value for it.” (p 103) 

Back To Part 31

Forward To Part 33