The producer of a commodity has only a very limited control over the value of the commodity they produce. For example, they have no control over the value of the materials and other constant capital they use in its production. They have to buy those commodities on the market, and thereby have to pay the market price for them. A more astute capitalist may be able to negotiate slightly better prices than their competitors, large producers will generally be able to to get better prices than smaller producers, but apart from these variations, the value of the commodities they have to buy, in order to produce, are outside their control.
The producer will similarly have to pay the market rate of wages for the labour-power they employ. But, the value of the commodity they produce depends not on the value of wages, but on the quantity of labour-time required to produce the commodity. In general, that depends on the level of productivity, which is itself dependent on the development of technology, in general, and in the specific industry in particular. An individual producer only has control over this aspect in so far as the amount of capital they have at their disposal limits the scale at which they can produce. Larger capitals can produce on larger scales, and may, thereby, be able to use more fixed capital, or better fixed capital, so as to have a higher level of productivity, and thereby, a lower individual value for their particular output.
But, even then, the market value, or price of production, for the commodity they produce, is determined not by their own individual value, or price of production, but by the average for the industry. So, the largest part of the value of the commodities they produce is outside their control. The only thing the individual producer can determine, given that value, and given the capital at their disposal, is the quantity of that commodity which they supply to the market. Whilst they can control how much they send to market, competition will always lead them to send as much to market as possible, so as to gain a larger market share, and because producing on a larger scale reduces their own individual price of production, giving them a higher a higher rate of profit, and a surplus profit. But, they have no control over the demand for the commodities they supply, at their market value/price of production. If demand is inadequate, those larger producers, have an incentive for their larger scale production, because, their lower individual price of production, thereby enables them to sell at lower prices, thereby ensuring they can sell all of their output at the expense of their competitors, who cannot. These competitors can then only sell all of their output, if, by reducing their selling prices, they are able to expand the market for the commodity. That may not be possible, or may only be possible at prices that do not cover the cost of production.
In order to try to obtain some measure of such control, in the 20th century, the capitalist state's role developed to try to regulate, at least, the level of aggregate demand. Central banks used monetary policy to try to prevent a deflation of the general price level, the welfare state was created to regulate the supply of labour-power, and to prevent sudden economic changes, at a macro-economic level, from leading to exaggerated drops in income and consumer demand. At the macro-economic level, large firms developed branding, and the use of large-scale advertising and marketing. And, indeed, for the largest firms, these methods went along with the development of extensive market research and demographic analysis, so that longer-term investment and production plans that determine output levels, were connected to long-term market research and marketing plans, so that future production would not grossly exceed the capacity of the market. The development of modern computing power, connected via the Internet, the ability to obtain actual consumer behaviour patterns in real-time, via EPOS systems, connected to the replacement of Fordist mass production with post-Fordist production models based upon flexible specialisation, together with the use of Just In Time production and stock control systems, have taken that to an even higher level than when Simon Clarke wrote, nearly thirty years ago,
“Indeed it would be fair to say that the sphere of planning in capitalism is much more extensive than it is in the command economies of the soviet bloc. The scope and scale of planning in giant corporations like Ford, Toyota, GEC or ICI dwarfs that of most, if not all, of the Soviet Ministries. The extent of co-ordination through cartels, trade associations, national governments and international organisations makes Gosplan look like an amateur in the planning game. The scale of the information flows which underpin the stock control and ordering of a single Western retail chain are probably greater than those which support the entire Soviet planning system.”
(Capital and Class, Winter 1990)
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