Tuesday, 19 February 2019

Theories of Surplus Value, Part III, Chapter 20 - Part 60

The author of the “Observations” writes, 

““Value is a property of things, riches of men. Value, in this sense, necessarily implies exchange, riches do not” (loc. cit., p. 16).” (p 129) 

This is a clear expression of commodity fetishism, whereby what is actually a relationship between human beings, an exchange of labour, is converted into a property of things. And, in fact, the author, here, has things completely back to front. Riches are use values; they are the objects of our wants and desires, and the more of these things we have, the more we satisfy our wants and desires. Those use values are determined by their physical properties. The subjectivists of the neoclassical school would disagree with that statement, because, for them, the utility of any commodity is something individual, and personal, determined by the specific preferences of each consumer. Beauty is in the eye of the beholder. If a property of a piece of music is that it is pleasing to the ear, then for any particular piece of music that may indeed be one of its properties, for one listener, whilst, for another, it may be only a discordant noise. If a pleasing taste is a property of a particular food or beverage, that may be the perception of it by one consumer, but not of another. 

So, on this basis, Marx's comment, 

“A thing retains the same “properties” whether it be owned by A or by B.” (p 129) 

would be challenged by a neoclassical economist on the basis that what represents a utility for B does not for A, and it is only the perception, by the consumer, that is significant, in relation to the properties of use values. Indeed, it's only because the commodity represents greater utility for B than it does for A that an exchange is made possible. If A found the commodity provided them with as much utility as it provides for B, why would A give it up? They would only do so if B has something in their possession that offers greater utility to A than the commodity they already own. And, this is the argument that the neoclassical school put forward, as the basis of the exchange of commodities, i.e. it is precisely because consumers experience the utility of different products differently, that they are prepared to exchange one for another. 

But, Marx would not disagree with any of that. Of course, different people perceive the world in different ways. When someone perceives a leaf on a tree, and sees the colour green, it is not actually because the leaf contains the property “green”. The perception of green is down to the physical properties of the leaf, and how they reflect light, which is then conveyed to the viewer's eye, and is then converted, by the optic nerve, into electrochemical signals, which are then interpreted in the brain. And, some people will, for the same reason, perceive the greenness differently, just as some people will see some shades of green as blue etc. But, in fact, this actually illustrates Marx's point. However A perceives green compared to how B perceives it, it does not change the actual physical properties of the leaf itself. 

Nor would Marx disagree that it is because the commodity represents a use value/utility for the buyer, rather than the seller, that an exchange is made possible. On the contrary, Marx says, clearly, that what the seller gives up is a use value, which for them is not a use value, in order to obtain exchange value. The buyer gives up exchange-value, in order to obtain for them a use value. But, all this tells us is why exchange is possible. It tells us nothing about the rate of exchange of one commodity for another. The neoclassical economists would explain this again on the basis of utility, and the preferences of the parties to the exchange. But, as soon as we introduce the real world, and the fact that the commodities being exchanged have to be first produced, and that the exchange takes place within the context of large, liquid markets, the problem with that concept becomes apparent. If commodity A requires only 10 hours to produce, and B requires 20 hours to produce, then, if consumer preferences are such that 1A exchanges for 1B, the producers of A will make surplus profits, and capital will move into the production of A. The supply of A will rise, and of B will fall until the exchange relation between A and B removes the surplus profits, and that point will be where 2A exchange for 1B, i.e. where 20 hours of labour represented by 2A, exchanges for 20 hours of labour represented by 1B. The utility of a commodity only determines how much of it will be demanded by consumers, according to their preferences, at a given price, but it does not determine the value of the commodity, or, thereby, the rate at which it exchanges, its exchange-value, with other commodities. 

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