Marx cites, dismissively, the comment of the author of the “Observations”,
““Value, or valeur in French, is not only used absolutely instead of relatively as a quality of things, but is even used by some […] as […] a measurable commodity, ‘Possessing a value’, ‘transferring a portion of value’” (a very important factor with regard to fixed capital), “‘the sum, or totality of values’ (valeurs), etc. I do not know what this means” (op. cit., p. 57).” (p 131)
Value expressed in money must always be a relative expression of value, precisely because money is a commodity, the general commodity, and so itself an expression of exchange-value.
“Our author has made it abundantly clear that he does “not know” this. This is shown by the kind of criticism which would like to talk out of existence the difficulties innate in the contradictory functions of things themselves, by declaring them to be the result of reflections or of conflicting definitions.” (p 132)
Marx cites further from the “Observations”, in this vein.
““‘The relative value of two things’ […] is open to two meanings: the rate at which two things exchange or would exchange with each other, or the comparative portions of a third for which each exchanges or would exchange” (op. cit., p. 53).” (p 132)
For subjectivists, there is no objective value. So, as is stated, here, whatever rate at which commodities exchange is automatically their value. One of the famous examples of this is the water diamond paradox, that I have discussed elsewhere. In it, the subjectivist argument is given in a hypothetical situation, whereby someone in possession of a diamond, having trudged through the desert, is prepared to exchange it for a glass of water, because, at that particular point, the water provides greater utility to them than the diamond. I have set out the fallacies in this example already. Marx, in describing the development of trade, and of the product into the commodity, along with value into exchange-value, noted that initial exchanges were based upon accident and chance rather than value. But, it is precisely the extension of trade, and the role of competition that brings to an end that situation, and particularly the role of merchants who have a vested interest in measuring values, in order to establish exchange-values, in order thereby to make profits.
“The rate at which two commodities exchange does not determine their value, but their value determines the rate at which they exchange. If value were nothing more than the quantity of commodities for which commodity A is accidentally exchanged, how is it possible to express the value of A in terms of commodity B, or C, etc.? Because then, since there is no immanent measure common to the two commodities, the value of A could not be expressed in terms of B before it had been exchanged against B.” (p 132)
As discussed earlier, the subjectivists have gone to great lengths to try to identify this third term, as nothing more than utility, and when, as with the utility of diamonds as opposed to water, total utility was shown to fail to explain exchange-values, a recourse to marginal utility was made. In other words, in terms of utility, water has far more, because it is necessary for life, and yet water has little or no exchange-value, whereas diamonds have a great deal of exchange-value. The subjectivists, therefore, responded that because water is in abundant supply, and people have a lot of it, that they already consume, each additional glass of water for them has very little utility. But, that is really to explain the low price of water by the low price of water. People only already consume a lot of water because its price is low, enabling them to buy and consume lots of it. Put another way, they could have lots of water, because the labour required to obtain it, is very low, whereas the labour required to obtain diamonds is very great. There is, in fact, lots of gold on Planet Earth, in sea water, but the labour require to extract it, is very considerable. There is thought to be an exo-planet where diamonds exist in profusion. It's not the abundance of these things that determines their price, and the extent to which they can then be owned, but the cost of producing them.
“Relative value means first of all magnitude of value in contradistinction to the quality of having value at all. For this reason, the latter is not something absolute. It means, secondly, the value of one commodity expressed in the use-value of another commodity. This is only a relative expression of its value, namely, in relation to the commodity in which it is expressed. The value of a pound of coffee is only relatively expressed in tea; to express it absolutely—even in a relative way, that is to say, not in regard to labour-time, but to other commodities—it ought to be expressed in an infinite series of equations with all other commodities. This would be an absolute expression of its relative value; its absolute expression would be its expression in terms of labour-time and this absolute expression would express it as something relative, but in the absolute relation, by which it is value.” (p 132-3)
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