For Bailey, as with all subjectivists, there is only exchange-value. The value of any commodity is only how much of some other commodity will exchange for it. When this exchange relation takes on a general form, the value of a commodity is expressed as a price, i.e. the relationship of the commodity to money. But, it can also be expressed in a particular form, whereby the exchange relation is expressed in relation to some other commodity, e.g. the corn price, cotton price, and so on, of some other commodity. For modern gold bugs, who have a particular form of commodity fetish for the yellow metal, which they equate with real money, this kind of particular form of manifestation of exchange-value can often be seen today, as they offer up various measurements in accordance with a gold price, as opposed the the Dollar price, Sterling price etc., of commodities and assets. Given that the Dollar price of gold itself swings wildly from day to day, and week to week, the extent to which such a particular form of exchange-value of commodities is pretty useless can be seen. Since 2011, the Dollar price of gold has fallen from nearly $2,000 to around $1200, or around 40%. The value of gold certainly has not fallen by that much, in that time, whilst large amounts of additional Dollars have been printed, in the intervening period, which should have depreciated them rather than appreciated them. That illustrates the extent to which the $2000 price was simply an inflated, speculative price.
“The individual commodity as such cannot express general labour-time, or it can only express it in its equation with the commodity which constitutes money, in its money price. But then the value of commodity A is always expressed in a certain quantity of the use-value of the commodity which functions as money.” (p 139)
Because Bailey defines value only as exchange-value, as the proportional relation between which commodities exchange, he thereby prohibits any deeper investigation as to why this proportional relation exists in the first place. For Bailey, it is mere chance, kismet. At least the neoclassical economists attempted, if unsuccessfully, to pin down the basis of the proportional relationship to being subjective assessments of utility by individual consumers. Perhaps the closest approximation to Bailey, however, today, are the Neo-Austrian School of Von Mises, Hayek, and Rothbard et al, who forswear all of the attempts to explain consumer behaviour in terms of indifference curves, and so on, and instead, like Bailey, simply declare that “people act”.
Yet, it is often among followers of this school that we find the goldbugs, and indeed, as Mandel remarked, their economic theories are often drawn from the world of stock market speculation, amongst whose clientele they are most highly represented. The idea that there is no such thing as value, independent from exchange-value, therefore, sits ill with their practical application of their theory, when they offer up advice that gold is undervalued, or this or that company is overvalued. How is that possible if the only value is exchange-value, and the only exchange value is the current market price? This confusion and conflation of the terms value and exchange-value, is, however, also the basis of the error of those Marxists who believe that value, and the Law of Value, is something which only applies to commodity producing modes of production, or worse only to capitalism, rather than that, as Marx set out in his letter to Kugelmann, value and the law of value, simply assumes the form of exchange-value in these societies.
" It is self-evident that this necessity of the distribution of social labour in specific proportions is certainly not abolished by the specific form of social production; it can only change its form of manifestation. Natural laws cannot be abolished at all. The only thing that can change, under historically differing conditions, is the form in which those laws assert themselves. And the form in which this proportional distribution of labour asserts itself in a state of society in which the interconnection of social labour expresses itself as the private exchange of the individual products of labour, is precisely the exchange value of these products.”
(Marx - Letter to Kugelmann)
“The most superficial form of exchange-value, that is the quantitative relationship in which commodities exchange with one another, constitutes, according to Bailey, their value. The advance from the surface to the core of the problem is not permitted. He even forgets the simple consideration that if y yards of linen equal x lbs. of straw, this [implies] a parity between two unequal things—linen and straw—making them equal magnitudes. This existence of theirs as things that are equal must surely be different from their existence as straw and linen. It is not as straw and linen that they are equated, but as equivalents. The one side of the equation must, therefore, express the same value as the other. The value of straw and linen must, therefore, be neither straw nor linen, but something common to both and different from both commodities considered as straw and linen. What is it? He does not answer this question. Instead, he wanders off into all the categories of political economy in order to repeat the same monotonous litany over and over again, namely, that value is the exchange relation of commodities and consequently is not anything different from this relation.” (p 139-40)
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