This price they obtain for their cloth has no relation to what it has cost them to produce it, because it will depend upon how much demand there is for it. As Marx puts it, in Theories of Surplus Value, Chapter 20,
“It is true that the man who buys has in his possession merely the converted form of a commodity—money—i.e., the commodity in the form of exchange-value, and he can act as a buyer only because he or others have earlier acted as sellers of commodities which now exist in the form of money. This, however, is no reason why he should reconvert his money into my commodity or why his need for my commodity should be determined by the quantity of it that I have produced. Insofar as he wants to buy my commodity, he may want either a smaller quantity than I supply, or the entire quantity, but below its value. His demand does not have to correspond to my supply any more than the quantity I supply and the value at which I supply it are identical.”
And, similarly, it has no relation to the value the weaver must buy, in order to meet their own consumption needs.
“To become use-values commodities must be altogether alienated; they must enter into the exchange process; exchange however is concerned merely with their aspect as exchange-values. Hence, only by being realized as exchange-values can they be realized as use-values.” (p 42-3)
The commodity is first of all a product, and, as use-value, it stands independent of all other use values. It is also the product of concrete, individual labour, not social labour. To begin with, then, it is not a bearer of exchange-value, but only individual value. It only becomes a bearer of exchange-value, and representative of universal labour, as a result of it entering the sphere of circulation. And, here, the individual value diverges from the social value, or market value, which forms the foundation of competition, as producers continually seek to reduce individual value below market value, to exchange less labour for more labour.
“... the commodity as it comes into being is only materialised individual labour-time of a specific kind, and not universal labour-time. The commodity is thus not immediately exchange-value, but has still to become exchange-value. To begin with, it can be materialisation of universal labour-time only when it represents a particular useful application of labour-time, that is a use-value. This is the material condition under which alone the labour-time contained in commodities is regarded as universal, social labour-time.” (p 43)
Marx makes the same point as made in Capital III, in respect of use-value and exchange-value, and the interaction of supply and demand. The exchange-value of commodities is a function of socially necessary labour, but what constitutes socially necessary labour is also a function of demand. No matter how much labour used in the production of a commodity, it will not be socially necessary unless there is demand for the given commodity. But, demand is always demand at a given price, and the price is always a function of value.
“One and the same relation must therefore be simultaneously a relation of essentially equal commodities which differ only in magnitude, i.e., a relation which expresses their equality as materialisations of universal labour-time, and at the same time it must be their relation as qualitatively different things, as distinct use-values for distinct needs, in short a relation which differentiates them as actual use-values But equality and inequality thus posited are mutually exclusive. The result is not simply a vicious circle of problems, where the solution of one problem presupposes the solution of the other, but a whole complex of contradictory premises, since the fulfilment of one condition depends directly upon the fulfilment of its opposite.” (p 44)
This has a number of components. Firstly, the individual labour contained in commodity A differs from that in A`...An, and each is subsumed within an average. The individual labour-time of those producers in excess of the average is not socially necessary, but cannot be discounted, as it takes part in the determination of the average. It is discounted, however, in terms of the inability of the given commodity owners to realise it as exchange-value. It is also discounted in conditions where supply exceeds demand. In those conditions, the market value itself falls, and it's then these commodity producers who are first to be driven out.
Secondly, the individual concrete labour of the weaver must be compared with that of the wine producer, when linen and wine, as commodities, are compared, in determining what, in each case, represents socially necessary labour. Finally, there is the question, as above, as to whether the given commodity represents use-value, i.e. whether there is demand for it.
“In the exchange process, the commodity as exchange-value must then become a universal equivalent, materialised general labour-time for all other commodities; it has thus no longer the limited function of a particular use-value, but is capable of being directly represented in all use-values as its equivalents. Every commodity however is the commodity which, as a result of the alienation of its particular use-value, must appear as the direct materialisation of universal labour-time. But on the other hand, only particular commodities, particular use-values embodying the labour of private individuals, confront one another in the exchange process. Universal labour-time itself is an abstraction which, as such, does not exist for commodities.” (p 45)
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