Friday 28 July 2023

Chapter 1 – A Scientific Discovery 1. The Opposition Between Use-Value and Exchange-Value - Part 6 of 7

The opposition and contradiction between supply and demand, set out by Proudhon, is false, Marx says. If we take barter, the supplier is also a demander, and vice versa. In a money economy, the supplier of commodities is a demander of money for them, and the demander of commodities a supplier of money, in exchange for them.

“Demand is at the same time a supply, supply is at the same time a demand. Thus M. Proudhon’s antithesis, in simply identifying supply and demand, the one with utility, the other with estimation, is based only on a futile abstraction.” (p 39)

And, Marx says, other economists, like Storch, reverse the categories' description used by Proudhon.

“According to him, needs are the things for which we feel the need; values are things to which we attribute value. Most things have value only because they satisfy needs engendered by estimation. The estimation of our needs may change; therefore the utility of things, which expresses only the relation of these things to our needs, may also change. Natural needs themselves are continually changing. Indeed, what could be more varied than the objects which form the staple food of different peoples!” (p 39)

So, the determination of exchange-value is not a consequence of a struggle between utility and estimation, but between – under barter – the values of the commodities being exchanged, or – under money economy – the value of the commodity being sold, and the value of the money commodity, as representative of all other commodities.

“In the final analysis, supply and demand bring together production and consumption, but production and consumption based on individual exchanges.

The product supplied is not useful in itself. It is the consumer who determines its utility. And even when its quality of being useful is admitted, it does not exclusively represent utility. In the course of production, it has been exchanged for all the costs of production, such as raw materials, wages of workers, etc., all of which are marketable values. The product, therefore, represents, in the eyes of the producer, a sum total of marketable values.” (p 40)

The producer of any commodity must buy other commodities, required for its production. For this reason alone, Proudhon's earlier comment about the producer having the power to reduce their expenses can be seen to be false, because the producer has no control over the value of these other commodities they must buy in order to produce. True, as buyer of these commodities, it may be said that they have free will to determine how much they are prepared to pay for them, but, in reality, if they are to continue their own production, they must pay whatever the current market price is for those commodities. But, even setting that aside, it assumes that these prices, in turn, are purely subjective, and free from any physical constraint on their production.

If we take labour-power, for example, the worker requires a physical minimum of use values for their own reproduction. It doesn't matter whether this labourer is a slave, peasant, member of a primitive commune, artisan or a wage-labourer. These use values require a given amount of labour for their production, and that amount is determined by the current level of social productivity, not subjective estimation of value. If a labourer requires a kilo of grain to reproduce their labour-power, for a day, but, given the level of social productivity, it requires 2 days labour to produce a kilo of grain, nothing can change that material reality – other than a rise in social productivity – and so it would be necessary to produce some other use value that could reproduce the labourer's labour-power that required less than a day for its production.

No amount of estimation of subjective value of grain at less than a day's labour could reduce its value. Only a change in material conditions, and increase in social productivity could bring that about. That is why The Law of Value operates as a driving force in bringing about such historical development.


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