Commodity Value

[DaComm]

I could use a bit of refreshment. I've been hearing all sorts of things lately, and I'm confused as to whether or not commodity value is determined by the amount of labor time it took to make that commodity, converted in money form. If so, how does this inter-twine with Marx's "added value" idea?

[mikelepore]

The value of the commodity is determined, not the amount of time it took to make the commodity, but the amount of time for making the commodity that is made necessary by the types of tools and methods that are typical in that society. The actual time, which may be more or less, doesn't matter.

The added value comes from the fact that workers sell their labor power (the ability to work for a time) on the labor market, which isn't the same thing as labor itself. Labor (actually performed) contributes more value to the product than the value of the labor power that the worker has sold.

[DaComm]

The value of the commodity is determined, not the amount of time it took to make the commodity, but the amount of time for making the commodity that is made necessary by the types of tools and methods that are typical in that society. The actual time, which may be more or less, doesn't matter.


Can you make an example?

[Kotze]

I'm confused as to whether or not commodity value is determined by the amount of labor time it took to make that commodityThe average amount. If a specific gold digger is particularly lucky or unlucky, he has to put more or less time into finding it than usual, but that doesn't affect its value. Prices are not equal to labour value every day either, they wiggle and jump around, but a tendency towards labour values is there.

[Adil3tr]

Can you make an example?

If you make a product, but you make 10 per day, you have to sell it at the same price as someone who make 100 a day, or you won't sell. That's market price. The "normal" price is what you have to sell at, how much time or effort means very little. This became important during the industrial revolution, when someone using a hand loom was working as hard as someone using a steam powered loom, but since the steam powered loom could make it cheaper, that became the new "normal" price. When I say normal, I mean the price based on socially acceptable labor time.

[DaComm]

If you make a product, but you make 10 per day, you have to sell it at the same price as someone who make 100 a day, or you won't sell. That's market price. The "normal" price is what you have to sell at, how much time or effort means very little. This became important during the industrial revolution, when someone using a hand loom was working as hard as someone using a steam powered loom, but since the steam powered loom could make it cheaper, that became the new "normal" price. When I say normal, I mean the price based on socially acceptable labor time.

So if not labor time per se, what is it that the value of the commodity reflects?

[Hit The North]

So if not labor time per se, what is it that the value of the commodity reflects?

It is the social average, which is determined by the level of technology. Marx calls this "socially necessary labour time". You can read about it here: http://en.wikipedia.org/wiki/Socially_necessary_labour_time

[DaComm]

It is the social average, which is determined by the level of technology. Marx calls this "socially necessary labour time". You can read about it here: http://en.wikipedia.org/wiki/Socially_necessary_labour_time

So instead of labor time it is the amount of labor?

[Hit The North]

So instead of labor time it is the amount of labor?

No. Why do you say that?

Have you read the article I linked to? There it states:


The simplest definition of socially necessary labour time is the amount of labour time performed by a worker of average skill and productivity, working with tools of the average productive potential, to produce a given commodity (http://en.wikipedia.org/wiki/Commodity_%28Marxism%29). This is an "average unit labour-cost", measured in working hours.

[DaComm]

No. Why do you say that?

Have you read the article I linked to? There it states:


My apologies for my mis-comprehension, but I still do not entirely get it.

[DaComm]

No. Why do you say that?

Have you read the article I linked to? There it states:

Well, yeah, I get it; average worker working with average technology at his disposal to make a commodity. BUT, how do we arrive at how the commodity is priced? It has no relation to labor time what-so-ever?

[mikelepore]

Can you make an example?

In 'Capital' chapter 1, Marx gave the example of a person who made cloth with a hand loom after the power loom had alreeady become available. Now that less labor is required per unit area of cloth, the value of the cloth has dropped. The person who used the hand loom couldn't recover the loss by charging a higher price.

The way I like to think of it myself with a close-to-home example is, suppose every pizza joint in town charges $12. But when you go to pick up your pizza the owner tells you that, today, they baked it using a fire ignited by rubbing two sticks together, and therefore, due to the extra labor, you will have to pay $50 for the pizza. You walk out without buying it. You tell the owner: if you used an obsolete method, that's your problem. The marketplace won't bear a price that compensates the seller for making the product with a method that isn't the latest available method.

[Hit The North]

Well, yeah, I get it; average worker working with average technology at his disposal to make a commodity. BUT, how do we arrive at how the commodity is priced? It has no relation to labor time what-so-ever?

Price and value isn't the same thing. However, prices tend to fluctuate around the axis of the value of a commodity, which is the amount of socially necessary labour time expended in its production.

[DaComm]

Price and value isn't the same thing. However, prices tend to fluctuate around the axis of the value of a commodity, which is the amount of socially necessary labour time expended in its production.


!!! I knew it!

[DaComm]

In 'Capital' chapter 1, Marx gave the example of a person who made cloth with a hand loom after the power loom had alreeady become available. Now that less labor is required per unit area of cloth, the value of the cloth has dropped. The person who used the hand loom couldn't recover the loss by charging a higher price.

The way I like to think of it myself with a close-to-home example is, suppose every pizza joint in town charges $12. But when you go to pick up your pizza the owner tells you that, today, they baked it using a fire ignited by rubbing two sticks together, and therefore, due to the extra labor, you will have to pay $50 for the pizza. You walk out without buying it. You tell the owner: if you used an obsolete method, that's your problem. The marketplace won't bear a price that compensates the seller for making the product with a method that isn't the latest available method.

Because in this case you will go somewhere where the pizza is sold for less at the S.N.L.T.