How does the value of wine increase with age?

[Scrooge]

I don't think additional labor goes into aging the wine, it just sits idly in a cellar. I guess one could argue that additional labor goes into maintaining the cellar(?) I'm not sure how to answer the question using the Marxist LTV.

[Lyev]

There are several issues here which may be confusing you. Firstly, price is not the same as value; they are related but of course separate phenomenon. What you're thinking of is actually the price of a bottle of wine. The amount of labour-time spent in in the up-keep of the wine, in cleaning the cellar etc. is minimal so surely cannot be used as a consistent determinent of the wine's exchange value. Price is equal to the exchange value of a commodity as expressed in money, money being the universal commodity. If we presume that the primary determinent of value is indeed the socially necessary labour-time embodied in a commodity then I think you're right when you say the "value" of the wine does not increase as such. Similarly with diamonds, fine silks, luxury wood etc., there is actually a great deal of effort that goes into producing these commodities, in extracting them as natural resources. Same goes for the wine because (although I don't a great deal about the intricacies of wine production), I assume it would have picked by hand, grown organically, crushed by someone's feet and so forth which costs more than if it is commercially mass-produced using pesticides, chemicals and machinery, right?

There seems to be a similar problem which Marx addresses in the opening of Volume I of Capital, which is brought up frequently, that if the more time spent on producing a commodity means that it is worth more, then I can spend 500 hours baking a cake, no matter whether it is a masterpiece or disgusting and become a millionaire. This is as opposed to spending an hour making the cake as is normal for baking. I think that problem expresses roughly the same question of a confusion between price and value, and what is the distinction between them, and how do they relate to one another. Once we have established that price does not equate value and vice versa, and that no extra time can be properly said to have gone into the production/maintenance of the wine and its cellar (thereby increasing the value), we have to ask what it is exactly that increases the price.

I think that Marx concedes to some extent that supply and demand do indeed effect the price of a commodity. Generally, considering that the wine was probably rare and lucrative to start with, the supply will generally decrease as the years go by, as people sell the wine, drink the bottles, accidentally break them etc. The demand in relation to the amount of rare wine (amount = supply) will increase or stay the same. So, it is not the value of the wine that changes, but the price, which is also dependent on supply and demand. Marx says in Wage-Labour and Capital (http://www.marxists.org/archive/marx/works/1847/wage-labour/index.htm), which is an accessibly short paper covering this and related issues that competition between buyers, especially when supply is particularly low, is conducive to a rise in the price of the commodity in question. To rephrase, if supply is less than demand (scarce amount of rare wine in relation to many avid wine-collectors) then the competition will be calm between sellers and consequently far more fierce amongst buyers.

I think that covers everything? Maybe not, as I am just reading about these issues myself. I don't know a great deal about the theory of value (but this is not about that, primarily); it just so happens I have been studying the chapter of Wage-Labour and Capital on price and supply & demand. It is shame that Zero or Zanthorus are not around anymore as this kind of question is their forté! Edit: I also meant to say that you can't answer this using the labour theory of value because it doesn't come under the remit of Marx's value theory, seeing as (in my understanding) it is primarily not a question of value, but of price.

[Zealot]

As noted, 99% of old wines are expensive simply because of its rarity, not because its taste has changed. Even if it did taste better, that would mean the use-value has changed.

I'm a little unsure on that last point because I can't seem to find a place where Marx explicitly says that use-value can affect exchange-value. Can anyone clear that up?

[Dave B]

It is I think an interesting question that can be looked at on separate levels.

To dismiss the easy and trivial bits first.

There is the stuff about being reproducible and whether or not you need or should look at from the perspective of fine art and antiques etc.

Thus;


that the price of things…… which at least cannot be reproduced by labour, such as antiques and works of art by certain masters, etc., may be determined by many fortuitous combinations. In order to sell a thing, nothing more is required than its capacity to be monopolised and alienated.

http://www.marxists.org/archive/marx/works/1894-c3/ch37.htm


Thus if you do it falls outside the standard labour theory of value analysis or perhaps more accurately has a separate analysis or whatever.

However it is undoubtedly part of the capitalist mode of production to age wines (and Whiskies etc) and that increases their price.

Although storing or ageing these products does incur costs and can involve labour that isn’t the main reason why the ‘price goes up’.

It revolves around the average rate of profit and the influence of a high constant capital in increasing the price of a commodity above its ‘real’ value etc.

Thus if you are banging out wine, and just for arguments sake can produce a bottle in a week from raw material etc then you might find yourself in a position as below with regards your rate of profit P’;

P’ = S/(C +V)


Where S is your surplus value, C is your constant capital or raw material ie grape juice etc, and V is your variable capital or wages etc.


If we just plug in some numbers and let everything = 1000 hours

We have a rate of profit (per week) P’;

P’ = 1000/(1000 + 1000) = 1000/2000 = ½ or 50%

[At this point we need to bear in mind that as discussed all capitalist need to make the same or average rate of profit and that the prices of their products if necessary have to sell above or below their value to ensure this.]

If we look at another capitalist who is producing a different type of commodity ie aged wine of lets say 5 years or 250 weeks.

Then he is going to have extra constant capital; even in just grape juice locked up every week in his business of say;

250(weeks) X 1000

Which represents the 250,000 hours of raw material or 5 years worth of raw material ‘grape juice’ that is in various stages of ageing.

(Actually more correctly speaking, as it is now finished product, it has 750,000 hours of value or embodied labour as each 1000 hours of raw material ‘grape juice’ has an additional 2000 hours (s+v) added to it, but it is just the general idea that is important.

A weeks worth of production is worth 3000 = c + v +s )

But keeping it simple for the moment, if he sold the wine at its value he would make a profit P’;

P’ = 1000/ (250,000 + 1000)

Or about 0.4% or whatever less than the 50% of the new wine producer.

So he has to sell it at sufficiently above its value to make an average rate of profit.

If he doesn’t; he stops doing it and then demand exceeds supply and the price goes back up until it is worth while etc

[And conversely, according to the theory, other capitalist enterprises that have a below average amount of constant capital have to sell their products below its value.

Because if they sell at its value they make an above average rate of profit, new capitalist invest capital in the production of that commodity, expand production and supply above demand.

Driving down those prices back down again.]

In fact you can view the production of the wine and the ageing process as separate areas of capitalist production.

And one capitalist may buy 3000 hours worth of ‘new wine’ a week off the producer to age it for 5 years, or 250 weeks.

Which may involve a bit of added labour, which is split into wages and surplus value.

Lets say 40 hours a week instead of 2000.

Then his P’;

P’ = 20/ [750,000 + 20]


Thus the capitalist making the new wine has a;

P’ = 1000/(1000 + 1000)


And has ‘much’ variable capital (1000 hours) and ‘little’ constant capital (1000 hours) compared with the capitalist in the production of aged wine who has ‘little’ variable capital (20 hours) and much constant capital (750,000 hours).

Even though both must make the same rate of profit.

Karl was aware of the basic problem early on, Thus;


This law clearly contradicts all experience based on appearance. Everyone knows that a cotton spinner, who, reckoning the percentage on the whole of his applied capital, employs much constant and little variable capital, does not, on account of this, pocket less profit or surplus value than a baker, who relatively sets in motion much variable and little constant capital. For the solution of this apparent contradiction, many intermediate terms are as yet wanted,
http://www.marxists.org/archive/marx/works/1867-c1/ch11.htm



The short answer is the obvious one I suppose aged wine sells above its labour time value, the point being is that it is covered by the theory.

[Lucretia]

People seem to forget that Marx's application of the labour theory of value was never intended to explain the price of everything. It was intended to explain in a general and imperfect way the prices of capitalistically produced commodities. Therefore it cannot explain, for instance, the price the Mona Lisa might be sold for. Or that aging 300 year old bottle of wine in your uncle's cellar.

[Lyev]

As noted, 99% of old wines are expensive simply because of its rarity, not because its taste has changed. Even if it did taste better, that would mean the use-value has changed.I think that maybe you are confused between what exactly constitutes a use-value and exchange-value. The former is "qualitative" inasmuch as it satisfies some kind of material need or want of humans. We do not mean the subjective "quality" of the commodity; in this case, the wine's taste, colour, smell etc. Simply because the wine tastes "better" (for some it might taste worse because not everyone likes the same wines) does not mean its actual utility has changed. People still drink it regardless of its age. When I first got this laptop that I'm using it did not have such a tendency to crash all the time, or stall when I turn it on. I have had it for 3-4 years and it has changed in that its slower etc. but fundamentally it is the same regardless of how long I have owned it because I still use it for the same thing. The utility of a commodity is independent of the amount of labour required to appropriate its useful qualities. Further, Marx says that the use-value of a commodity is the "material depository" of its exchange-value. An exchange-value is quantitative because, for example, I can trade 4 chairs for 8 horse-shoes. Therefore the exchange-value of 4 horse-shoes equates to 2 chairs. In short, exchange-value is what a commodity is worth in the marketplace; as a product of generalised and "congealed" human-labour, in the abstract.


I'm a little unsure on that last point because I can't seem to find a place where Marx explicitly says that use-value can affect exchange-value. Can anyone clear that up?I think maybe that what you are looking for is something like this: We can have a use-value independent of an exchange-value, but clearly an exchange-value needs utility as well; otherwise you would have no reason to exchange it in the first place.

I'll also add to my original reply to the OP, I think that there has to be some amount of confluence between value and price. Otherwise we have to abandon Marx's theory of value, seeing as a notable argument against is the "transformation problem (http://en.wikipedia.org/wiki/Transformation_problem)", that value does not translate directly to prices. I simply wanted to add that in my original reply, I think I downplayed the significance of some kind of relationship between price and value. There is a quote from "Value, Price and Profit", which addresses the relationship between, value, price and the labour theory of value, and why the theory does not necessarily exclude any consideration of supply and demand:
It suffices to say that if supply and demand equilibrate each other, the market prices of commodities will correspond with their natural prices, that is to say, with their values as determined by the respective quantities of labor required for their production.Hope that helps

[Thirsty Crow]

T

There seems to be a similar problem which Marx addresses in the opening of Volume I of Capital, which is brought up frequently, that if the more time spent on producing a commodity means that it is worth more, then I can spend 500 hours baking a cake, no matter whether it is a masterpiece or disgusting and become a millionaire. This is as opposed to spending an hour making the cake as is normal for baking. I think that problem expresses roughly the same question of a confusion between price and value, and what is the distinction between them, and how do they relate to one another. Once we have established that price does not equate value and vice versa, and that no extra time can be properly said to have gone into the production/maintenance of the wine and its cellar (thereby increasing the value), we have to ask what it is exactly that increases the price.

Just to comment briefly on this false problem: it seems to me that it is not the case that this example represents a confusion between price and value.
In my opinion, this suggests a ridiculously low level of labour productivity, if the actual cake is average in size or in a way comparable to the average sized cake. (think about all of the giant food articles being produced for a kind of a social event)
In other words, the example indicates just how important is the concept of socially necessary labour time, as opposed to actual labour time.

[Lyev]

Just to comment briefly on this false problem: it seems to me that it is not the case that this example represents a confusion between price and value.
In my opinion, this suggests a ridiculously low level of labour productivity, if the actual cake is average in size or in a way comparable to the average sized cake. (think about all of the giant food articles being produced for a kind of a social event)
In other words, the example indicates just how important is the concept of socially necessary labour time, as opposed to actual labour time.I couldn't remember the exact example verbatim -- I think this cake example came up elsewhere. You're right though; it's not exactly an example that is wholly pertinent to the OP's query. I think what I had in mind, although it was a bit confused, is that if socially average labour-time constitutes a commodity's value, then you cannot justify selling a cake that took 500 hours to make when it is the same quality as one that took an hour to bake, because although their prices are potentially equal, the amount of labour embodied in them is not. Anyway, the quote I had in mind was:
Some people might think that if the value of a commodity is determined by the quantity of labour spent on it, the more idle and unskillful the labourer, the more valuable would his commodity be, because more time would be required in its production. The labour, however, that forms the substance of value, is homogeneous human labour, expenditure of one uniform labour-power. The total labour-power of society, which is embodied in the sum total of the values of all commodities produced by that society, counts here as one homogeneous mass of human labour-power, composed though it be of innumerable individual units. Each of these units is the same as any other, so far as it has the character of the average labour-power of society, and takes effect as such; that is, so far as it requires for producing a commodity, no more time than is needed on an average, no more time than is socially necessary. The labour-time socially necessary is that required to produce an article under the normal conditions of production, and with the average degree of skill and intensity prevalent at the time...We see then that that which determines the magnitude of the value of any article is the amount of labour socially necessary, or the labour-time socially necessary for its production.From Chapter 1 of Volume I of Capital. You're right that fundamentally it's an issue of socially necessary labour time.

[X5N]

Because the value of wine is dependent largely on rich wine snobs.

[#FF0000]

I don't think additional labor goes into aging the wine, it just sits idly in a cellar. I guess one could argue that additional labor goes into maintaining the cellar(?) I'm not sure how to answer the question using the Marxist LTV.

Value comes from nature as well as labor. Wine aging is a natural process.

[Decolonize The Left]

I don't think additional labor goes into aging the wine, it just sits idly in a cellar. I guess one could argue that additional labor goes into maintaining the cellar(?) I'm not sure how to answer the question using the Marxist LTV.

No. Wine does not "gain value" with age. Many wines are drank after just being bottled: Beaujolais, Chardonnay, Sauvignon Blanc, etc... Generally speaking, you drink white wines within 2-3 years of the bottled year (so if it says 2010 on the bottle, it's good to drink now, or until around 2015). You can, of course, age white wine for as long as you like, but it certainly doesn't increase it's value.

Red wine, on the other hand, is often believed to achieve a softer taste with time in the bottle. So with reds it doesn't have anything to do with "value" either but with personal taste. In fact, many people think that the notion of aging wines is silly - reds can be drank at any time, but generally you'd like to wait a couple years after the bottling date unless it's a specific variety like Beaujolais.

I have tasted 50-60 year old wines and they were terrible. I have also tasted wines which are 4 years old which are absolutely incredible. In short, it's all about preference. What matters most with wine is the temperature at which it's stored and that the cork remain moist while it is being stored. Everything else is personal.

- August

[28350]

Value comes from nature as well as labor. Wine aging is a natural process.

I believe there is a Marx quote about value coming from nature, or rather that it is instead the labor of human appropriation of nature. Does anyone know which one I'm talking about? Maybe I'm thinking of someone else.
EDIT:

Labor is not the source of all wealth. Nature is just as much a source of use values (and it is surely of such that material wealth consists!) as labor which is itself only the manifestation of a force of nature, human labor power.

So he is saying use-value comes from nature, but what about exchange-value?

[Thirsty Crow]

So he is saying use-value comes from nature, but what about exchange-value?
Exchange value is dependant on human labour, labour as labour, and not any specific, concrete labour. Commodities are exchanged without regard to their concrete differences which come off as a result of the difference in the kind of need they satisfy and the kind of labour they "demand", which means that there must be a "common denominator" of sorts, and Marxists think that this common denominator is in fact labour time, not concrete labour time, but socially necessary labour time, which also necessitates (within the confines of the capitalist mode of production) the existence of money as a universal commodity.

[Hiero]

People seem to forget that Marx's application of the labour theory of value was never intended to explain the price of everything. It was intended to explain in a general and imperfect way the prices of capitalistically produced commodities. Therefore it cannot explain, for instance, the price the Mona Lisa might be sold for. Or that aging 300 year old bottle of wine in your uncle's cellar.
Excactly. So we have to look at networks other then economic exchange. Humans have symbolic networks too, where objects gain symbolic value. Hence items became rare, priceless, gather more meaning then their intended labourer had in mind. Like antiques.


I have tasted 50-60 year old wines and they were terrible. I have also tasted wines which are 4 years old which are absolutely incredible. In short, it's all about preference. What matters most with wine is the temperature at which it's stored and that the cork remain moist while it is being stored. Everything else is personal.It is about class preferences. If you wanted to show refinement in taste you need to know which wines matter and which wines "taste" better. If you find 50-60 year old wines terrible then you probably don't belong to a class fraction where it matters what your opinion on wines are.

[u.s.red]

I don't think additional labor goes into aging the wine, it just sits idly in a cellar. I guess one could argue that additional labor goes into maintaining the cellar(?) I'm not sure how to answer the question using the Marxist LTV.

i would say first that wine is an agricultural product whose quality depends on a lot of factors, including where the grapes are grown, climate, rain, sun, weather , etc; also the skill of the wine growers.... it probably is impossible to tell beforehand how a wine will age. It has more in common with gambling or speculation than with commodity production. According to wiki wine growers in areas known for producing good wine can artifically restrict production to increase prices. also there is a lot of fraud in pricing wine.

I think it has a lot in common with horse racing. Each year hundreds of thousand of thoroughbreds are born; of those only a few thousand ever race; and of those only a few ever earn more than a few hundred thousand dollars.

I dont think Marx intended his labor theory of value to apply to gambling.

[Ocean Seal]

People seem to forget that Marx's application of the labour theory of value was never intended to explain the price of everything. It was intended to explain in a general and imperfect way the prices of capitalistically produced commodities. Therefore it cannot explain, for instance, the price the Mona Lisa might be sold for. Or that aging 300 year old bottle of wine in your uncle's cellar.

It was never intended to explain the price of anything. Merely the value of such things.

But yes the price of wine does go up with time because it is said to taste better with age and such is the fancy of connoisseurs.

[REVLEFT'S BIEGGST MATSER TROL]

Excactly. So we have to look at networks other then economic exchange. Humans have symbolic networks too, where objects gain symbolic value. Hence items became rare, priceless, gather more meaning then their intended labourer had in mind. Like antiques.

It is about class preferences. If you wanted to show refinement in taste you need to know which wines matter and which wines "taste" better. If you find 50-60 year old wines terrible then you probably don't belong to a class fraction where it matters what your opinion on wines are.

Taste in wine is not solely determined by people trying to seem of a certain class. Come the fuck on.

[Hiero]

Taste in wine is not solely determined by people trying to seem of a certain class. Come the fuck on.

In matters of taste, more than anywhere else, any determination is negation; and tastes are no doubt first and foremost distastes, disgust provoked by horror or visceral intolerance (‘sick-making’) of the taste of others (Bourdieu, 1984,p.49)



You're thinking of taste in a general sense and not as a sociological catergory. Taste is always about distance and group cohesion. People invest in their taste depending on class position or aspirations. Workers who come middle class in a professional sense may begin to distance themsevles from working class taste through accumulating new cultural practices and tastes. Taste does not just mean general sensations "hot, cold, salty, spicey" but social catergories of opposites rough/coarse- refined, cheap-expensive, tacky-classy, rare/unique-mass.

[Robespierre Richard]

To answer your question in terms of the labor theory of value, over time it takes a lot of labor to store something in a specially-built cellar, inspect it, and make sure that it is not stolen. Basically, the cost of people doing this limits the value that could be put into doing other things and so, being seen as socially necessary, it accumulates this value over other things.

[Hiero]

To answer your question in terms of the labor theory of value, over time it takes a lot of labor to store something in a specially-built cellar, inspect it, and make sure that it is not stolen. Basically, the cost of people doing this limits the value that could be put into doing other things and so, being seen as socially necessary, it accumulates this value over other things.

That would be a naive Marxist analysis because it does not address price.The value is created in the production process. Afterwards price increases as part of a social process, as a process of commodity fetishism that actually masks the the production process.

[Robespierre Richard]

That would be a naive Marxist analysis because it does not address price.The value is created in the production process. Afterwards price increases as part of a social process, as a process of commodity fetishism that actually masks the the production process.

It's not a Marxist analysis.

[Hiero]

It's not a Marxist analysis.

What is it?

[REVLEFT'S BIEGGST MATSER TROL]

In matters of taste, more than anywhere else, any determination is negation; and tastes are no doubt first and foremost distastes, disgust provoked by horror or visceral intolerance (‘sick-making’) of the taste of others (Bourdieu, 1984,p.49)



You're thinking of taste in a general sense and not as a sociological catergory. Taste is always about distance and group cohesion. People invest in their taste depending on class position or aspirations. Workers who come middle class in a professional sense may begin to distance themsevles from working class taste through accumulating new cultural practices and tastes. Taste does not just mean general sensations "hot, cold, salty, spicey" but social catergories of opposites rough/coarse- refined, cheap-expensive, tacky-classy, rare/unique-mass.



Well someones taking sociology.

Seriously though, taste in expensive wine is due to general sensations as well as a desire to seem refined.

[Robespierre Richard]

What is it?

An economic sketch of the solution along the lines of Capital, which is not considered a Marxist work by any means.

[Hiero]

Well someones taking sociology.

Don't be a prick.



Seriously though, taste in expensive wine is due to general sensations as well as a desire to seem refined.


It is not a desire. It's not a trick to apear refined It is an extension of a classed logic, a world view. It is the reification of classed structure, taste makes the class system appear natural.

[Scrooge]

Don't be a prick.



It is not a desire. It's not a trick to apear refined It is an extension of a classed logic, a world view. It is the reification of classed structure, taste makes the class system appear natural.Will you expand on this?

[Rafiq]

An economic sketch of the solution along the lines of Capital, which is not considered a Marxist work by any means.

Capital is not Marxist?

Oh, I see, you're one of those people who say that Marxism consists of young marx and old marx is not marxist