Third Chapter of Das Kapital

[Questionable]

In the first section of chapter 3 of Capital, that is, "The Measure of Value," Marx spends a lot of time talking about the difference between money as a measure of value and price.

I understand the later sections of the book when he begins talking about the circulation of money, but the part where he talks about money as value and price confuses me. Can someone here elucidate the text for me?

[RedMaterialist]

In the first section of chapter 3 of Capital, that is, "The Measure of Value," Marx spends a lot of time talking about the difference between money as a measure of value and price.

I understand the later sections of the book when he begins talking about the circulation of money, but the part where he talks about money as value and price confuses me. Can someone here elucidate the text for me?

Well, in my reading, Marx is saying that money is a commodity (for Marx, gold) and like all commodities its value is derived from the labor necessary to produce it. But since money-gold is the one commodity which can express (or, best expresses) the values of all other commodities, it therefore serves as a universal measure of value. Other commodities have been used as money: cattle, beads, even humans as slaves. But gold turns out to have been the best, at least until about 1970.

The value of each commodity is contained in the commodity, but it is invisible. The owner of the commodity must put a tag (a price tag) on each commodity so that they can speak their values. This expression, this speaking, is the money-expression of value, or, price.

This is why price is determined or fixed before a commodity goes on the market. The price may later vary with supply and demand, but its true value-price is fixed when the commodity comes off the production line (regardless whether it is a thing or a service. The value, however, can fall due to competition or use of machinery or other processes to produce the commodity more cheaply.)

The idea that price and value are fixed before a commodity goes on the market is absolutely at odds with all 20th and 21st century modern economics, which hold that price and value can only be determined through the operation of buying and selling (the theory of marginal utility, monetarism, austrian school, etc.) It is as if 90% of 20th and 21st century astrophysicists believed that the sun revolves around the earth.

One day they will all wake up and realize Marx (and Adam Smith and David Ricardo) were right.