Debate Help

[phknrocket1k]

Me: <The watch&#39;s value is &#036;100 because that is how much labor was put into it--&#036;100 worth. >


Him: <ah, but its value is based on what people will pay for it. if the watch required &#036;100 of labor, but was ugly and did not tell time, its value would not be &#036;100 (since value implies that the object can be exchanged for something else and the process of labor cannot be undone for a refund of your &#036;100). also, there is no set value for a certain expenditure of energy or a certain effort. therefore, labor&#39;s value must be based on the value of the object produced. in my opinion, the marxists (and non-marxists who hold this view) have it backwards.>

Got any ideas or solutions?

[STI]

Him: <ah, but its value is based on what people will pay for it. if the watch required &#036;100 of labor, but was ugly and did not tell time, its value would not be &#036;100

This is a confusion of exchange-value and use-value. If a commodity has no use-value (it&#39;s ugly and didn&#39;t tell time, for example), it has no exchange-value. Only productive labour (labour which is involved in creating a use-value) produces exchange-value.


Also, there is no set value for a certain expenditure of energy or a certain effort

If it takes me 3 hours to make a widget, then the value of that widget is equal to the value of 3 wodgets which take 1 hour each for me to make (assuming the raw materials all have the same value).

Simply put, 3 hours&#39; labour has a value equal to 3 hours&#39; labour. All you can equate labour-value to is other commodities. So, then if 1 3-hour widget is worth &#036;30, that means that the gold involved in that &#036;30 took 3 hours to produce (from the mineral to the final product).


therefore, labor&#39;s value must be based on the value of the object produced.

Above, I explained how it&#39;s the other way around. All the end product (commodity) determines is whether or not the labour was "productive labour".


in my opinion, the marxists (and non-marxists who hold this view) have it backwards.>

To this, you should respond with,

"In my opinon, your FACE is backwards&#33;".

[ComradeRed]

Him: <ah, but its value is based on what people will pay for it. if the watch required &#036;100 of labor, but was ugly and did not tell time, its value would not be &#036;100 (since value implies that the object can be exchanged for something else and the process of labor cannot be undone for a refund of your &#036;100). also, there is no set value for a certain expenditure of energy or a certain effort. therefore, labor&#39;s value must be based on the value of the object produced. in my opinion, the marxists (and non-marxists who hold this view) have it backwards.> The problem is this argument rests on the thesis that utility equates to value. This is a rather vulgar thought, since utility is subjective (otherwise, we&#39;d be nothing more than clones of each other).

Further it isn&#39;t what people "will pay for it" because people have no choice in paying more or less for it. If you walk into a 7-11 and get a donut then initiate a "barter" you won&#39;t go anywhere, the donut is &#036;x. It won&#39;t change.

Of course, if no one buys it and sales drop, resulting in the company lowering prices. But this is not the same thing, it is a belated drop due to the lack of money in the hands of the purchasers (as opposed to an immediate drop in price due to barter exchange).

If whomever you are discussing this with tries to bring in supply and demand curves, ask him how does he measure demand curves? Then ask him, which (undoubtedly) he&#39;ll bring up, how can he measure marginal utility? Especially since utility is a subjective thing and marginal utility presupposes an objective measure.

Moreover, can&#39;t price (according to supply and demand) fall below the cost of production? What sense does this psychobabble of "willing to pay...if...aggregate demand" have to determining prices, which the businessman himself sets.

Why wouldn&#39;t it be set by the cost of production plus profit amount divided by number of commodities output? If this were true, labor is the pivot in determining value if it were true (which is logically is). So labor would be the determining factor in value, as opposed to an open/set market mechanism (err contradiction).

Hope it helps a little&#33;

[phknrocket1k]

<<<exchange value isn&#39;t exclusively produced by labor. for example, scarcity can affect the exchange value of something. if i find something very desireable lying on the ground, it was created by natural processes, and there is only one in the world, very little labor went into it (solely my effort of picking it up) but its exchange value will be great. also, how would the widget example account for the following situation? (apologies to murray rothbard for stealing his names.) mr. jones lives in ruritania. he owns a gold farm, where gold grows on trees. there is no gold in the rest of ruritania. mr. smith, who also lives in ruritania, wants to acquire gold for some use. mr smith wants the gold so much that he spends three hours building a wheelbarrow to exchange with mr. jones for gold. mr jones spends three minutes picking gold from his gold trees. therefore, mr.s jones and smith exchange goods with greatly different labor expenditures. however, because of the subjective value of each good, both sides feel they benifit from the exchange.>>>>


I&#39;m somewhat inclined to believe his response..

[ComradeRed]

Boy, now you got him just where you want him&#33;


exchange value isn&#39;t exclusively produced by labor. for example, scarcity can affect the exchange value of something. That directly affects how much labor is necessary to produce the product. As Marx said: The value of a commodity would therefore remain constant, if the labour time required for its production also remained constant. But the latter changes with every variation in the productiveness of labour. This productiveness is determined by various circumstances, amongst others, by the average amount of skill of the workmen, the state of science, and the degree of its practical application, the social organisation of production, the extent and capabilities of the means of production, and by physical conditions. For example, the same amount of labour in favourable seasons is embodied in 8 bushels of corn, and in unfavourable, only in four. The same labour extracts from rich mines more metal than from poor mines. Diamonds are of very rare occurrence on the earth’s surface, and hence their discovery costs, on an average, a great deal of labour time. Consequently much labour is represented in a small compass. Jacob doubts whether gold has ever been paid for at its full value. This applies still more to diamonds. According to Eschwege, the total produce of the Brazilian diamond mines for the eighty years, ending in 1823, had not realised the price of one-and-a-half years’ average produce of the sugar and coffee plantations of the same country, although the diamonds cost much more labour, and therefore represented more value. With richer mines, the same quantity of labour would embody itself in more diamonds, and their value would fall. If we could succeed at a small expenditure of labour, in converting carbon into diamonds, their value might fall below that of bricks. In general, the greater the productiveness of labour, the less is the labour time required for the production of an article, the less is the amount of labour crystallised in that article, and the less is its value; and vice versâ, the less the productiveness of labour, the greater is the labour time required for the production of an article, and the greater is its value. The value of a commodity, therefore, varies directly as the quantity, and inversely as the productiveness, of the labour incorporated in it.


however, because of the subjective value of each good, both sides feel they benifit from the exchange. From the viewpoint of utility (which modern vulgar economics takes the position of) both sides always gain from an exchange. But from the view of exchange value, the exchange is of equals. You don&#39;t trade &#036;5 for a car, you exchange several thousands. Utility is subjective, it determines the limit and willingness to pay for a commodity. The amount rendered is an objective definite quantity. I recommend you read: Chapter 2 of Das Kapital (http://www.marxists.org/archive/marx/works/1867-c1/ch02.htm)