Wage Price and Profit

[grove street]

I am currently reading Wage Price and Profit for the third time and has got me thinking about the ways Marx theories are relevant for today

I am writing this in concern of Marx's theory that a commodity is sold at its actual value or in other words the labour neccessary for its production

Marx claims that a commodity is not sold either below or above its actual value

"I repeat therofore that normal and average profits are made by selling commodities not above but at their real values'

Although this assertion is relevant for Marx"s time if we take into context our own material conditions we find that with the advancement in Capitalist propaganda through the means of advertising and other forms of marketing> Capitalists have been able to create false scarcity and in turn increase demand resulting in commodities being sold above their real value

By applying Dialectable Materialism to Marx"s theory I have come to the conclusion that under todays conditions the price of a commodity is not determined by its real value but by how well the Capitalist is able to conveince the consumer that they need that commodity

What are your thoughts?

[BobKKKindle$]

A further factor which contributed to the breakdown of the relationship between value and price is the concentration of capital. Although he recognized that the number of firms in a industry would decrease over time as a result of mergers, Marx based his economic theory on the assumption that firms operated under a system of perfect competition (a large number of firms producing the same product). In a monopolistic or oligarchical market, however, price is no longer equal to the amount of labor required to produce a commodity, as firms are able to impose a mark-up on their products in order to maximize profit margins. However, this accelerates the tendency towards crisis as a result of the divergence between workers' income and the price of goods – overproduction.

Advertising is actually a countervailing factor to the tendency of the rate of profit to fall over time, as advertising is part of section '3' of the economy along with military expenditure - that is, the section that does not include the production of commodities or the expansion of the means of production.

[Luís Henrique]

Originally posted by grove [email protected] 18, 2007 07:41 am
I am writing this in concern of Marx's theory that a commodity is sold at its actual value or in other words the labour neccessary for its production

Marx claims that a commodity is not sold either below or above its actual value
No, that's not what Marx claims:


"I repeat therofore that normal and average profits are made by selling commodities not above but at their real values'

He is clearly saying that normal and average profits are made by selling commodities at their real values; he's not denying that there may be abnormal profits, made by selling commodities either above or below their value.


Although this assertion is relevant for Marx"s time if we take into context our own material conditions we find that with the advancement in Capitalist propaganda through the means of advertising and other forms of marketing> Capitalists have been able to create false scarcity and in turn increase demand resulting in commodities being sold above their real value

What is "false scarcity"? How do we know if the lack of supply of some commodity is "true" or "false"?

If commodities are sold above their real value, they are also bought above their real value. Who buys commodities? In the end, there are three possibilities: workers buy commodities, capitalists buy commodities to use them in the productive process, and capitalists buy commodities for their leisure.

In the case workers buy commodities above their value, it is clear that their wages will now buy less commodities than before. And so, either they would be selling their labour force below its value (which means, in average, commodities are still being sold at their value), or the value or their labour force has been lowered.

In the case capitalists buy commodities above their value to use them in the productive process, then the commodities they produce have to become more expensive, since their investment has become bigger.

In the case of capitalists buy commodities for their leisure above their value (but since capitalists usually know the value of commodity, this doesn't seem too much probable), then they are perhaps fooling each others.

So, the only real possibility in which commodities in general are sold above their value, without this meaning a zero-sum game, is the situation in which the living standards of the working class are being pushed down - which doesn't seem consistent with your idea of superprofits via exacerbation of consumerism.


By applying Dialectable Materialism to Marx"s theory I have come to the conclusion that under todays conditions the price of a commodity is not determined by its real value but by how well the Capitalist is able to conveince the consumer that they need that commodity

I don't think you are applying dialectic materialism here. Rather, you are proposing an idealist theory, that prices have no correlation to a material basis, but instead are determined by the will of capitalists.

Luís Henrique

[grove street]

Thanks for your criticism>

I"m still trying to get my head around Wage Price and Profit but over all we can all agree that the main theme behind Wage Price and Profit is that workers should always push for a rise in wages whenever the opportunity arises in order to compensate during times of economic downfall and other scenarios that may result in a fall in wages>

"He must try to get a rise of wages in the one instance if only to compensate for a fall of wages in the other"