[OPE-L:5483] Re: Counteracting factors

From: charlie (charles1848@value.net)
Date: Wed May 02 2001 - 18:41:49 EDT

How does the labor theory of value sort out issues of oligopoly
pricing power? Jerry wrote:
Suppose that an oligopoly, as a result of advertising and
marketing, is able to charge working-class consumers a market
price three times greater than the value of those commodities.
Yes, this can happen, and there should be no controversy about
recognizing that it happens.

Jerry then asks:
...who pays the higher prices?  It is, in this instance, working-
class consumers, of course.
Yes. Price, however, is exchange value, not value. The working-
class consumers have no more value (received as money wages) to
give back to the capitalist class than they did prior to the
success of the marketing campaign.

Has the exchange value of money changed? Has the money wage
changed? Have the hours of labor performed by the working class
changed? If not, then the rate of exploitation and the mass of
surplus value have not changed.

Jerry goes on to speak of:
...redistribution of ... wealth from the working-class to one
segment of the capitalist class through exchange.
This is true, taking wealth to be use values, not value. In the
first instance, the result of the successful marketing campaign
is that the use values obtained by the working class shrink, in
this sense: they buy as much of the now triple-priced commodity
as before and buy fewer of some other commodities (from other
capitalists). Roughly speaking, this result is the obverse of the
fact that surplus value has been redistributed within the
capitalist class.

There is a class asymmetry here. On the capitalist side, capital
is value that expands, surplus value is a matter of value, and
"exploitation is the difference between the total value created
by abstract labor and the value laid out as variable capital. ...
On their side, the workers are well aware of how much stuff they
create, how much effort it takes them to do it, and how much they
consume. These facts hold regardless of whether the prices of
commodities are equal to their value..." (From Capitalism to
Equality, p. 101-2, Web URL below.)

This is only the first instance. Moving from the first instance
to a final result proceeds through workers' consciousness and
class struggle. Many similar phenomena of price -- the tripled
price of the oligopoly commodity at issue here, general
inflation, and the current price gouging for electricity and
natural gas in California -- affect the standard of living.
Workers know whether their wages have held up or not. As
individuals they may try to find a second job, or as a family the
spouse may re-enter the labor force, or sections of the working
class may put more energy into the class struggle. There is no
formula by which to calculate what happens in going from the
first instance to the final result.

Charles Andrews
Web site for my book is at http://www.LaborRepublic.org

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