Re: [OPE] Brecht and value-form theory

From: Alejandro Agafonow <>
Date: Sat Mar 21 2009 - 17:58:15 EDT

Jurriaan.   Below you can find some key quotations which prove that Marx and Engels thought indeed that capitalist economy was "governed" or "ruled" by the law of value.   (A) Karl Marx: «If demand and supply balance, the oscillation of prices ceases, all other conditions remaining the same. But then demand and supply also cease to explain anything. The price of labour, at the moment when demand and supply are in equilibrium, is its natural price, determined independently of the relation of demand and supply. And how this price is determined is just the question.» (Capital, Vol. I, Marxist Internet Archive).     (B) Karl Marx: «Competition carries into effect the law according to which the relative value of a product is determined by the labor time needed to produce it. Labor time serving as the measure of marketable value becomes in this way the law of the continual depreciation of labor.» (Marx: The Poverty of Philosphy, Ch. 1.2)     (C) Karl Marx: «The continual depreciation of labor is only one side, one consequence of the evaluation of commodities by labor time. The excessive raising of prices, overproduction and many other features of industrial anarchy have their explanation in this mode of evaluation.» (Marx: The Poverty of Philosphy, Ch. 1.2)     (D) Frederick Engels: «In present-day capitalist society […] demand is finally satisfied in one way or another, good or bad, and, taken as a whole, production is ultimately geared towards the objects required. How is this evening-out of the contradiction effected? By competition. And how does competition bring about this solution? Simply by depreciating below their labour value those commodities which by their kind or amount are useless for immediate social requirements […]»(Engels: The Poverty of Philosophy, Preface to the First German Edition)     Regards,A. Agafonow ________________________________ De: Jurriaan Bendien <> Para: Outline on Political Economy mailing list <> Enviado: sábado, 21 de marzo, 2009 11:22:22 Asunto: [OPE] Brecht and value-form theory Alejandro,   It is true that Marx does not explicitly talk so much about the social utility of market signals that such-and-such labor efforts are unnecessary relative to demand, because the products of that market activity cannot be sold, or cannot be sold at the expected price.   But he does talk very explicitly about supply and demand "adjusting" to each other. This is not "market balance" or "general equilibrium" in the sense of the vulgar Marxists and Neoclassicals (insofar as we could specify that balance in a neutral and objective way) but a retrospective, imperfect and continual adjustment.   That is, in Marx's own theory, supply and demand adjust to each other continually irrespective of whether this leads to balance being achieved, or not. But Marxists do not understand this theoretical point yet, because their thinking is shrouded in ideology. They think that if the adjustment occurs, this must logically always be towards general equilibrium.   The theoretical point to be made here is that human needs and the activities required to satisfy them will adjust to each other in any type of society, with intermediation by markets, or without markets altogether, or through a combination of both.   It is just that the market ideologists find it very difficult to understand how any society could function without market exchange, and thus they "impute" the existence of a market, even if there is none because trade is absent. I will try to describe this in a future article, in which I explain what markets are.   The "market socialists" are full of enthusiasm about the marvellous properties of markets, but they do not really understand much about how real markets function, and the many different kinds of markets there are. Consequently they do not provide very much information which is practically useful, beyond market regulationism. The real dispute in this sense has nothing much to do with markets per se, but with the conditions and preconditions of trade.   The debate about socialist economics is held back by the fact that 90% of economics is based on "idealized assumptions and stylized facts" about economic life. Economics attempts to depict market exchange as a rational process which obeys a logic which they claim to discover, and thereby to rationalize the existence of markets with a functional explanation such that, if markets weren't efficient, they would not exist.   This has a superficial plausibility but unfortunately for a real thinker this kind of thing won't wash, because the very way in which markets are described, is in good part ideological. Among other things, the efficiency of human action, human relations and human work is suddenly ascribed to market exchange (cf. vulgar Marxist value-form theory) as if it inheres in market exchange (the reification of political economy) - "the market knows best" until the market collapses and people are ruined, but the point is that markets are not entities which can "know" anything, that is a reification (in fact I think I will title my article "the economics of innocent markets").   Jurriaan

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