[OPE-L:4706] Re: value vs potential value

Paul Cockshot (wpc@cs.strath.ac.uk)
Thu, 10 Apr 1997 02:09:43 -0700 (PDT)

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> > [...] If I produce a hat, which I think is worth 5
> > units, but after the sale I realize that it is only worth 4, the value
> > does not change after the sale;
> You *estimate* that the (individual) value of your hat is worth 5 "units"
> (of what?). You can not *know* what the value of the hat is after
> production but prior to exchange. The "value" that you attach to the hat
> is an "ideal value", yet the "real/actual value" may be less than what
> anticipated. In that case, the reality of the market shatters and
> mocks your estimates.

This only shows that the price has fallen below its value. The value of the
commodity prior to sale does not of course depend upon the subjective
estimate of the seller. If the seller knew that its value was 5hours, this
only be because they had done the necessary calculations of embodied labour
time. This is unlikely to be done by a firm today in explicit terms, but it
is not in principle impossible. Thus although most people do not know
the value of what they are selling they could know it.

To know the value of a commodity would be to have computed the mean
time necessary to produce it. If the commodity then sold for significantly
less that an amount of money equal to the MEL x its value, then the price
is below its value. Such a price would in the long run be unsustainable
there were special circumstances applying - for example subsidies to the
producers, or an especially low capital labour