Re: Value and profits

[Philip Ferguson <plf13@xxxxxxxxxxxxxxxxxxx>]

dlawbailey wrote:

>As far as I can see the source of profit is the capitalist buying his
>supplies in one market and selling his product into another.  It is the
>classic source of profit: inequality of information and liquidity.


So this is your profound explanation for the source of profits - buying
cheap and selling dearer?  This nonsense was knocked on the head by
*bourgeois economists* like Smith and Ricardo two centuries ago!!!  In
fact, the bourgeois economists who preceded them, the physiocrats, were
already trying to unocvoer the source of value and thus profit, having
noted the woefully inadequate explanation you profer.

Your view is the kind of view that made some sense back, prior to
capitalism.  Back when trade between Europe and Africa and Asia was a
source of wealth for merchants, because they actually could buy in one
market and sell in another, and what they were selling was exotic and rare
(eg spices).

However, once capitalism became the dominant mode opf production, serious
bourgeois economists like the pyhsiocrats and, especially the founders of
political economy (Smith and Ricardo) had to deal not merely with
*quantitative* questions but with the *qualitative* issue of *value*.  They
had to deal with questions such as, how is it that commodities can be
exchanged with each other in certain proportions?  In order for commodities
to do this, in fact in order for them to be measured against each other in
any way, they must have something in common.  What they have in common, as
Smith noted, is that they are all products of human labour.

The reason this does not matter if we are dealing with one person on a
desert island is because there are no commodities being exchanged (in fact
that person isn't produc9ng commodities).  A lone person on a desert island
is simply consuming his/her own product or a product of nature (in the case
of fruit, veg etc).

In capitalist society, however, most of what is produced  is produced for
the market.  So working out the relations between commodities, in
particular their values, became both possible and crucial.

Smith discovered the labour theory of value, which was then developed by
Ricardo, and taken over (and further developed) by Marx.  This pointed out
that in a society in which commodity production was dominant, commodities
exchanged according to their values.  The common factor to each commodity
which allowed this to take place was/is human labour, more specifically the
socially necessary human labour-power which goes into creating each
commodity.

All you are talking about is a form of pricing.  What you are unable to
explain is how pricing can exist in the first place, how commodities can
exchange in the first place.   The quantitative (price) can only exist
because there is an underlying qualitative (value) aspect.

However, you have demonstrated the vacuousness and superficiality of modern
bourgeois economics very well.

Philip Ferguson








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