[Marxism] law of value

[bhandari@xxxxxxxxxxxx]

An articulation of my understanding of the law of value; comments welcome.
Rakesh


With rising labor productivity, unit costs will tend to fall and in  and
through the resulting competition so will unit prices. Price becomes a
function of value.  Even Meghnad Desai is forced to concede  that as an
explanation of changing exchange ratios over time the law  of value is
remarkably robust.  It is an essentially dynamic law as  Karl Korsch long
ago recognized in his book Karl Marx.

What the law of value means in part is that once social labor
relations are mediated through commodities, society is quite limited  in
the extent to which it can interfere with prices as they remain a 
function of value. Such interference is not only likely to fail in the
long run due
to the likely growth of black markets, such intervention is also likely to
disrupt the achievement of
the proportional apportioning of social labor needed to maintain the 
division of labor through which society is reproduced. The prices of
reproducible commodities
have to  be set free, more or less, so as to be governed at least
tendentially by the law of value.

It is important to remember here that Marx is speaking only of
reproducible commodities (that is commodities whose supply can be
regulated by easy increases or decreases in present output through the
reallocation of aggregate social labor time), not any thing which takes
the commodity form--labor power, land or money for example.

The law of value is an obvious  requirement of social production in a
society in which the relations of social labor are mediated through
commodities produced by means of wage labor for private profit.  Marx
dismissed the need for any palaver about proving the law of value.  But
the law of value is in contradiction to the private profit seeking
character of general commodity production.

For Marx (as Evald Ilyenkov has argued) this was a real contradiction of
capitalist commodity
production. Capitalism contradicts itself. It is required to do
incompatible things. The question for Marx is how such contradictions  are
resolved. Marx's theory of price of production provides the answer to this
immanent contradiction.

Marx attempted to conceptualize the real contradictions of which
social forms are resolutions. That this was central to his method is as
clear as day
in the first part of Capital, volume I, Marx shows that the commodity is
both a use value
and exchange value and the states are incompatible. He then demonstrates how
the general value form is a resolution of the contradiction immanent to
the commodity

Marx writes in a passage on which there should be pedagogical focus:
"We saw in a former chapter that the exchange of commodities implies
contradictory and mutually exclusive conditions. The differentiation
of commodities into commodities and money does not sweep away these
inconsistencies, but develops a modus vivendi, a form in which they
can exist side by side. This is generally the way in which real
contradictions are reconciled. For instance, it is a contradiction to
depict one body as constantly falling towards another, and as, at the
same time, constantly flying away from it. The ellipse is a form of
motion which, while allowing this contradiction to go on, at the same
time reconciles it."

What Marx is saying about price of production in the third volume of Capital
could be summarized thusly: "We have seen that the supply price of
commodities is
influenced by contradictory and mutually exclusive conditions, the
law of value and the law of profit. The resultant modification of the
law of value into price of production does not sweep away these
inconsistencies, but develops a modus vivendi, a form in which they
can exist side by side."

When Bohm Bawerk accuses Marx of logical contradiction and Samuelson
says that prices of production for all practical purposes erases
value, they are both admitting that they cannot understand social
forms as the (temporary) reconciliation of real social contradiction.







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