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Theories of Value

Letters: Correspondence

 Dear Sirs,

Could you please answer these questions below, in order to clear up a great deal of misunderstanding?

   1.When is the value of a commodity determined?
   2.Can additional value be added to the commodity in the process of distribution?
   3.Has distribution any determining factor in the value of a commodity?


Sid Felperin


REPLY:
 A commodity is a useful article produced for exchange. It is the result of the application of human energy to the material provided by nature. Its value {a social relation) depends upon the amount of labour required to reproduce such an article in a given society under certain given physical and social conditions.

Socialist Economics: 2 - Value

Articles are exchanged because they are different. This means that they possess a different kind of useful labour. It is the quality of the labour which makes them different. The labour of the bricklayer is different to that of the fitter, as is the labour of the pattern-maker to the coal miner’s. Consequently, the products are different. Identical goods or services are not exchanged for each other as there would be no useful purpose in doing this. Coal is not exchanged for coal. In a world of commodity production, this qualitative difference between definite types of useful labour develops into a complex system. A social division of labour. These useful forms of labour are carried on independently by individual producers working on their own account.

Cooking the Books: Value Creation and Extraction

Writing in the Guardian (19 January) in an article subtitled ‘Talk of a fairer capitalism is just hot air unless we rehabilitate and reward the idea of value creation,’ economics professor Mariana Mazzucato quoted Big Bill Haywood of the Western Federation of Miners and later the IWW as saying: ‘The barbarous gold barons do not find the gold, they do not mine the gold, they do not mill the gold, but by some weird alchemy all the gold belongs to them.’

She used this as an introduction to her case that capitalism today is more concerned with ‘value extraction’ than ‘value creation’ and that this needs to be corrected to avoid further financial crises. ‘Restraining the power of value extraction,’ she wrote, ‘requires a theory of value – an area once hotly discussed in economics, but no longer,’ and went on:

The source of value: Bourgeois and Socialist theories examined

The proofs adduced by Marx in support of his contention that the origin and rise of capital can be traced, distinctly and indisputably, to robbery, fraud and violence, form only a small part, and by no means the most important one, of his profound investigations into social wealth production. The portions of his work describing so lucidly the process of the reproduction and accumulation of capital are for the purposes of proletarian enlightenment of even greater value.

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