Asked & Answered
Marx says : “Commodities are sold at their real values.” Now that being so, why is it that in countries where the productivity of labour is high, gold has not so great a buying power as in countries where labour is not so productive ? Take America and England. America is the highest of all, I think, yet commodities exchange for more gold there than in England. This cannot be due to protection as Germany shows.
TOM GREW.
Marx says prices deviate from values for varying periods and various reasons.
Thus monopolies are often able to push up and hold up prices above values for a considerable time, while cutthroat competition will sometimes drive prices down below values.
The high stage of trust development in America is one of the factors behind the high prices ruling there.
But this statement needs an important qualification. Many factory products—where the productivity of labour-power is greatest—are cheaper there than here, and it is mostly in foodstuffs that the high prices reign.
The reason is not far to seek. Agriculture lags far behind manufacture in economic development. The soft soils suitable for agriculture do not lend themselves to the easy manipulation of ponderous machinery and prime movers, so that at present a limit in their application has been reached.
Moreover, the farmer if burdened with the monopolist charges of Railway and Elevator Companies, and this fact finds some reflection in higher prices. The result is to retard the spread of agriculture, so that it is not expanding, either extensively or intensively, at the same rate as the population. Hence the relative demand for the farmer’s products is increasing, adding another factor to those given above in maintaining high prices.
J. F.