Fine, I will respond to all of your nonsense, both comments, since this is just embarassing and you're clearly going off the top of your head.
>"The problem is that Marx was operating under a demonstrably incorrect theory of the source of value: a labor theory of value."
There cannot be an "incorrect theory of the source of value" because there is only 1 theory of the source of value. Marginal utility theory is not a value theory: "The shift from 'base number theory' to 'ordinal number theory' poses two problems for the value theory of marginal utility. First, it is actually an abandonment of the problem of measuring social wealth, that is, the abandonment of the 'value theory', therefore, the marginal utility theory is now only a price theory, but no longer a value theory, therefore, people say that modern Western economics is an economics without value theory." (https://wapescholar.pure.elsevier.com/zh/publications/the-union-of-labor-theory-of-value-and-marginal-utility-theory-of)
You either accept value theory or you don't. It's not a question of whether or not you believe there is a correct or incorrect value theory, but whether or not you even believe value is a thing or not. "Subjective theory of value" could only be a value theory if you had a way to quantify utility, which marginal utility theory explicitly tries to avoid, hence why you will not actually find anything about "subjective theory of value" in most modern neoclassical textbooks. It's not important or intrinsic to the theory at all, it's not even relevant.
>"I could spend 12 hours every day making bouquets of blades of grass, but this is useless to society because that I labored doesn't matter; what matters is that the marginal value of bouquets of grass over grass on a lawn is approximately zero. I have put nothing into society. (Edit: people have complained, correctly, that this doesn’t quite capture the use-value framework that Marx uses. But we can rescue the example simply by observing that grass bouquets do have very rare use-value"
The issue is not that you were mistaken for not accounting for the fluctuations in value. The issue is that you don't seem to realize that prices and value are social constructs. For labor to produce value it therefore must be social labor, it has to be produced explicitly to satisfy the desires of someone else in society.
I mean, you're absolutely correct saying if you produced something that has no social utility, then it won't take on a value. But Marx quite literally verbatim says the same thing: "Lastly nothing can have value, without being an object of utility. If the thing is useless, so is the labour contained in it; the labour does not count as labour, and therefore creates no value."
You seem to be under the false impression that Marxists believe that if you input labor into something, it just magically has value, and not that value is socially constructed, and not that there is actually a well-described mechanism which causes this relation to occur, specifically supply and demand + market competition.
I mean, I already go into detail in the article below on how supply and demand causes prices to "gravitate" towards their values, which is a phenomenon first described by Adam Smith and not Marx. --> https://taiyangyu.medium.com/the-value-of-a-commodity-9a72065dcce6
This mechanism requires market competition, which requires a market, which requires social utility. The claim that value requires social utility is not an abstract claim, it's because the very mechanism Smith described that causes prices to gravitate towards their values relies on competitive market mechanisms. Value and price are socially constructed in a market economy, by the interactions between people on the market. Obviously if you remove the market, you lose value and price. What is the price of a diamond on a deserted island? It is a meaningless question. It cannot have a value or a price if there is no one to buy it!
>”— on movie sets and for weddings themed a particular way, for instance — so it is not the case that grass bouquets have no use value at all ever. It’s just that I probably can’t find a use for my bouquets, and if I can it’s probably not a very important use, so I’ve provided not nothing but very little for society.”
Use-value is not the source of value, so the fact your bouquet doesn’t always have value, this is meaningless. It is only a necessary, qualitative requirement for value, but has no quantitative relationship with value.
Let’s say I want to go on a road trip. Because I want to go on a road trip, I will burn a quantity of gasoline. If I didn’t want to go on the trip, I would burn no gasoline. Does this mean, then, that from the amount of “desire” I have for the road trip, you can predict exactly the quantity of gasoline I will burn?
No, that’s silly. The quantity is determined by things like the length of the trip, the amount of traffic, the efficiency of my car, etc. The fact that my desire is an initial requirement to burn any gasoline at all does not, in any way, suggest that there is a quantitative relationship between how much I desire to go on the trip and how much gasoline I will burn.
Exchange-value requires social utility, but social utility has no quantitative relationship to exchange-value.
>”The tremendous wrongness of the conception of value lies behind most of the irrelevancy of Marxist thought. When you build a system on top of such flawed premises, it is hard to recover much of use, save perhaps some inspiration and interesting questions.”
Saying Marxism is built upon flawed premises is completely hilariously ironic. Try to convince me these premises point to anything real, go on! I’d love to see you try!
https://en.wikipedia.org/wiki/Indifference_curve#Assumptions_of_consumer_preference_theory
Oh, and when you’re done there, check out the premises listed here as well: https://www.scientificamerican.com/article/the-economist-has-no-clothes/
>”Stalin's embrace of Lysenkoism was because it was ideologically agreeable, in contrast to all scientific evidence, and caused one of the worst and most enduring blunders of intellectual and scientific pursuit in Russia.”
This is literally the “poisoning the well” logical fallacy. → https://en.wikipedia.org/wiki/Poisoning_the_well
The fact Stalin did something stupid and believed something stupid for bad reasons does not make his point I quoted incorrect. The argument stands on its own merit.
>”He first postulates that things have use-value”
You do not need to quote Marx saying things have use-value… c’mon dude.
>”Okay, there are occasional, rare uses for bouquets of grass: in some unusual flower arrangements (or greenery), for movie sets, and so on. So it does have some use-value. But the value is very context-specific.”
You say “some use-value,” as if use-value is quantifiable. It’s not. Even marginal utility theory does not try to quantify utility. It’s senseless.
>”We have w bouquets of grass equal to one quarter of wheat and all the other stuff. Here, Marx has jumped right to a stable, unchanging market.”
Obviously it presupposes the existence of a stable market because, again, value is socially constructed by a market, and so it does not come into existence until there is a competitive market in the first place.
You clearly suffer from having only skimmed the first few pages of Capital without ever reading the works it was based on. The actual mechanism that causes prices to gravitate to its value is explained in The Wealth of Nations and not in Capital. It is caused by supply and demand + market competition.
Again, go to my article on the subject. You need a stable competitive market of buyers and sellers for something to form a market price at all. If you remove this then obviously the law of value will not apply because this is the very mechanism which brings it into existence.
The law of value does not apply if there is a monopoly, it does not apply if a commodity cannot be easily reproduced, it does not apply in many cases, and the law of value is still only an aggregate tendency. As Smith states, markets “gravitate” towards value, but nothing is equal to value. A sudden and abrupt change in the market may cause prices and value to diverge for a significant period of time, but if those markets stabilize they will come back together.
But none of this is fairly interesting. If you wrote an entire book on disruptions to the market, and criticized capitalism from this angle, people can just turn around and say these are market disruptions, but capitalism that is not disrupted still works, and thus these issues are all external and not intrinsic to capitalism itself.
A much more interesting book would be one that assumes there are not major market disruptions and treats capitalism at its theoretical best, i.e. assumes a very highly competitive and stable market, which from Smith’s theory automatically follows that prices and value would converge consistently.
>”Markets aren't like that now. I don't think they were even like that then.”
I do agree with you, that markets aren’t fully stable, and have disruptions. But all these disruptions are external factors. Marxism is an overdeterminist theory, not a reductionist theory. You cannot have a reductionist theory in the social sciences, and any social science claiming to be reductionist–like neoclassical economics–is indeed a pseudoscience.
Particle physics is a reductionist theory. It can physically isolate variables, and thus “reduce” its understanding of nature down to the fewest possible variables, what physicists call the Standard Model.
Social sciences cannot do this, because it is impossible to isolate all variables. If you take a class in psychology, you never learn about a “standard model” of psychology, of the different “particles” that make up human thought. This is not a thing. You instead see studies with large sample sizes where clear aggregate trends emerge, but even these trends are not 100%. So the theories only identify certain major variables, but cannot explain the whole system. The system is not reducible down to a single variable, it is not determined by a single variable, it is overdetermined.
“To illustrate this Marxian notion of overdetermination, consider the occurrence of an economic recession. It is not presumed to follow from high interest rates or government spending or foreign trade or any restricted group of such factors. Rather, in this Marxian view, a recession is ‘caused’ not only by these but also by all other factors that exist in our world. Natural changes in climate and soil chemistry, political changes in voting and legal patterns, cultural changes in religious and sexual preferences-these and many other factors like them play roles in shaping-in influencing-the occurrence of a recession. For Marxian theory, none of these factors can be ruled out as causes-each in its particular way-of the recession. Indeed, the prefix ‘over-’ in the term ‘overdetermination’ is a way of signaling the reader that this event, a recession, is (over)determined by the influences emanating from all of these factors. If we decide to focus our attention on only some of the causes, that is no problem so long as we are aware of and explicit about the necessarily partial and incomplete analysis that results.” (Richard Wolff & Professor Stephen Resnick, Economics: Marxian versus Neoclassical)
Every social science is overdeterministic, none claim to have a “standard model” that can explain everything, except neoclassical economics, which is entirely reductionist. Yet, as I pointed out before listing the premises, its “reductionist” premises are complete nonsense, they clearly do not point to anything real and were never empirically verified. It is a pseudoscience in its entirety.
It’s not even possible to have a reductionist theory of social science, not just because we can’t isolate all the variables, but because one of the variables is the social structure itself. Economic systems are not static, as you said yourself, markets are constantly changing. So the past social structure influences the present social structure, and hence, it is impossible to attempt to explain the current social structure purely from an individual basis.
“The economic subject, in its actions, adapts itself to the given condition of the social phenomena; the latter impose barriers upon his individual motives, or, to use Sombart’s words, ‘limit them.’ This holds true not only of the ‘economic structure of society,’ i.e., of the production conditions, but also of the social-economic phenomena arising on the basis of a given structure. Thus, for example, the individual estimates of price always start with prices that have already been fixed; the desire to invest capital in a bank depends on the interest rate at the time; the investment of capital in this industry or that is determined by the profit yielded by the industry; the estimate of the value of a plot of land depends on its rent and on the rate of interest, etc. No doubt, individual motives have their ‘opposite effects’; but it must be emphasised that these motives from the start are permeated with a social content, and therefore no ‘social laws’ can be derived from the motives of the isolated subject.” (Nikolai Bukharin, Economic Theory of the Leisure Class)
>”But it is precisely this equal exchange value that Marx needs to rationalize labor as exactly that thing that remains when all actual uses are abstracted away”
The law of value is not something just philosophized, “rationalized,” into existence, it actually has a physical mechanism well explained by Adam Smith already.
>”So, there it is: the bouquets of grass are products of labor, just like everything else, and we're done with our equal value exchange. So, no, my criticism is directly on target.”
Wait… what? You ended your argument here? You didn’t even get to a point!
>”Marx's framework fails at the most basic task of an economic model, which is to understand why things cost something.”
Nah, it does a pretty good job at it. I’ve not even had to go to Marx in this conversation because your misunderstanding goes deeper than Marx, you don’t even understand Adam Smith. We need to grasp Smithian labor theory of value before you can possibly grasp Marxian.
>”It works only in very specialized circumstances of commodities where raw materials are in abundant supply and labor is limiting, everyone wants plenty of all of them, and the system is assumed to stay in balance without explaining how it stays in balance.”
Indeed, because Smith already explained this well. The actual mechanism that causes price to gravitate towards value is supply and demand + market competition. Which, again, I explain in detail in my article I linked already.
Obviously if you do not have the materials needed to reproduce a commodity, then it will fall under a monopoly by the few who do, and it will not be subject to market competition, so the law of value cannot possibly apply.
I’m not sure what you mean by “everyone wants plenty of all of them.” Of course something produced to sell on the market is done so because there is social demand. If suddenly a collapse in demand, of course this will cause a temporary divergence of price and value. In fact, labor theory of value would predict a sharp decline in price as the price would suddenly fall far below its value, since the supply would suddenly far exceed the demand.
However, as Smith points out, if this were the case, then it would be impossible for companies to continue producing the same amount of commodities, because the price would fall so low they would not be able to offset the cost of production of those commodities, and so they would go bankrupt. This bankruptcy will cause a fall in supply, which corresponds to an increase in price, and thus must necessarily continue until the price increases until it can offset the cost of production again.
So, you are right to suggest that prices and value fluctuate. This is why Smith said prices “gravitate” towards their value rather than being equal to it. In a competitive market economy, though, these fluctuations are inherently temporary, and the markets are always striving towards an equilibrium. Marx is not interested in looking at temporary market disruptions, since, again, anyone can just dismiss his arguments as not “inherent” problems of capitalism because they would be, by definition, disruptions, and thus external to markets themselves. Marx is only interested in looking at inherent problems of capitalism, which thus requires assuming there are no disruptions, that value and price are equal, that the economy is perfectly competitive, i.e., Marx argues from a basis where he assumes capitalism is “perfect” capitalism, that it has no flaws, and so any flaws he does find must necessarily be flaws inherent to capitalism that cannot be explained away as mere external factors or temporary disruptions.
“Supply and demand regulate nothing but the temporary fluctuations of market prices. They will explain to you why the market price of a commodity rises above or sinks below its value, but they can never account for the value itself. Suppose supply and demand to equilibrate, or, as the economists call it, to cover each other. Why, the very moment these opposite forces become equal they paralyze each other, and cease to work in the one or other direction. At the moment when supply and demand equilibrate each other, and therefore cease to act, the market price of a commodity coincides with its real value, with the standard price round which its market prices oscillate. In inquiring into the nature of that VALUE, we have therefore nothing at all to do with the temporary effects on market prices of supply and demand. The same holds true of wages and of the prices of all other commodities.” (Marx, Value, Price, and Profit)
Indeed, the fact that there are disruptions in the real world means Marx’s theory can never be 100% correct. But that’s precisely because Marxism is not a pseudoscience, unlike neoclassical economics. It does not claim to be a reductionist theory that can predict everything to absolute certainty, like neoclassical economics does, which ironically cannot predict anything.
Marxian political economy is following the same path of all other social sciences. It is providing a theory of single, major variables, which leads to testable predictions which have been empirically verified, but that these predictions only show up in large, aggregate datasets, and it says nothing on an individual basis. It is like the difference between climate and weather. It is too chaotic with too many variables to predict precisely.
But, hey, at least Marxian economics can make testable predictions about things like prices and profit rates. Neoclassical economics, which claims it can explain anything, ironically, has never explained anything at all. You people say LTV is bad because it is not good at price prediction, yet when has marginal utility theory ever once in human history predicted a single absolute price? Again, at least LTV can make statements about overall aggregate trends in absolute price. Marginal utility theory can say literally nothing about absolute price. But that’s why you people love it, because it can predict everything, and thus is, by definition, unfalsfiable.
>”He concludes with a crystal-clear statement which leaves no doubt that the theory is stating exactly this wrong, grass-defeated theory of value”
Dude, you’re embarrassing yourself.
>”That which determines the magnitude of the value of any article is only the amount of socially necessary labor, or the labor time socially necessary for its production."
You quote this from Marx, in case you don’t understand, again, value and price are not equal. Value is something price gravitates towards due to the mechanism of the laws of supply and demand + market competition.
>”And, though I haven't had time to read the entire Das Kapital over again word-for-word”
You never read it the first time, and most of this stuff we’re still in the basics, again, we’ve not even left Smith yet, and the brief time I’ve mentioned Marx’s Capital has been a quote I provided from the first section of the first chapter.
You do not need to pretend to read Capital again (nobody who has actually read it calls it “Das Kapital”). You don’t even get the basics, you need to go back to Smith and read him first.
>”I've skimmed every relevant section of Volume I (and read the majority of the first two sections--and no, the exchange chapter doesn't fix the grass bouquet issue; it simply declares that things have use-value or not”
I mean, yes? Things have social utility or they don’t.
>”So, there we have it, direct from Marx. I'd forgotten the details, yes, but the conclusion is the same: this is useless in answering almost any economic question except in the most contrived and constrained situations (i.e. top-down mandates for exactly the right proportions of items of use-value so the uses can be actualize”
Marxian political economy has nothing to do with “top-down mandates.” It’s about free market mechanisms.
>”performed by workers of equal skill and training”
Yawn. You bore me. Again, not even Marx, but Smith! You think the whole “workers have different skills!” nonsense is somehow an argument against Marx, when Smith already addressed this in detail.
“When any expensive machine is erected, the extraordinary work to be performed by it before it is worn out, it must be expected, will replace the capital laid out upon it, with at least the ordinary profits. A man educated at the expense of much labour and time to any of those employments which require extraordinary dexterity and skill, may be compared to one of those expensive machines. The work which he learns to perform, it must be expected, over and above the usual wages of common labour, will replace to him the whole expense of his education, with at least the ordinary profits of an equally valuable capital. It must do this, too, in a reasonable time, regard being had to the very uncertain duration of human life, in the same manner as to the more certain duration of the machine. The difference between the wages of skilled labour and those of common labour is founded upon this principle.” (Smith, The Wealth of Nations)
>”in a society and economy in steady-state such that changing value can be neglected”
Perfect competition is indeed an assumption. But this is really a useless point, because you cannot predict disruptions. There is nothing in neoclassical economics that can account for disruptions. If I drop a nuke on a country, its GDP will likely plummet. Can you show me where in neoclassical economics it is capable of predicting the future and predicting this GDP plummeting before it happens?
Yes, Marx’s analysis assumes there are not market disruptions, because he is not interested, as he says explicitly in Value, Price, and Profit, in analyzing disruptions, but the effect of value. Marxism, again, an overdeterministic theory, it does claim, nor ever purports to claim, to predict everything, and to have accounted for every variable, unlike the pseudoscience of neoclassical economics. It is well aware that it is only explaining a single variable, and that in the real world, price will never equal value because of other variables and disruptions. But this does not mean that price and value relationships cannot be empirically demonstrated, as this is an aggregate trend that will appear over large datasets.
>”In particular, it cannot explain why, given that a few people actually do want bouquets of grass, grass-bouquet-making is not an advisable way for very many people to spend their time”
Because, you know, Smith already explained this, like, at the beginning of The Wealth of Nations. Enterprises can only focus on producing a particular commodity, i.e. there can only be a division of labor, if there is a wide enough market to support it. As Smith explained, if you are in a small community who needs a commodity, let’s say, chairs, and you make a few chairs, you will have already fulfilled the entire demand of that society, and thus will be forced to make something else. To “dedicate your life” to chair making, you must have a wide enough market so that you can continue producing chairs, which is why capitalism first developed in cities and cities first developed on the coasts, where there is global market access.
If you have a particular commodity which does not have a wide enough market to continually reproduce it, it cannot even, by its very nature, be subject to market competition, because there can be no market for it. So, by logical necessity, the very mechanism which the law of value presupposes cannot apply.
Given that the literal mechanism that causes prices to gravitate towards their values is supply and demand + market competition, it is incredibly idiotic to provide examples of commodities without market competition and then ask why prices don’t gravitate towards their values. It is like if I said, “if you drop a ball, it will fall,” and then you responded, “but I’m not dropping the ball, and it’s not falling! So you’re wrong!” Like, no, that only proves me right.
>”and why appropriately the price of grass bouquets will decrease if too many people decide it is their life's calling”
Because of… supply and demand? Ever heard of it? It’s like, the literal foundations of labor theory of value? Do I need to quote Smith again? C’mon man. We cannot even bother with Marx until you can at least get Smith right. Your understanding of LTV is just so far off you don’t even have the most basics down.
Read Smith, you only need to read the first book, but I think the first three are all worth a read. Then read Marx.
