commodities remix 2 of 2

[GalenAus]

I realise all this talk of exploitation but don't you think it is necessary for society to progress?

If we didn't have exploitation and live in an equal society we would still be hunter-gatherers.

Exploitation has allowed society to progress over that past 2000 years, and capitalism has allowed such a huge influx of innovations and rise in living standards with all the great technologies we have today like the internet, computers, phones.. Do you not agree? I'd love your thoughts on this.

[TheSophist2007]

your making the assumption capitalists don't do any work. But alot of them do, they build captial and their businesses and share the value of the capital with workers.The worker doesn't have a right to the capital that they did no create. However there is still the question of how it all began, how the pack of cards was dealt initially.

[brendanmcooney]

@TheSophist2007. capitalists can do work. but If they do they function as workers not as capitalists. This is given to us by the basic definition of the two classes: capitalists=those who own capital. workers=those who work.

[thedownloadz]

This is pretty good. I like how you ended by starting to get critical. I assume what you call bourgeois economics is pretty much the same as the current dominant "neo-classical economics"? Also, is there an order you recommend watching your videos, I've just started these 2 and I'll go down that playlist collection you have.

[brendanmcooney]

On my wordpress blog on the page called "kapitalism101" (kapitalism101.wordpress. com/about/ eliminate the space) I give a suggested order of watching.

Thanks for watching.

[prjctcivilian]

i dont think i understood this very wel... doesn't the free market also play a significant role in the value of commodity not purely labour. And is the value of a labourer not based upon supply vs demand in a capitalist society rather than what they can produce

[TheatetustheGreat]

Thank you, Brendan! This is damn good. Your videos, a couple of beers and some peanuts - the perfect Friday evening!

[binjahmon]

Labor is a component of value for sure, but you can't separate value from supply & demand. How else would you determine the RELATIVE value of different commodities. Labor deals with the INTRINSIC value of commodities, but the RELATIVE value will always be determined by supply and demand.

Even w/ central planning and rationing, black markets develop. Marxist philosophy adds an important perspective, but describing economics without supply/demand is like classical physics without gravity.

[brendanmcooney]

Actually just the opposite is the case. Supply and Demand cannot explain the relative value of commodities at all. S/D explains the way in which production and consumption balance each other via a price mechanism. But once balanced why do toothbrushes cost less than cars? Because they embody less labor, not because their supply is greater than their demand.

Furthermore, the LTV goes on to explain the origins of supply and demand by explaining the motions of capitalist accumulation and wages.

[binjahmon]

It is impossible to separate "value" from supply and demand. In the desert, water is valuable. If I have the right materials, I can build a condensation collector and sell the water it collects, day after day, with no extra labor on my part (other than the labor that went into the materials themselves and the assembly).

If everyone in a town has their own well, the water has almost no exchange value, EVEN THOUGH labor was expended manufacturing the pump and digging the well.

[brendanmcooney]

Yes it is impossible to separate exchange value from supply and demand. The labor theory of demand does not claim to do this. It addresses a problem ackowledged by all the classical economists: that once supply and demand balance out we still need a theory to explain the relative prices between commodities.

In terms of your water example: If you have monopoly on water production than you can sell it at monopoly prices- above water's value.

[brendanmcooney]

The LTV explains the value of freely reproducible commodities under conditions of capitalist commodity exchange. Barriers to this free reproducibility can cause price to diverge from value.

If everyone has the ability to make their own water then it is no longer a commodity and falls out of the realm of value theory. Labor creates value in commodity exchange. It is not an a-historic theory applying to all labor in all historical periods. It is a capitalist phenomenon.

[tessaril]

Great video as always.

[Faanat]

I still got one question: Where do you get this cartoons? lol

[jdcremin]

I've watched all your videos and one thing still doesn't make sense. Why/how does labor determine value? Labor on a pair of jeans is about the same as is material, yet prices vary depending on consumer perceptions of brand it seems.  The value appears to be determined by the consumer and not labor input.

[brendanmcooney]

There are lots of ways in which price diverges from value. In addition to the fad-pricing like you mention, monopoly also exerts a distorting influence on price. But isn't it true that when you see an overpriced pair of designer jeans you say "what a rip off!" This is because you intuitively understand that these jeans are priced above their value!

The LTV operates at a level that explains supply and demand in the first place. It also explains the need to influence consumer opinion.

[paulsonofabitch]

Brandon , say someone uses the right machinery and raw materials to produce products at the socially necessary labor time but without actually exploiting human labor. Would that produce more capital since they wouldnt pay workers etc. The argument is that the more labor power you exploit the more capital you gain. Can you explain? Would the value of the product drop and would that lower the rate of profit.

[brendanmcooney]

I think that in this example you are referring to, say, a self-employed person?-someone who owns their own means of production and doesn't hire wage laborers? Such a person doesn't produce any surplus value because all the profits of their work return directly to them.

2ndly, the more you exploit the more surplus value you gain which can be converted to capital if reinvested again in the circuit of capital. Some profits leave the circuit of capital for capitalists' personal consumption.

[brendanmcooney]

3rdly, The value of the product is always equal to the socially necessary labor time regardless if this labor is done by workers employed by a capitalist or self-employed persons.

[McOath]

Excellent vid, I am slightly concerned with the oversimplification of fuedalism, but there are of curse time constraints. As I'm sure you know the secular justification of fuedalism, and of government today is of course at it's core protection and order, from those foriegn barbarians, like the other fuedal lords, or these days, terrorists.

[brendanmcooney]

Knights and landlords did fulfill these social functions. But just because they served a function in maintaining the social order doesn't mean that they were contributing to the social product. Landlords were not a laboring class, so their relation to the social product was purely one of appropriation.

[paulsonofabitch]

Brandon you forgot a most important commodity, labor power. The value creating commodity that serves a purpose like any other commodity but the purpose of this commodity is simply to take other commodities and create more expensive commodities. The one bought and sold at the price it costs to sustain this commodity, i.e. labor power.

I want to add a line here on class. In order for their to be a rich class their needs to be poor one. In capitalism that means oppressing a population.

[yeahwotevaman]

I am familiar with LTV. The problem with it is that although no commodity can exist without the application of labour, labour itself has no inherent value. I could labour away digging holes in my back yard all day but unless that activity is subjectively regarded as useful to somebody else, then it has no value beyond it's utility for myself, the labourer.

[brendanmcooney]

Yes, labor has to be socially useful to have value. This is part of what "socially necessary labor time" describes. It is not the subjective usefulness to some other random person that gives it the value. It's the fact that it is a component of the total social labor. Obviously, to be part of this abstract social labor, it must be socially useful.

Nothing has any inherent value by itself. It must stand in a social relation of exchange to have value.

[yeahwotevaman]

Yes, I made that comment before watching the rest of the video. Bad habit.

Of course 'socially necessary labor time' is determined by market value. How this value would be dictated in a centralised command economy is realistically impossible. I think the social problem lies with what forms of property rights underlie the market system rather than the market system itself.

[brendanmcooney]

No, market value is determined by socially necessary labor time. If you say price determines value you end up with circular logic.

What does this have to do with central planning?

[yeahwotevaman]

A commodity's price (exchange value) generally reflects what people are prepared to pay for it. It has little to do with any objective measure of labour time invested. If demand for a commodity falls, price falls regardless of how much labour time went into producing it.

The only means of determining value outside of a market system is by controling production and distribution by some form of central planning. We already have a partial command economy with regards to some industries.

[brendanmcooney]

For a more full discussion of price and value see my video "what transformation problem?"

But why are people prepared to pay more for some commodities than others? What determines supply and demand?- the amount of wages paid to consumers and the amount of labor expended in production!

There is a difference between setting prices and determining values via the market. I don't understand how central planning or price setting has any bearing on this video.