 So when he invited me, Kiri had made the terrible mistake of saying I could talk about whatever I wanted to, which is why you get the topic today. And I was working on this even last night, so I'm actually going to read it, even though I realize that's maybe not terribly lively. The chattering classes of all nations are telling us that the U.S. and China now face each other as rivals. Economic rivals, cultural rivals, systemic rivals. The U.S. system we know well. It is the market system, a very Eden of the innate rights of man, where alone rule freedom, equality, property, and bentham, in the words of Marx. But what is the Chinese system? There can be little doubt that if you were alive today, Karl Marx would see in contemporary China things meeting with his disapproval. Nonetheless, from the name of China's ruling party, we expect that his teachings have more purchase on thinking in Chinese official circles than do his teachings in the U.S. Neoclassical economics serves the U.S. state as court astrologers. Chinese politicians are more eclectic. Although they likewise take advice from neoclassical economists, they also lend their ears to Marxist economists, even American Marxist economists. Today, when stagflation is back, when climate catastrophe looms, and when global politics is becoming again legible as a Cold War between a nominally capitalist and nominally communist power, is a good time to remind ourselves what points of economic theory capitalists and communists in fact disagree on. Now it's not the occasion to summarize competing schools of thoughts in economics. I limit myself to mentioning the names of a few, and then some just very overview comments. So neoclassical economics we can call supply side, Keynesian economics demand side, and Marxian economics profit side. So the neoclassical school believes it is supply that constrains the socioeconomic possibility space, whereas for the Keynesians it's effective demand, and for Marxists it's the profit motive that regulates what is feasible in a capitalist economy. I find the Marxist perspective persuasive for two reasons. One, Marxist economics explains the stability of long-term relative prices, which to my knowledge neither neoclassical nor economic economists attempt, and two, Marxist economics explains the limits of Keynesian stimulus, limits witnessed in the stagflation crisis of the 1970s. The Keynesian economists were famously dumbfounded by this crisis, and the neoclassical economists explained the failure of Keynesianism but only crudely with the claim that all unemployment is voluntary. I here set aside these advantages of Marxist economics, and instead focus on its reported Achilles' heel. According to its critics, the weakness of Marxian economics is the labor theory of value, and as such I take a moment to explain this theory. So the first section of the paper is the labor theory of value. In a competitive capitalist economy there are forces that drive wages to be equal among workers of the same skill, and forces that drive prices to be equal across commodities belonging to the same class and the same quality. On the one hand, if workers find that they are underpaid by their employer relative to the options that are available to them, elsewhere they will seek to move to a different firm. On the other hand, if consumers find that by going to a shop two doors down from where they usually get something, they're able to purchase it for less than they're used to paying, then they will start shopping at the cheaper shop. This flexibility in the labor market drives employers to offer similar wages, and the flexibility in the commodity market drives merchants to charge similar prices for similar wares. These forces are known as the law of one wage and the law of one price. These two laws, which are assented to by neoclassical economists, are together sufficient to motivate the labor theory of value. So that's where I go next. So suppose I am feeling hungry and find myself in front of a café. What constrains my willingness to pay for a sandwich? On the one hand, I will not pay more for the sandwich than it would have cost me to purchase all of the ingredients myself, and then to prepare the sandwich if I were being remunerated at my normal hourly rate. No one except Elon Musk or Jeff Bezos will pay 500 euros for a sandwich. On the other hand, even if the café somehow was lucky enough to just be given all of its ingredients, they would not charge any less for the sandwich than the cost and wages of the employee who makes it. So to the extent that there is a competitive labor market, the upward pressure of the sandwich maker's unit wage and the downward pressure of my unit wage converge at the price of the sandwich. So now we look at how these constraints on producers and consumers act for commodities that require different labor inputs. Suppose that a certain sandwich takes 15 minutes of labor time to make and that a certain cake takes instead an hour of labor time to make. So the price of the sandwich cannot be lower than 15 minutes worth of the sandwich maker's wages and cannot be higher than the cost of the ingredients plus 15 minutes of the consumer's wage. Similarly, the price of the cake cannot be lower than one hour's worth of the cake maker's wage and cannot be higher than the cost of ingredients plus the wages of one hour of the consumer's. So to state this more succinctly, if a cake takes four times as much time to make than a particular sandwich does, we expect the cake to cost around four times as much as the sandwich. The relative price of the commodity is governed by the labor times used to produce them. That's the kind of short version of the labor theory value. And then if you're worried about this trick I did with the ingredients costs, so because we've so far been exploring the lowest possible price that a commodity could be produced for and the highest possible price that a consumer might be willing to pay for it, I have assumed that the producer of the sandwich doesn't have to cover materials costs but that the consumer would have to. But by applying the same logic to the components of the sandwich, including that assumption, we're able to then get rid of the assumption. So just imagine jam, for example, which could be an ingredient to a cake and to a sandwich. Well, the jam won't be produced for anything less than the wages of the workers who made the jam and won't be bought for anything more than the materials costs, plus the equivalent of time of the wages of the consumer. And then you can go backwards and do the same operation to the fruit that went into the jam and so on. And then basically get rid of the input costs altogether and replace them with the same argument in terms of labor time. So this gives us the result that commodity prices are accounted for by vertically integrated labor time, the vertically integrated labor time embodied in the commodity. And this is the labor theory value as presented by Adam Smith. But now we turn from Adam Smith's version to Karl Marx's version. So far we have imagined only concrete instances of labor processes, the making of a particular sandwich or a particular cake at a particular time by a particular person. But one person will make a particular cake more slowly than another person will. Nonetheless, the slow cake maker is not paid more for her cakes than the fast cake maker is, despite the fact that the slow cake maker has spent more time in the kitchen than it has embodied more labor in the cake. So if differences in actual labor inputs led to different prices for commodities of the same type and quality, that would actually violate the law of one price, so we're not going to do that. So we have a problem in our definition of value as vertically integrated labor times. And this is why with Marx we should distinguish between concrete labor and abstract labor. Concrete labor is the labor peculiar to cake making, and that makes a cake on a particular concrete occasion. Abstract labor is the labor that is identified across commodities when four concrete instances of sandwich making are identified with one concrete instance of cake making by the fact that the same price is paid for the four sandwiches as paid for the one cake. And I just want to emphasize that it's this social mediation of exchange that performs the abstraction of changing concrete labor into abstract labor. So Marx identifies value as the socially necessary abstract labor that goes into the production of the commodity. In these very first pages of capital, it's really like in the first three or four pages that he makes that definition, Marx has not yet developed the conceptual machinery needed to specify socially necessary with sufficient precision. In particular, his frequent use of the word average I think is misleading. For example, he writes that labor is abstract so far as it requires producing a commodity no more time than is needed on average. It would be a mistake to understand average here as a true arithmetic mean of concrete labor. If Marx meant average in this sense, then one extremely lazy worker could throw off the commodity value of the whole society. So his own illustrative example makes clear that this is not what he intends. So he says, the introduction of power looms into England probably reduced by one half the labor required to weave a given quantity of yarn into cloth. The handloom weaver, as a matter of fact, continued to require the same time as before. But for all that, the product of one hour of the labor represented after the change only half an hour of social labor and consequently fell to one half of its former value. So the transition from one technique to another redefined what constituted socially necessary labor time. The transition was relatively sudden. The technique prevalent at a given time determines the social norm. If socially necessary labor time were determined by what is average, an hour of handloom weaver's time would have reflected rather more than half an hour of social labor even after the introduction of a power loom because the hand weaver's time would contribute to the calculation of the average. Similar caution should be taken whenever Marx uses the word average. I think they just sort of be alert. I don't think we should understand average as arithmetic mean when Marx uses it. For example, in the term average profit rate. All such cases are more prudently understood as normal or prevalent. Marx's example of the power loom, replacing the handloom, makes clear that the abstract labor socially necessary with production of a particular commodity is the amount of labor required to produce it in accordance with the regulating conditions of production to use the term of Anwar Shake. The regulating productive techniques have the lowest unit costs among the generally reproducible techniques available. Some generally reproducible techniques are not low cost. Marx imagines a capitalist spinner who has a hobby of using golden spindles rather than steel spindles. Nothing stops capitalists from using golden spindles rather than steel spindles, so it's therefore generally reproducible as a technique. But this capitalist is not paid anymore for his yarn, although it does cost him more to produce. Likewise, some particularly low cost methods are not reproducible. Here Marx gives the example of a factory powered by a waterfall rather than by steam. Because it spares the expense of the coal that would have otherwise been needed to heat water into steam, this technique is low cost, but the technique is not reproducible because there are not enough waterfalls for every capitalist who may want to power his factory with one to get access to one. So the waterfall using capitalists is not paid any less for his commodities, even though they do cost him less to produce. The first hurdle is as reproducible as a technique. The second hurdle is its lowest cost among those techniques that are reproducible. So let us look at the discussion of abstract labor by one of the most prominent living Marxist economists, Michel Heinrich. So he writes, Only labor time that is necessary for the production of a use value under average conditions counts as value constituting. The level of average productivity, however, is not determined by an individual producer, but rather upon the entirety of producers of a use value. So we see here the afterlife of Marx's imprecise choice of words, average. It is clear that Heinrich correctly excludes both golden spindle using labor and waterfall using labor from the constitution of value. But he implies that both would contribute to what constituted average conditions, which they do not. The individual producer is irrelevant, but so is the entirety of producers. It is only those producers using the lowest cost generally reproducible method who determine commodity values. You know, I mentioned Heinrich's not to sort of pick on him, but to say I think that Anwar Sheikh's paraphrase of Marx's intention is extremely useful analytically. Okay, so then we move on from regulating conditions of production to regulating capitals. So just as the productive technique, which is lowest cost among those that are generally reproducible, is the regulating method, a capital which employs the regulating method we can call a regulating capital. These productive techniques and these capitals are the ones that set prices. Although the regulating technique is by definition the lowest cost among the generally reproducible techniques, whether or not the regulating technique is in fact low cost or high cost, relative to other capitals active in the same sphere of investment, depends entirely on concrete factors. So in one sector, for example, manufacturing, the regulating capital may be those that have the lowest unit costs of all productive methods in use. In another sector, for example, agriculture, it may be that the regulating capital is the one with the highest cost of all productive methods in use, but that it is regulating because it is the only method that is generally reproducible. For example, because only extremely infertile land is now available for new cultivation. So we may now understand the labor theory of value as the claim that vertically integrated labor times produced following the productive techniques of regulating capitals are what regulate relative prices. To the extent that we accept Shakespeare's phrase of Marx's socially necessary abstract labor, this is also Marx's labor theory of value, namely that commodity prices are governed by the socially necessary abstract labor time reflected in them. Michael Heinrich rightly emphasizes that the process of abstraction, the conversion of concrete labor into abstract labor, is, if you will, enacted via exchange. So he says abstract labor cannot be measured in terms of hours of labor. Every hour of labor measured by the clock is an hour of a particular concrete act of labor, expended by a particular individual regardless of whether the product is exchanged. Abstract labor, on the other hand, cannot be expended at all. Abstract labor is a relation of social validation. Geltungs Verhältnis that is constituted in exchange. Nevertheless, I think he overstates his case. There is an upper and a lower bound to what any worker applying any concrete labor can achieve in one hour, and this fact holds for every worker in society. As such, the clock very well measures the possibility space for the fixing of social labor into commodity values. Furthermore, clock time expended by workers in the regulating firms, we expect to closely correlate with actual commodity values, since it is the conditions of these firms that are in fact dictating prices to the marketplace. We can use clock time as a first approximation of socially necessary abstract labor time. So if the law of one wage and the law of one price were the only forces that governed the economy, we would expect commodities to always sell at their value. That is, according to the amount of whatever, you know, this whole definition I said, of, let's just say, of labor in them. But there is a third law, the law of one profit, which drives commodity prices away from values. And to explain this law, we must first introduce profit and the profit rate. Okay, so profit first. According to Marx, profit arises from the unpaid labor of workers in productive industries, which he calls surplus value. Here, unpaid labor has a specific meaning of the difference between the labor that goes into producing a particular commodity and the portion of the commodity's value, which reflects the socially necessary labor time embodied in the commodity basket that keeps a typical working class breadwinner alive. So let me just talk through an example, which I hope is clear. So suppose that a worker working in a regulating capitalist furniture factory makes one chair in one workday. I'm going to have it all be ones to kind of keep the math simple. So one chair in one workday. Suppose that the value of the material inputs of the chair, the wood, the nails, the depreciation of any machinery that went into its use, also amounts to one workday of social labor. Suppose that the value of the commodity basket that keeps the worker alive for one day, that is the worker's food, the one day's rent, one day's heating on the apartment, that all sums to one half workday of social labor. Well, if you're the capitalist, you won't be able to sustainably employ people if you don't pay them that, but you wouldn't pay them any more than that. So the wage is one half day of social labor, but you're getting one day of social labor out of the worker. So let's just say the table then sells at the price of two workdays, and then one workday of that price is the previously embodied labor that's in the materials, and one is the living labor that the worker provided, and one half of that goes to pay the worker's wage, and then the one half that's left, that's the profit. So the profit rate is a ratio of the surplus value to the total capital advance by the capitalist, the half day profit over the two days, or no, it would be, in terms of advanced by the capitalist, it's actually one and a half days, right, because the capitalist pays the one day for the materials, the half day for the wage, and then they get the extra half day for free. So the profit rate is the one half day over the one and a half days. So here I'm just going to take this explanation of the source of profit as given, and I will also pass over in silence the extremely interesting discussion of the difference between productive and unproductive labor. And now we look at the divergence of profit rates within one industry. We can call the profit rate in a regulating capital the regulating rate of profit. So within one sector of the economy, those who enjoy access to a productive technique which has a lower cost than the regulating technique, for example those who use waterfalls to power their factories, enjoy a surplus profit over the regulating rate. In contrast, those who have not yet implemented the regulating technique by virtue of employing an unnecessarily costly method such as using gold and spindles, command a rate of profit below the regulating profit rate. They have a negative surplus profit. Assume that a certain amount of yarn sells at 30 euros. Table one offers an illustration of how the costs and profit might break down for the three types of capital under discussion. Okay, so first we have our capitalist who uses golden spindles and steam power is constant capital. That's to say the materials costs in particular commodity is 20 euros. The variable capital which is the wage paid to the labor is 10 euros and the surplus value is 10 euros. I assume a rate of exploitation that's surplus value over variable capital of 100%, just to keep things easy. So he gets no profits. He's not a very good business model using golden spindles. Then if you use steel spindles and steam power, then you have 10 in constant capital because you don't have to pay for the golden spindles. And then 10 in variable capital, 10 in surplus value, 10 in profit. So this is the regulating capital, the one that sets the price in the market. And then if you use steel spindles but you happen to have a waterfall, so you don't have to pay for the coal that goes into producing your yarn, then you only have five in constant capital, you have 10 in variable capital, you have 10 in surplus value, and you have a profit of 15. So you have a profit that's above the regulating profit rate. So in very concrete terms from a societal perspective, within one sector those firms with an unnecessarily costly method are donating the exploitation of their labor force to those firms with irreproducibly efficient methods. In the regulating capital, the math of exploitation, that is unpaid labor, that is surplus value, coincide exactly with the profit with me. So this is in one sector of the economy. So capital intensiveness, the ratio of the means of production, that's the constant capital, to wages, that's the variable capital, is called in the Marxian lingo the organic composition of capital. In table one we assume more or less the same technology prevails across the three firms in question. The only difference among them is that there's one firm that irrationally uses unnecessarily expensive spindles and one firm that has no need to pay for coal. In this case the firm with the lowest organic composition of capital has the highest profit and the firm with the highest organic composition of capital has the lowest profit. This is the situation that prevails when firms either economize on or splurge on their constant capital but have the same labor inputs per unit output. What Marx considers more typical of capitalist development is when firms implement technologies that make use of more and more valuable machinery but less and less labor. So note that more valuable machinery when viewed as contributing to the constant capital that goes into one particular commodity will be very small. If you have a million dollar machine but it shoots out a lot of widgets, the depreciation cost that that million dollar machine is contributing to one individual widget is still small. That's the point. So as a simplifying assumption, just to keep the math simple, in table two I presume that the increased price of machinery exactly balances with the increased output that the machinery permits. So i.e. that the constant capital can be held constant across the three technologies. So the year is 1889. A few beleaguered workers are clinging on to the hand loom. The Lancaster loom predominates and the innovations that will soon lead to the Northrop loom are known only inside of the firm of George Draper and Sons. The price of yarn remains 30 euros. So this is in table two. We have the hand loom workers. They have a constant capital of 10, the variable capital of 10, surplus value of 20, and a profit of zero. The Lancaster loom, which is the lowest cost, generally reproducible method, constant capital of 10, variable capital of 10, surplus value of 10, profit of 10. And then the soon-to-be Northrop loom would have a constant capital of 10, variable capital of 5, a surplus value of 5, and a profit of 15. So in situations such as those shown in table two, the firm with the lowest organic composition of capital has the lowest unit profit, and the firm with the highest organic composition has the highest unit profit. So if the regulating technique has a higher level of capital intensiveness than those inefficient techniques which are going out of use, we have arrived at what we can call the communism of capitalists. From each according to his surplus value to each according to his capital advanced. So you sort of pool together all the exploitation, and then you hand it back out according to who has invested more capital. Over time, the inefficient technique is abandoned. Over time, the technique that yesterday reaped a surplus profit becomes the regulating technique of today, and the productive techniques still unimaginable yesterday come into being today as those attracting surplus profits. These tendencies in no way lead to equalization across the firms. Equalization of profit rates across the firms. You don't get equalization of profit rates inside one industry, ever. However, when we move from the analysis of profit rates within a single industry to profit rates across industries, we do now see an equalization of profit rates. It is here that we meet the famous transformation problem, and so yeah, now that was all sort of background, and then we're ready for the transformation problem. Okay, so equalization of profit rates across sectors. Each sector has its regulating capitals, and their regulating productive techniques. The regulating technique in a given industry will have its characteristic ratio between means of production, constant capital, and labor, variable capital. It's characteristic organic composition, which in turn will imply a characteristic profit rate. So just, you know, if generally speaking, if I have lots of equipment and few workers, there's not very many people to exploit, so I don't get much exploitation. I have a small profit rate, whereas if I have a little bit of machinery and huge work floors, I have lots of people I can exploit. I get a big exploitation pool, right? And have a big profit rate. From a regulating paper manufacturer using large and expensive machinery with few workers, we expect a low profit rate, and from a strawberry farmer with a large work floors, we expect a high profit rate. If such circumstances arose in practice, however, the clever paper manufacturer would sell his paper mill and buy himself a strawberry farm with the proceeds. So instead, it is the possibility that a paper manufacturer could do this and that in practice some paper manufacturers do, it is this mobility of capital across industries that gives rise to a third force in the economy, a drive to make the profit rate equal across sectors. The mobility of capital is constrained. Starting up a photocopy shop at the corner is easier than starting up an international container shipping business. Thus, we expect a certain impeding of the equalization of profit rates across industries to the extent that an industry is hard to enter or hard to exit, which, generally speaking, will be the same industries. Therefore, as Shayk points out, we expect the equalization of profit rates, especially on new investments in each industry. And actually, just yesterday I noticed that Marx makes the same point in theories of surplus value, so I could have cited Marx there. So the new investments will use the regulating technique because if I'm newly investing in something, I'm going to go for the lowest cost technique, but I have to go for the generally reproducible technique. And these new investments will create new regulating capital. So to quote Shayk, it will be the profit rates of these regulating conditions, which will be of concern to new investment in any given industry. Industries with regulating rates of profit, which are higher than the national regulating rate, will experience accelerated inflows of capital, which will drive up their supply relative to their demand, and thereby lower their prices and profit rates. The opposite process will obtain in industries with regulating rates lower than the national average. Since demand, supply, and even methods of production are constantly changing, the end result is an enforced oscillation of regulating rates around some national average. So this is the law of one profit. So Table 3 presents a hypothetical numerical example. We consider products from three industries each with a price of 30 euros. Paper manufacturers stand in for any industry of particularly high organic composition. Strawberry farming plays the same role for industries with a particularly low organic composition. Between these two extremes, we imagine a standard industry that shares the same organic composition with the economy as a whole. In this standard industry, value and profit will be equal. So in the strawberry farm, we have 5 constant capital, 15 variable capital, 15 surplus value, a commodity value, an embedded labor value of 35, but you get a profit of 10. Why? Because the standard industry gets a profit of 10. The standard industry, you get 10, 10, 10, 10, and 10. Fine, very easy. And then in paper manufacturing, you have constant capital, 15 variable capital, 5, surplus value, 5, commodity value, so embedded labor is 20, but profit rate is 10. So it's kind of analogous case where the drive to equalize the profit rate now as a force is kind of pooling up exploitation from the labor-intensive industry and then divvying out profit to the capital-intensive industries. So the three firms sell their products not at their values, but at the price that gives them the same profit rate, which is called the price of production in Marxist terminology. All three industries lay out a capital of 20 euros and all receive a profit of 10. So the presentation in Table 3 is however flawed because it assumes that firms buy their inputs at their value but sell their inputs at their price of production, whereas if firms are selling at their price of production then they will also be buying at prices of production. And this problem is what makes the transformation problem a problem. Let me just reassure you that as a technical problem there is a solution. We can expand Table 3 to encompass all commodities in the economy and we can specify the proportional material components that go into their constant capital for each commodity, for example how much paper goes into making strawberries. Then we can start our calculation like we did in Table 3 and then with the inputs in values apply a standard profit rate, get the outputs as price of production and then we can feed back the outputs into the inputs, apply a standard profit rate again, and then feed it back again. And if we just iterate this process it will stabilize to a particular price of production which you can think of as the actual price of production. So I do not find that this solution very satisfying because it's unrealistic to quote Heinrich the transition from value and surplus value to production price and average that is I think in my terminology regulating profit is not a historical even temporal sequence. You know firms don't do this process of sort of adjusting from value to price production but rather different levels of description. It's just a question of analytically do we imagine that the economy has just the law of one wage and the law of one price or the law of one wage and the law of one price and the law of one profit. So the question that I want to investigate is how values are transformed into prices of production in the daily behavior of human beings. And then I'll just talk you through my answer which you know that's Marx's answer but is basically so to take let's take labor intensive industry first. So I'm a strawberry farmer or something like that. Why is it that I'm willing to sell my commodities under their value? Well because if I weren't willing to do that if I said I'm gonna be paid what these things are worth then some other farmer will come along and charge less for his strawberries and then he'll get all the market share and I'll go bankrupt. So that process is easy to understand. The consumers will go to where it was cheapest and as long as a capitalist I'm getting the return on my capital outlay that I expect then I'll keep in business. I don't care if I'm not paid at the value because after all that's just the exploitation that I've taken from my laborers so if I'm not paid for all of my exploitation who cares, right? That's the easier side of it to understand. Now the question is why do we pay some capitalist over the value of their commodities? And there you have to think of there as being a... you know basically because we have to, right? And so what is the constraint that means we have to? And I think that this is where I think it's useful to turn to Marx's theory of rent and he doesn't quite do this and I'll just talk you through two cases. One is let's say that the regulating technique involves something that's copyrighted or that has a patent on it. Well then someone has a monopoly on that property. So even though it's the regulated technique we have to pay a monopoly price. It's as if... I mean the example he uses in Volume 3 of a monopoly rent is like if I have a vineyard that makes just the most nice wine and I'm the only one who has the vineyard. So for that wine the only question is how high is the effective demand? Because the supply is limited, right? So I think one component of why we pay for... why we pay prices above values is because of monopoly rents. But the other one is what we call to use theory of rent terms is called absolute rent and here's the way you think of it. Okay this isn't quite as nice a vintner but it is a guy who sells... well let's make it whiskey just have to be sort of analytically different. Some product that has a naturally long production period. So if I'm a capitalist I'm thinking do I make whiskey like 20 year old whiskey and then I have to tie up my money for 20 years in whiskey barrels or I could just stick in the bank and then I get interest on it or I could buy a strawberry farm. So in order, almost like as a form of extortion in order for society to have a 20 year old whiskey you have to pay the capitalists enough to keep their capital in whiskey and that is in the theory of rent called absolute rent which in the context of agriculture is the amount of rent you have to pay on the worst land. So you're not paying because it's particularly nice land you're just paying because land is privately owned. So that's what... So anyhow that's the end which is to say like what is the mechanism whereby in the equalization of profit exploitation is sort of pooled up and then divvied out again. Well, on the part of those people who are paid under the value of their commodities it's because that's both the best they can manage and it perfectly satisfies what they want. They still get the profit that they expect from the outlay of their capital and then the reason why we pay for some products above their value is because those are sectors of the economy that either command monopoly rents or absolute rents. So that's my sort of attempt to kind of give a sort of intuitive explanation of the transformation of values into prices of production rather than this sort of more technical way of oh you can do it with matrix algebra. So that's the end of my talk. Everything in the Marxist analysis is historically specific. So like maybe to be a normal working class person in today's society in the West to have your iPhone and you need to drive a car that's no problem at all because he says very clearly already in the first few chapters that the wage is determined sort of social historically. Of course ultimately there's a biological floor. And let's say you can see this sort of social historical determination work across the decade. For instance by breaking the labor movement in the 1980s you can kind of change the profit-wage distribution through kind of social cultural forces if you like. Also the legal infrastructure, right? That's all accounted for in Marxist presentations. Going to utility, the place that this comes in from Marx is what is a commodity. So a commodity is a thing that is produced for exchange rather than produced for the consumption of the producer. And it has a dual aspect. It has a use value which is like the use value of water is drinking it and it has an exchange value. And the exchange value you can think of as the price. And then the thing that links the use value and the exchange value is the value and the value is the vertically integrated labor time. That's the sort of Marxist theory of the commodity, right? Where for instance you have to have a use value a socially sort of valid use value in order to be able to sell your commodities. Let's say, when I hear about the utility theory I sort of think, well, we had this nice distinction between use value and exchange value which you see very clearly in something like the housing market, right? You see homeless people on the street, they would really like to have homes. We have homes, they're empty. That's because the homes are being produced for exchange and not for their use value, right? And I think that's a very useful conceptual distinction. And it seems like somehow the marginal people try to kind of shove their exchange value into their use value. But I'm not as familiar with those economists. Maybe it's fashionable to buy from Mr. Golden's spindle. I think that's totally true. The question is, is it sufficiently fashionable to keep him in business? And I think the way to think of that is it's just a question of product differentiation. So the law of one price applies to products of similar use value where the use value might be to seem fashionable, yeah? But competition among providers will exist specific to that use value. Thank you very much.