This is my third entry into my debunking “Kapitalism 101” series. In this article I will focus on Law of Value 4: Value and like in my other entries I will focus on what I view are the primary mistakes.

If I am selling a tomato this tomato has no use-value at all for me. Its use-value only exists for the person that buys it. I am only interested in the exchange-value, how much money I can get for it.

No necessarily true. Taking the tomato as my example I could very well have “use value” for it but rather have a pickle, say, for a sandwich. I value the tomato but I value the pickle more. Just  because you want to enter a trade does not mean you are indifferent to the good you wish to trade.

 Bourgeois subjective value theory talks about a “double-inequality of exchange.” It says that the only reason exchange happens is that two people value the other person’s product more than the product they are giving up. Marx actually goes even further than this. He says that to the seller the commodity has no use-value at all, other than the fact that it can be exchanged.

As I explained above just because you want to enter a trade does not mean the item you want to trade is indifferent to you, or has no “use value”. It simply means you value what you want to trade less than what you want to trade for. Let us take what “Kapitalism” has called the god of all commonalities and use this example. You are at a store buying a tomato for five dollars. Outside of purchasing the tomato does the five dollars have “use value”? Of course it does? To revise my previous example, trading a tomato for a pickle for my sandwich does not mean the tomato has no “use value” to me but rather I value the pickle more.

By claiming that consumers make a subjective profit from exchange it transposes the real, objective profit of a capitalist who pays his workers one sum of money and sells the products of their labor for a greater sum of money, onto a completely intangible and unquantifiable notion of subjective profit.

Of course the worker makes a profit (defined as a financial benefit). The worker received wage X which he would not of received without entering the exchange.

I know you are in a lot of suspense so I’ll just come right out and say it: Marx argues that it is the labor time that society devotes to the production of these commodities that accounts for this underlying value.

Marx argues wrong.

Commodities that take more labor to create have more value than ones that take less labor.

Let us list a few goods. A TV, car, pencil and computer. Most people would list them in order from what they value most to least in a order like this, car, TV, computer, pencil and I would imagine the labor time required would follow the same list. Marxist’s would confuse this correlation with causation. Instead of the increase in labor required being the cause it is the general usefulness. A pencil is generally less useful than a computer and a computer less useful that a TV and a TV less than a car. If asked to order a list of goods from what they value least to greatest no one would ever ask the question “how much labor time does this require?”

As labor becomes more productive, as it becomes easier to produce things, their value falls.

Price falls. Value does not. You keep mixing those two up.

For one, scarcity and utility cannot be understood without reference to labor.

Scarcity is a result of a low supply and high demand. Referring to labor is not necessary to understand this and to figure out what is useful to me requires no reference to labor either. Neither require labor to understand.

The amount of a commodity that exists at any point in time is clearly related to the amount of labor that has been devoted to producing that commodity.

As I explained yesterday supply is effected by more variables than just labor.

If we realize that human society is not the result of some natural or divine eternal logic but merely the creation of our own labor then that means that we have the power to mold and shape that society as we see fit

Society is far more the result of spontaneous associations than labor.

Let’s review and clarify:
1. The usefulness of a commodity is its use-value. Uses can’t be quantitatively compared.


2. The exchange-value of a commodity is the proportions at which it exchanges with other commodities.

Sure. I won’t argue with the definition of Marxist jargon.

3. Price is a specific type of exchange-value, the ratio at which a commodity exchanges with money.

Okay I will argue this. Prices REFLECT value. They are not value themselves.

4. The fact that commodities measure their worth against each other implies that they have an intrinsic value.

As you are referring to prices here I repeat prices Reflect value but are not value themselves.

5. This intrinsic value is not a physical thing, nor is it magically bestowed upon commodities. It is not a timeless trait existing for all products of labor everywhere. Value, in the way Marx uses the term, is the means by which the labors of isolated producers are coordinated through commodity exchange. It is the social substance the binds together the labors of isolated, disparate individuals separated through the market.

No good has “intrinsic value” as every good is subjectively valued.

We notice then that value and price are not the same thing.

Very much true. Prices reflect value.

The only way we see value is indirectly through these quantitative relations between commodities.

Their is no one value. We don’t value a shirt with Che on it the same as a shirt with FA Hayek on it. What we see in prices is only a average value.

I have one more installment before my partner publishes his articles. I hope everyone has been enjoying these so far.


Posted by Roman Bilan

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