On my first post “Law of Value- 2. The Fetishism of Commodities: Refuted” @smashing.nirvana on Instagram issued a response and in this post I will be responding to my citric.

These signals denounced by “Kapitalism” for being indirect and impersonal are they only way a advanced economy can operate. The only way everyone’s knowledge can be contributed to the economy. Kapitalism never once denounced these market relations. In fact, he never made an argument out of this observation; it stayed what it was, an observation, specifically, an observation of the transformation of social relationships being made indirect and materialized. “…commodities are just the material forms of a social labor process coordinated through market exchange.” (Kapitalism) Through this market exchange, supply and demand determine which commodities are useful for most people and this, indirectly (thus, the claim that these social relationships are now made indirect, as there is the mediation through money) tells manufacturers and servicers which concrete labor is useful. This claim made by Mr. Credible and Instahayek is baseless. There was no attack to begin with and no denunciation. Starting this paper off with a straw-man.

I think the source of this is a fundamental differing in interpretation which only “Kapitalism” can sort out. Also supply and demand do not signal where labor goes but where resources go (of which labor is one but only one of many).

Money is not just a scrap of paper. It is a claim on goods. That is why it has power. Because it allows for the person who owns it to receive goods they value more. Materially, money is just a scrap of paper. You cannot cut it open and reveal the use-values one gets in exchange for said money.

Materially, a car is just a mixture of metal, plastic and whatever else. You can not cut it open and reveal how much “use-value” one gets with the car. Sure we can simplify objects down but we misrepresent what they are. A counter is not just wood and just calling a counter wood misrepresents what it is.

What it is, however, is a social relationship materialized; “it is an expression of social relations.” (Kapitalism) You, once again, attack a non-existing argument, another straw-man.

No money is not a social relationship. A social relationship, as defined, is “any relationship between two or more individuals”. Money is not this. It is a claim on a good. It, in itself, expresses nothing.

Secondly, this portion is redundant as you claim, “It is a claim on goods. That is why it has power.” (Instahayek/Credible), whereas Kapitalism agrees with you when he says, “It only has this power because it is an expression of social relations.” (Kapitalism) This claim on goods is a social relationship.

See above rebuttal.

If the measure of quality of the price system is its ability to obscure social relationships, then it has passed with flying colors. Unless you mean ‘well’, as in how beneficial a mechanism is to a system, then it has done poorly.

The price system has done astonishingly well when left alone. It has achieved its goal, to coordinate resources, astonishingly well. When was the last time someone saw a excess of good X and a shortage of good Y and good X and Y both derive from good Z? Good Z is, say, chickens. Good Y is chicken eggs and Good X is chicken meat. We have only so many chickens and high demand for both. The price system makes sure we don’t have a excess of one and a lack of both.

As Thomas Sowell wrote “These changes in price then direct resources to where they are most in demand and direct people to where their desires can be satisfied most fully by the existing supply” and a few short paragraphs wrote again saying “For example, whenever the price of oranges goes up, some people switch to tangerines.
If a vacation on the beach becomes too expensive, people may take a cruise instead. This is incremental substitution. Not everyone stops eating oranges when they become too pricey. Some continue to eat the same number they always ate. Others cut back, while others stop entirely and/or switch to another fruit. In spite of the fact that the orange is still the same, the value of the orange that each individual attaches to it differs greatly.
This is where we are now. We have some pricey “oranges” and too many customers are
either switching to another fruit, or just not eating fruit.”

For one, it has hindered any knowledge of the consumer from developing about the conditions of the laborers producing this article, the conditions of the environment, etc.. In that, you’d have to research external sources.

Their are no prices involved in this article to my knowledge. But to the greater point prices do not convey this knowledge. They convey knowledge about supply and about demand.

The price reveals nothing besides that it measures something.

Prices reveal that their is a shortage of coffee beans from Colombia. You may not realize that this is what they say but the average consumer will  buy less coffee from Colombia

“Actually value is subjective. It is not entrensic nor does it come from “social relations”” The awkward style of your writing and argument derives from your sense of overconfidence in your belief. This prime example of providing no argument and retorting with a tag-line, is why I bring this up. The whole purpose of this critique is to argue how value, the determinant of price, is subjective. Yet, like an awkward scientist, you declare your hypothesis as truth and claim any evidence revealing otherwise as false. I am not saying value is objective, as of now; I’m, rather, stating you walk into an argument already believing your side as the ultimate truth and neglect any criticism with a throw of a tag-line. I’ve told you many times: arguments, not tag-lines.

In the article I provided at least two proofs for my assertion. “Labor does not provide value as value is subjective. I will provide another proof. The diamond-water paradox. Digging a diamond require many labor hours but finding water does not. We value diamonds more so this is in line with the LVT. But if we find the diamond while hiking this is minimal effort yet we still value the water less and value the diamond no less.” I also provided another proof  “Yes. I will provide a proof. Some people would pay millions for modern art. Some would have to be paid to take it. That is because they have subjective values.”

“Some people would pay millions for modern art. Some would have to be paid to take it. That is because they have subjective values.” What remains the most infuriating, yet, simultaneously, laughable experience that seems to forever happen in every critique of Marx’s theory is, that subjectivists expose their lack of knowledge on the very thing they critique. If having paid any attention to the source material they are discussing, they’d realize Marx made it very clear that there are three ‘values’: use-value (utility), exchange-value (price), and value (the determinant of price). Credible and Instahayek reveal their ignorance of the discussion at hand when they equate use-value and value in the poor ‘modern art’ analogy. The art has a different use-value to different people. This does not create value. This creates demand.

First let me critique a basic errors. Value does not determine price. Price reflects value but it is determined by supply and demand. Second both confuse value with what the average value of a good it. The utility of a good is the main determinate of how an object is valued.

Value cannot arise out of exchange. If I exchange a sandwich, worth $2, with a consumer whom then gives me $3 for it, I’ve created a personal profit, but no ‘value’ has been generated. The sum of value remains the same in the exchange, no matter the bearer of the personal profit. 2 + 3 = 5 just like 3 + 2 = 5. It is of no concern to the outcome, who bears the greater number.

This error comes out of a basic misunderstanding of prices and value. Prices reflect value but they are not value themselves. Value is created through exchange by marginal utility. The satisfaction, which is more than would be otherwise, meaning that next time it exchange sit will exchange for a higher value. This causes a increase in exchange and general value.

“Mainstream economics think’s [value] is subjective” Here is an argumentum ad populum and appeal to authority fallacy conducted by Credible and Instahayek.

Not at all. “Kapitalism” was making the claim of what modern economics believes. I responded by pointing out that they don’t believe that. “…in modern day mainstream economic theory in the idea that value comes from the subjective experience between a consumer and a commodity and that capital creates value by itself.”

“Actually profits are because entrepreneurs forgo current consumption, take risks, and organizing production.” Kapitalism never said profits come from exchange. Read more carefully: “Profit appears to spring out of exchange itself, yet Marx worked hard to explain how profit actually originates in production through the unequal relations between capital and labor in the workplace.”

Unless I am misinterpreting “Kapitalism” he is clearly endorsing this view from Marx. “Marx worked hard to explain how profit actually originates in production through the unequal relations between capital and labor in the workplace.”

“[A commodity’s value] depends on who you ask” / “Digging a diamond require many labor hours but finding water does not. We value diamonds more so this is in line with the LVT. But if we find the diamond while hiking this is minimal effort yet we still value the water less and value the diamond no less.” Second and third case of revealing ignorance. Value, the determinant of price, does not equal utility, use-value.

See above for refutation.

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Posted by Roman Bilan

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