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#14827717
@anasawad

I don't think you understand. Technocracy, or what I mean, is an economic system while what you are talking is a political system. To make a distinction, what you are talking about is noocracy while I'm talking about technocracy. It's confusing I know. The best case I can make for this is by pointing you to the link I gave. It explains Technocracy better than I ever will.
#14828377
@Wellsy

Mill’s concept of utility differed from “use-value” because utility is quantitative and is commensurable with exchange-value.


Modern economc theory has (largely) moved away from the idea that utility is measurable and comparable between individuals. Instead utility is defined as a real-valued function that represents a preference relation. For example, for two bundles of goods x and y, u(x) > u(y) if the consumer prefers x to y. The intensity of utility is irrelevant to the theory of demand, only the utility of goods relative to each other is relevant. Modern consumer theory was developed in the 20th century, starting with Pareto, so obviously Marx didn't know about it (if you want a critique of the axioms of consumer theory I suggest looking into behavioral economics).

I said "largely", because in welfare economics for example (a field of normative economics), utility (of consumption) is assumed to be measurable and comparable between individuals: A social welfare function is defined that aggregates utilities of individuals (the most famous ones are the Rawlsian and Utilitarian forms).

As for Marx' definition of use-value, what is its use-value? (pun intended). How would you define a "social value function" of commodities for example that differs from existing ones?
#14828393
Rugoz wrote:@Wellsy

Modern economc theory has (largely) moved away from the idea that utility is measurable and comparable between individuals. Instead utility is defined as a real-valued function that represents a preference relation. For example, for two bundles of goods x and y, u(x) > u(y) if the consumer prefers x to y. The intensity of utility is irrelevant to the theory of demand, only the utility of goods relative to each other is relevant. Modern consumer theory was developed in the 20th century, starting with Pareto, so obviously Marx didn't know about it (if you want a critique of the axioms of consumer theory I suggest looking into behavioral economics).

I said "largely", because in welfare economics for example (a field of normative economics), utility (of consumption) is assumed to be measurable and comparable between individuals: A social welfare function is defined that aggregates utilities of individuals (the most famous ones are the Rawlsian and Utilitarian forms).

As for Marx' definition of use-value, what is its use-value? (pun intended). How would you define a "social value function" of commodities for example that differs from existing ones?

Well I haven't read capital to give a comprehensive answer but I believe it'd have to be put in relation to what human needs it satisfies.
What do you use certain objects for? Whilst one could use food in different ways, generally it's bought to be consumed. If someone bought a shovel, though they could use it for other things, it's generally going to be used for digging. If someone bought a sweater, generally they're going to wear it.
I don't think it necessarily goes far beyond this point or at least I'm not indepth into Marx's work to be satisfactorily answering because I haven't gone through his economic works and thus rely on others summations at this point.
I take it the reaosn Marx introduced the concept as he defined it was to show the indirect manner in which people acquired things, workers produce things that are then sold to other people for their use. The cook doesn't eat the food, he makes it for other people who pay for it. The idea of use-value being derived as a particular concept in relation to exchange value as people are exchanging things via money in order to acquire things for their use-value.
http://libcom.org/files/marx,%20marginalism%20and%20modern%20sociology%20-%20clarke.pdf
Spoiler: show
In 1844 Marx had shown that the hidden presupposition of classical political economy was the concept of private property and that the foundation of private property was alienated labour. In the critique of the classical theory of value this argument is made more concrete. The social foundation of value is an extended division of labour within which social production is regulated through the exchange of commodities. The individual member of society does not produce directly for society according to some self-consciously regulated plan. Rather the individual produces privately. However, the product is not destined for the producer’s own use. It can only function as a use-value within the system of social production. Despite its private production, therefore, it has been produced for the use of others and it is only as such that it can serve as a useful product. Thus the commodity is necessarily a social product, and the labour which produced it is necessarily a part of social labour.

As a thing the commodity is a useful object, product of the concrete useful labour of an individual producer. However the commodity cannot serve directly as a use-value. It can only become a use-value by being exchanged as a value. Hence, within a commodity-producing society the social production of use-values, and so the satisfaction of human needs, is only achieved in the alienated form of the private production of commodities as values.

The mysteries of the commodity arise because the social relations within which commodities are determined as values are not immediately apparent. Although value is attributed to a commodity within a social relation of exchange, it is a matter of accident with whom any particular exchange is made. The individual producer is not concerned who buys the product, but is concerned only to realise its value. The individual has a determinate relationship with the commodity as a value, but a purely accidental relationship with other producers. The value of the commodity then appears to be a property inherent in the relation between the private individual and the commodity as a thing.

As Engels argued in his early critique of political economy, the ‘labour theory of value’ derives the value of the commodity one-sidedly from the relationship between the commodity and the labourer as producer, the theory of utility derives it equally one-sidedly from the relationship between the commodity and the purchaser as consumer. In each case the value of the commodity appears to be independent of the social relations of production: the relations between people appear to arise because the commodity has a value, as product of labour, on the one side, and as object of desire, on the other. Hence the social powers of the commodity, that derive from the social relations of commodity production, appear to be inherent in the commodity as a thing. This is the origin of the ‘fetishism of commodities’.


And I'm not sure if I get the question, but my impression is that you're seeking for some comparable element in Marx's work that's like the the social welfare function in which the relation of utilities to one another.
And I think I've heard what you're describing here, which it seems some are skeptical to whether it does what it asserts.
https://kapitalism101.wordpress.com/2010/06/13/law-of-value-4-value/
This is the section to which the 2nd quote refers to.
One book= 1 car. What does that mean? What does it mean to say something is worth so much of something else? Some people think that the usefulness of a commodity can answer this. But uses of things can’t be compared. You read books. You drive cars. They are two totally unrelated and incomparable uses. Maybe you like books more than cars. Does this mean that books are worth more than cars? (1)

1. There have been attempts by neoclassical economists to reduce the usefulness of commodities to some common substance. Since there is no common substance that makes up usefulness they have to make up an imaginary substance called “utles”. These economists actually say things like, “A cup of coffee has 13 utles and a car has 3000 utles of utility”. But such attempts to invent imaginary substances with which to reduce utility to are generally thought to be pretty silly and misguided. In neo-classical economics this concept has been mostly replaced by the concept of rank preferences, or graded utility: A consumer has a ranking of demand preferences but these can’t be reduced to some common scale. In this way the question of value, in the sense that a commodity has a definite amount of value as determined by subjective social demand, is mostly abandoned: Commodities don’t have values, but consumers have preference rankings and these preference rankings result in prices. This approach conveniently eliminates many of the theoretical problems with earlier marginal utility theory (namely the unquantifiable nature of subjective utility), yet it has an inherent circularity: consumer preferences are not formed in a vacuum. They are formed on the basis of preexisting exchange ratios. As the prices of commodities change so do the preference rankings of commodities. So commodity prices must first be assumed in for marginalists to theorize the subjective processes of price formation. This is circular. The pink elephant in the room is the productivity of labor. As this productivity changes so do prices. There are a host of other criticisms lodged at Marginalism by Marxists. Perhaps sometime in the future I can write/produce more on the topic.

And the issue I see, is it still seems that there is a focus on the subject much to the neglect to value as derived from production which I believe is what Marx concerned himself with, modern economics still confines itself to a narrow focus and hasn't returned to that which the political economists were trying to investigate back in the day.
https://www.marxists.org/glossary/terms/t/h.htm#theory-marginal-utility
One other important change flows from the above changes in orientation, especially the placing of “supply and demand” in centre-stage: although “value” was denied by the theory, it in fact remained, but instead of being regarded as an objective attribute of the process of production, it was transformed into a subjective attribute of the process of consumption. Or put it another way, the focus shifted from the supply side to the demand side.

So these factors taken together laid the basis for the marginal revolution: positivist rejection of metaphysical value for real price, subjectivism in values, abandonment of enquiry into the origin of wealth, application of differential calculus, and the triumph of utilitarian ethics.

And what I wish to emphasize was that the use-value in Marx's theorizing is distinct from the sense of utility graded or what ever in what seems to be an emphasis on subjects perceptions and purchasing.
https://kapitalism101.wordpress.com/2011/11/15/law-of-value-8-subjectobject/
Spoiler: show
Great confusion comes from the fact that the word “value” is used to mean different things. Some people think that because you and I make personal value judgements when we go shopping that these judgements must be the source of the value of commodities. But the personal value judgements we make in our heads are not the same as the exchange values of commodities. Commodities have exchange values, the quantitative ratios in which they exchange with other commodities. People make value judgements, judgements which are not measurable or quantitative. Just because we use the same word, value, for both phenomenon doesn’t mean that they are the same thing or that there is any relation between the two at all. This relation has to be proven. Many logical mistakes are made by people who don’t distinguish between these two uses of the same word. Don’t be one of those people!

STV argues that we can understand exchange-ratios solely through a theory of the subjective, psychological motives of consumers. It’s attempt to do so is fatally flawed, shot through with unwarranted assumptions, shoddy abstractions and circular logic. Let’s take a look at some of these problems...

see link if want to see their points

So I think the matter is that Marx's focus is on that which has been largely ignored in modern economics as far as I see by how things are described.
Marx is concerned with capitalism which is seen to have inverted the subject/object in that the market in a very real sense as well as perceived becomes a force to which we respond rather than direct.
https://kapitalism101.wordpress.com/2014/07/02/indirectly-social-labor/
The over-arching point which Marx is aiming at here is the fact that capitalism is not ruled by people, by subjects making choices, but instead by objective economic laws. These laws rule people rather than people ruling over the laws. “Individuals are subsumed under social production; social production exists outside them as their fate; but social production is not subsumed under individuals, manageable by them as their common wealth.”3 A capitalist economy is of course made up nothing more than individuals making choices. However the circumstances of these choices is not a choice. Choices are made within a pre-existing system of production which has its own laws of motion, laws that take on a character of objective independence from society. As long as the capitalist mode of production exists these laws act in the same way as a law of nature: they are inevitable, unbreakable and proceed free from the actions of humans. Because relations between producers are not direct, because they are mediated through the value relations between objects, these value relations take an independent form, an autonomous force that regulates production outside of the control of the producers. This is why Marx was highly critical of proposals to modify surface features of capitalism without doing away with the system of indirectly social labor that lay at the root of capitalist production. Individuals, groups and states cannot run capitalism. Capitalism runs people. This is an inescapable aspect of indirectly social labor.


I take his intention was to theorize it as to make explicit it's dynamics in order to see how it is to be consciously overcome. But modern economics isn't concerned with getting past capitalism and so it suffices to merely consider price and supply in regards to consumers and its to be deified as the best means to meet the demands of consumers, but of course only within the logic of capital. Our freedom is as consumers to satisfy the flow and expansion of capital.
https://kapitalism101.wordpress.com/2011/11/15/law-of-value-8-subjectobject/
If value is entirely subjective then we also can have no theory of exploitation. The division of the social product into wages of workers, profit of capitalists and rent to landlords is not explained by the power of these social classes. Instead it is seen as the result of purely technical factors, like the scarcity of inputs relative to the subjective decisions made by workers and capitalists as they enter into free contracts. Rather than a theory of classes, we have a theory of pure individuals, all seen as equals in the market. And since individuals have always had subjective values the subjectivists can argue that capitalism is the expression of universal human characteristics and not a particular historical form subject to change.

It certainly is true that when we go to the grocery store to spend our meagre wages we get to choose between Coke and Pepsi. But if this sort of choice is the ultimate horizon of human freedom then we really haven’t achieved much as a species. While subjectivists busy themselves with complex models of consumer behaviour as we choose between Coke and Pepsi, they miss the fact that these choices happen within the context of larger institutional arrangements which we have no choice over at all. It is these larger structures that Marx is interested in: private property, wage-labor, commodity exchange, and the law of value. For Marx the market is a place where blind economic laws dominate over us, where subjects are powerless and where objects like money and commodities are imbued with social powers. We are all hyper-aware of this fact today as we watch the most powerful people and states in the world flounder helplessly in the face of this economic crisis. The Law of Value commands, people obey.


All this I've posted mostly to summarize the basic point that I think the same fundamental differences and issues exist as they did back in the day. Which isn't that there haven't been developments in economics and such, but rather the core remains the same and has worked within those limits. And I'm getting the sense that that which Marx seemed concerned with often interpreted in relation to an approach to the economy that isn't founded on the same focus, reasoning and so on. It seems that modern economics is certainly great in theorizing pricing and other stuff, but as a theory of capitalism itself it has necessarily blocked out things. As my impression is, Marx didn't do anything that alien and worked within the same realm as Adam Smith and David Ricardo but was able to go further than they and it lead to his radical conclusions which substantied his theory of exploitation and such. So that path was denied a place even though folks like Adam Smith were concerned with it.
I'm still fresh so I could be misunderstanding, but that seems to be the summary I seeing.
#14828407
But modern economics isn't concerned with getting past capitalism


Modern economics starts by trying to understand what's going on now, which is a daunting enough task without asking they create a whole new system based on different principles. I think a fundamental flaw of communism as implemented in actual economies is the arrogance to believe that we could do so with out understanding how the current one organizes resources.

Your trying to build a rocket to the Moon without having figured out what the acceleration from gravity is.

In the end all the revolution were drawn back by the gravitational force of the economy into more capitalist lines, that's the fundamental failure of the Soviet Union and the surrendering of China to state capitalism.

As for value, that's such a subjective thing. When you talk about it being based on labor it seems to me that your just moving the problem over a bit. How do you measure the value of labor? By the hour? How do you know the value of that hour? What if one worker works slightly harder in that hour, is it worth more?

I think comparing the preferences people have between two things is probably as close to measuring value as you can get. Besides just the actually dollar cost of goods on the market of course. Value is subjective and people aren't particularly rational about their valuations sometimes.
#14828728
mikema63 wrote:Modern economics starts by trying to understand what's going on now, which is a daunting enough task without asking they create a whole new system based on different principles. I think a fundamental flaw of communism as implemented in actual economies is the arrogance to believe that we could do so with out understanding how the current one organizes resources.

Your trying to build a rocket to the Moon without having figured out what the acceleration from gravity is.

In the end all the revolution were drawn back by the gravitational force of the economy into more capitalist lines, that's the fundamental failure of the Soviet Union and the surrendering of China to state capitalism.

As for value, that's such a subjective thing. When you talk about it being based on labor it seems to me that your just moving the problem over a bit. How do you measure the value of labor? By the hour? How do you know the value of that hour? What if one worker works slightly harder in that hour, is it worth more?

I think comparing the preferences people have between two things is probably as close to measuring value as you can get. Besides just the actually dollar cost of goods on the market of course. Value is subjective and people aren't particularly rational about their valuations sometimes.

That's probably a large topic in itself about the USSR and certain figures.
In that I imagine if there is someone who is criticized, its those that for the sake of propaganda pushed things beyond the acceptable limits of reasonable interpretations of Marxist analysis.
See how people speak of Lenin not admitting that they had created socialism, the common phrase of deformed workers state with a beaucratic twist and such. Where under Stalin things end up being asserted as having already achieved socialism in spite of the inadequacies.
I do see a point made of how they accept the law of value that is positioned by someone as having to be over turned in order to begin building a classesless society.
Spoiler: show
https://kapitalism101.wordpress.com/2012/08/23/law-of-value-9-abstract-labor/
For the market-socialist vision, it seems that all we need to do is replace the class-relationships in the workplace with a cooperative workplace, leaving market exchange in tact. But such a cooperative society would still have wage labor, socially necessary labor time, value in the abstract, and abstract labor. Cooperatives would still be compelled by competition to produce surplus value in order to expand production and stay competitive. Production would still be for the sake of producing surplus value, and not for the sake of bettering society. It is probable that the most efficient and successful firms would be those with the least cooperative structure and the highest disciplining of labor.

For the 20th century communism of the USSR and China it was initially the seizure of state power by a vanguard of the working class, the nationalization of property, internationalism and the administration of production by a plan that was thought to be sufficient to break with the capitalist mode of production. Yet the plans of the planners soon began to resemble the most despotic plans of the capitalist workplace. In order to compete in the world market planners found that they needed to extract the highest amount of surplus value from workers as possible. There was still wage labor, socially necessary labor time, surplus value and abstract labor. The same year the conveyor belt was introduced to Soviet Russia they revised their textbooks to claim that the law of value applied to socialism.

https://kapitalism101.wordpress.com/2014/07/02/indirectly-social-labor/
The distinction between this humanist reading and the circulationist reading still may seem trivial. After all, SNLT only exists because we produce for exchange. Exchange plays a vital role in the process of regulating labor in a capitalist economy where private labors happen in relative isolation from each other. However the distinction becomes more crucial once we consider the nature of labor in the state-planned economies of the USSR. Soviet economists claimed to operate under the law of value, to produce commodities, similarly to capitalism. However they also claimed that they were doing so consciously, using the law of value to their advantage, as a conscious tool of state planning. This meant, according to Soviet economists, that while other categories of capitalist production may have been at play, labor was directly social. It was directly social because it was planned by people, not blind economic forces. This was meant to prove the socialist nature of their state-planning.10

But if we understand indirectly social labor to be the result of socially necessary labor time then it does not matter whether this labor’s social nature is realized by a market or by a plan. What gives it its indirectly social nature is the fact that one hour of my work is not worth as much as another’s. Labors are not treated equally. Instead a process of social averaging takes place which rewards some labors and punishes others. The mechanism which realizes or reinforces this does not alter matters. This argument has been used to argue that the USSR was actually a state-capitalist society, not a communist society. Such a claim requires an empirical analysis of the organization of the USSR, something outside the topic of this book. [cite mh and ticktin] What is important for our purposes here is to show the relevance and importance of the category of indirectly social labor. It is clearly a central concept to grapple with if we are to know how not to repeat the mistakes of the USSR as well as know how to build a real communist society in the future.

Of much concention was of course whether they could steer things towards socialism and thus warrant their revolution in spite of a capitalist class not having industrialized the country. But whether that was viable seems contentious now since the 'true believers' and adherents to such a goal are replaced by careerists/capitalist roaders. That it's dubious whether over such a long period of time such an end goal was practical which doesn't necessarily make somehow their pursuits unwarranted and illegitmate because when one looks to the places in which socialists/communists took over. The conditions were ripe for revolution regardless, the brutality of the backwards Tsardom was going out one way or another.

But in regards to your point of attempting to 'build a rocket to the Moon without having figured out what the acceleration from gravity is'. My impression this is exactly what modern economics isn't trying to progress, that the impression I've taken is that it has confined itself to the task of apologetics in it's avoidance of the questions considered by political economists such as Adam Smith and David Ricardo.
This might be an incorrect impression, but it would have to be argued that they're undergoing a progressive development in economic theory. Because there have been some useful developments surely, but it's within a particular confine as it has been explicitly restricted within certain limits.

To which I also take the impression that Marx's work sought to reconcile the one sidedness of political economists like David Ricardo who saw the value of labor in production, with the demand side of consumers leading to a sole emphasis on subjective theories of value.
http://libcom.org/files/marx,%20marginalism%20and%20modern%20sociology%20-%20clarke.pdf
As Engels argued in his early critique of political economy, the ‘labour theory of value’ derives the value of the commodity one-sidedly from the relationship between the commodity and the labourer as producer, the theory of utility derives it equally one-sidedly from the relationship between the commodity and the purchaser as consumer. In each case the value of the commodity appears to be independent of the social relations of production: the relations between people appear to arise because the commodity has a value, as product of labour, on the one side, and as object of desire, on the other. Hence the social powers of the commodity, that derive from the social relations of commodity production, appear to be inherent in the commodity as a thing. This is the origin of the ‘fetishism of commodities’.


And my impression of how the fella on that kapitalism101 site characterizes modern economists is that their approach abstracts relevant points about capitalism as it exists and treats trade in a way that it doesn't exist when mediated through market which is necessarily social. The market sets a standard of value for all products and mine can't be treated in the form of a direct trade as if not mediated through the values made equivalent between commodities in the market.
https://kapitalism101.wordpress.com/2011/09/30/marginal-futility-reflections-on-simon-clarkes-marx-marginalism-and-modern-sociology/
Marginalists begin with the isolated individual making choices in a vacuum and erect all of their basic ideas upon some simple observations about these choices. As the model becomes increasingly complex, adding in more people, more commodities, money, the division of labor, private property, etc. it is claimed that all of their basic observations still hold. The expansion of the model is seen as just a formal matter. But Clarke argues that when we move from individual exchange to a system of exchange we are actually dealing with different phenomenon. In a market economy exchange is no longer and exchange for direct utility; in other words, we aren’t measuring our actual utility for the commodity we give up with the utility for the commodity we buy. Money intercedes as a mediary. We exchange things against money. Use-values are exchanged for values which are socially determined. Any claim to the formal rationality of the individual’s behaviour becomes dependent upon the rationality of the system as a whole.

The existence of money demands that we immediately abandon the basic principles of marginal utility. In the simple barter models posed by marginalists both actors can fully judge the use-values of items they are trading. But when we are exchanging things for money we are not just trading two commodities in isolation. Money links each commodity to an entire of world of commodities. Now if it was possible to know the future values of all commodities then it would be possible to generalize the marginalist barter model into a theory of indirect exchange. But we don’t know the future values of things. These are entirely uncertain. In fact, If the values of all commodities were always known we wouldn’t need money because any commodity could serve as money. This compromises the entire marginalist model.

In other words, marginalism can only have a theory of indirect exchange (of commodities traded for money instead of commodities bartered with each other) is all parties have perfect information on prices. But if we make this assumption we can no longer explain competition (or money).

That it's my impression that the subjectivist theory of value comes about by considering trade between two individuals but entirely ignores the market which necessarily mediates people's exchanges and instead presents them as if they were trading directly.
That subjectivist theory of value seems applicable if a thing is being directly traded and considered in terms of individual value but in capitalism, things enter a market where it obtains a social value in that it's value enters into a relation to all other commodities. In such a way that one can ask that this amount of X is equivalent in value to this amount of Y.
Spoiler: show
https://kapitalism101.wordpress.com/2010/06/13/law-of-value-4-value/
One book= 1 car. What does that mean? What does it mean to say something is worth so much of something else? Some people think that the usefulness of a commodity can answer this. But uses of things can’t be compared. You read books. You drive cars. They are two totally unrelated and incomparable uses. Maybe you like books more than cars. Does this mean that books are worth more than cars? (1)
...
1. There have been attempts by neoclassical economists to reduce the usefulness of commodities to some common substance. Since there is no common substance that makes up usefulness they have to make up an imaginary substance called “utles”. These economists actually say things like, “A cup of coffee has 13 utles and a car has 3000 utles of utility”. But such attempts to invent imaginary substances with which to reduce utility to are generally thought to be pretty silly and misguided. In neo-classical economics this concept has been mostly replaced by the concept of rank preferences, or graded utility: A consumer has a ranking of demand preferences but these can’t be reduced to some common scale. In this way the question of value, in the sense that a commodity has a definite amount of value as determined by subjective social demand, is mostly abandoned: Commodities don’t have values, but consumers have preference rankings and these preference rankings result in prices. This approach conveniently eliminates many of the theoretical problems with earlier marginal utility theory (namely the unquantifiable nature of subjective utility), yet it has an inherent circularity: consumer preferences are not formed in a vacuum. They are formed on the basis of preexisting exchange ratios. As the prices of commodities change so do the preference rankings of commodities. So commodity prices must first be assumed in for marginalists to theorize the subjective processes of price formation. This is circular. The pink elephant in the room is the productivity of labor. As this productivity changes so do prices. There are a host of other criticisms lodged at Marginalism by Marxists. Perhaps sometime in the future I can write/produce more on the topic.

To which the mediator in all of this is money which is a universal value which all commodities compare themselves to. Every commodity is worth a particular amount of money. But money only has value in a market economy, because money not put in relation to a market of commodities in relation to one another of having some set standard of being value as X amount of other commodities would lose it's mediatory role.
Spoiler: show
http://libcom.org/files/marx,%20marginalism%20and%20modern%20sociology%20-%20clarke.pdf
Examination of exchange as a social relation makes it clear that the commodity which acts as the equivalent for my commodity does not appear as a particular commodity in the exchange relation, but represents the social world of commodities in which my commodity has to play its part. Thus the equivalent commodity appears in the exchange relation as the embodiment of abstract labour, a portion of the labour of society as a whole, and my commodity seeks to represent its value in the bodily form of the equivalent. It is only within the exchange relation, within which the other commodity acts as equivalent, that the latter has this social power. Outside that relation, and its role of equivalent, it is simply a particular commodity like any other. The conclusion of Marx’s analysis of the equivalent form is that any commodity can act as equivalent, and that money is indeed simply a commodity like any other. However the properties that are attributed to money as the universal equivalent, the embodiment of human labour in the abstract, are not inherent in money as a particular commodity. They are properties that derive from money’s social role as equivalent, as properties of the equivalent form.

If we consider money in isolation from the form of exchange we fall into the errors of the political economists. The mercantilists thought that gold embodied value in itself. For them, therefore, the exchange-value of a commodity was determined solely in the market by the relation established between the particular commodity and money as the substance of value: the value of a commodity was the amount of money for which it could be exchanged. Classical political economy ridiculed the monetarist superstition, noted that gold was a commodity like any other, and so argued that exchange-value is simply the ratio of the values of two particular commodities, one of which happens, for convenience, to be gold. For monetarism and mercantilism the exchange-value of a commodity was the accidental relationship established in the market. For the classical school value was immanent in the commodity, and the market was simply the arena in which value expressed itself.

Marx insisted that neither of these conceptions of exchange, and so of money, was adequate. Classical political economy was right to note that the money commodity was a particular commodity like any other. But the monetarists were right to note that money appeared in exchange not as a particular commodity, but as a universal, as the embodiment of value. The paradox is resolved when it is realised that money acquires its powers not through its own properties, but because of its social role in the system of exchange. It is only in its function as universal equivalent that money comes to acquire its power as embodiment of value. This power can consequently only be a social power, the relationship of the commodity to money can only express a social relation, and the development of money is the result of the development of the social relations of commodity production.

The social relation that is expressed in the form of money is the relation between the labour of the individual and the labour of society. It is by submitting the commodity to the test of the market that private labour is submitted to the test of its social usefulness and of its social necessity and that it seeks validation as abstract, social labour. In this relationship there is no guarantee that the individual labour will be validated in this way, so there is no guarantee either that the labourtime socially necessary will correspond to that actually expended or that the labour will prove socially useful in responding to social need as expressed in the market

You don't barter with someone in direct trade between a set of books with their fruit. To which you're considering the use value of those books directly to how you can use the fruit. Which sounds fitting for subjectivist theory I believe. That this is what seems to be expressed in the grading of preferences based on the use-value of things. I consider the use-value of things, but such bartering doesn't exist when one is trading things based on money. You can still barter with people, but most likely you look for money which can be exchanged for all other commodities.

The transition from individual value to social value is the point of interest for Marx.
Spoiler: show
https://kapitalism101.wordpress.com/2010/05/13/law-of-value-3-das-mudpie/
This is a very different type of social labor than in pre-capitalist societies. Rather than being directly social, capitalist labor is indirectly social. People don’t directly decide what to produce. Instead these decisions are made through the fluctuations of market signals, a constant back and forth of buyers and sellers. But these market signals aren’t some autonomous power. They are composed of the aggregate individual labors of millions of separated producers. This separation of production and consumption means that our labor has both an individual value and a social value. The individual value is the amount of work that actually goes into making something. The social value is the actual amount of value the commodity sells for when it enters the market.

Because producers are separated from each other by the market, because we have no collective control over production, we have no way of knowing, for sure, how much labor time society requires of us and what sort of labor it should be. We don’t know what the demand will be for our product. We don’t know how much of the product other producers are making. We have to guess these things. We only find out once the products of our labor meet the products of everyone else’s labor in the market. This means that the individual value, the amount of time an individual puts into making a commodity, and the social value, the amount of time society requires go into it, can differ.

If individual value and social value diverge what does this mean? Some people think that Marx held that individual value had to equal social value, that if I spend 15 hours making a sandwich then this has to be the value of the sandwich. But this is not at all what Marx argued. Marx wanted to show how individual values become social values in a market society. Unlike other forms of production in which we labor directly for use, in a capitalist society we labor to produce value. Yet society must still use the products of our labor. We can’t all make the same thing or all make useless things. Labor must be apportioned between the right tasks in the right proportions. Value is the mechanism that does this since value is the only connection between individual laborers. Marx sought to explain how value acted as a force for the regulation of individual labor, turning individual labor into social labor.

[The fact that social value differs from individual value is not a defect to Marx’s analysis. It is the mechanism by which value asserts itself. How else could labor be apportioned between tasks in a society where labor is only indirectly social? The very fact that we have a field called economics in the first place is because the transformation of private labor into social labor is a mysterious, invisible one, it’s law-like properties hidden behind constant fluctuations of market prices.]

The fact that we discover the social value of our individual labor in the market creates the illusion that it is the market itself which is creating value. We bring the objects of our labor to market and there they are turned into money, making it seem like the subjective decisions between buyers and sellers are what create these money prices. This is what is being insinuated by the Mudpie argument: that it is the subjective valuation of the usefulness of a commodity that determines its value, not the labor that goes into it. Yet this is an illusion, a fetish created by the fact that our labor is indirectly social.
...
Thus the transition from individual value to social value isn’t a random one. It has law-like properties that govern the connection between the private laborers of millions of individuals and the aggregate social labor process. These law-like properties that link our private laborers to their social value is what Marx calls the “law of value.” There are two basic forces that govern the way individual values become social values:

1. The first is average productivity. Let’s say the average widget maker takes 1 hour to make a widget. This social average is the social value of the commodity: the amount of time society requires to make a widget. But I am old and slow. I take 3 hours. This is the individual value. My individual value is higher than the social value. But that doesn’t mean I can sell my widget for more. I must sell at the social average. Marx calls this “socially necessary labor time”. In this case the determination of social value is made not by my individual labor time, but by the average productivity of society. If the socially necessary labor time changes due to changes in productivity then the individual value and social value will change too.

2. The second factor is the interaction of supply and demand. Supply is determined by the total amount of labor that goes into making widgets and the productivity of that labor. But when we go to the widget factory to work we do not know how much labor as a whole society is devoting to making widgets. There could be a million other people making widgets or only a few. We only learn how much labor society has put into widget making when we enter the market and compare the products of our labor with the rest of society. If too much labor goes into widget making then there is an over-supply of widgets. Their social value falls below their individual value. [The private labor of widget makers counts as less social labor.] If not enough work has gone into widgets there is an under-supply and their social value rises above the individual value. [The private labor of widget makers counts as more social labor.] This fluctuation of social value around individual values is what allows labor to be apportioned.

But what of demand? Isn’t demand a random subjective element in the equation? As we will see later on the video on Supply and Demand, demand traces its power back to the labor process as well. Demand isn’t just an abstract psychological substance. It is a definite amount of purchasing power made of of worker’s wages and capitalist profits. Even the things demanded, be they inputs for the production process, or subsistence goods for maintaining the worker are needs generated by the structure of production. People’s demand for things change as the value of those things change. When the average productivity of widgets rises, their value falls and the demand for them rises because now they are cheaper. So rather than demand existing in some subjective vacuum, it is is always dependent on a preexisting world of values. But most important to the MudPie theory, demand doesn’t create the social value of a commodity. It only helps determine if labor has been apportioned to the right tasks. Labor is creating the value. Labor is doing the work. Demand tells us if this labor has been socially useful. But demand can’t create commodities, nor can it be separated from the web of social labor.

https://kapitalism101.wordpress.com/2010/09/21/law-of-value-6-socially-necessary-labor-time/
1. Here is another example of the way in which individual value and social value diverge. Many times lay-critics of Marx (like the trolls often found stalking this blog) think they can “disprove” Marx’s theory of value by pointing to instances where the individual value of a commodity (the amount of time an individual put into making it) diverges from its social value. But as we can see such deviations are a central part of Marx’s theory. In fact it is these deviations of individual value from social value that create the dynamism and disequilibrium that Marx was so intent on theorizing. It is important to constantly point this out as many lay objections to Marx’s theory of value come form the misconception that social value and individual value must always coincide.

This is also used to explain that whilst you might take longer to produce something, it doesn't get to be sold for more on the market, because the value of things is based on the 'socially necessary labor time' which is an average of how efficient production between all producers who enter the market with their product.
https://kapitalism101.wordpress.com/2014/07/02/indirectly-social-labor/
Earlier we used a similar example of a Wallmart executive finding the average cost of of producing a commodity to set the price of the commodity. This example demonstrated how this process of averaging, which determines the socially necessary labor time, erases all particularity of workers, treating individuals only as units of average labor time, as abstract labor. Here, in our example of a communist society with directly social labor, we also see an example of the ‘prices’ of goods being calculated through a similar calculation of average labor time. What is the difference between these two examples? The difference is that Wallmart pays the same price for all of the commodities it buys from suppliers and those suppliers in turn only pay workers to the extent that they can produce at the social average. Any wasted time is not compensated. This creates an incentive for speed-up, exploitation, and the domination of machines over humans in production. In our communist society workers are compensated for the actual amount of time they labor, not just the part that achieves the average. This means that their labor is directly social. The immediate practical implications of this are that there is not an incentive for speed-up and so machines do not loom over production demanding more and more life from the worker.


I haven't actually engaged in much in regards to Marx's work on the political economy to follow how he sees the relation between things, but I think it might be useful to check out the work of Evald Ilyenkov.
Because I think it helps to situate how there can be a perception of things in something that isn't empirically within the object, money comes to represent things which it as an object it doesn't contain, value that is derived from it's real world relations and not within itself.
Spoiler: show
https://www.marxists.org/archive/ilyenkov/works/ideal/ideal.htm
But here we are immediately confronted with the trickiness of this distinction, which is fully provided for by the Hegelian school and its conception of the “materialisation”, the “alienation”, the “reification” of universal notions. As a result of this process which takes place “behind the back of the individual consciousness”, the individual is confronted in the form of an “external thing” with people’s general (i.e., collectively acknowledged) representation, which has absolutely nothing in common with the sensuously perceived bodily form in which it is “represented”.

For example, the name “Peter” is in its sensuously perceived bodily form absolutely unlike the real Peter, the person it designates, or the sensuously represented image of Peter which other people have of him. The relationship is the same between the gold coin and the goods that can be bought with it, goods (commodities), whose universal representative is the coin or (later) the banknote. The coin represents not itself but “another” in the very sense in which a diplomat represents not his own person but his country, which has authorised him to do so. The same may be said of the word, the verbal symbol or sign, or any combination of such signs and the syntactical pattern of this combination.

This relationship of representation is a relationship in which one sensuously perceived thing performs the role or function of representative of quite another thing, and, to be even more precise, the universal nature of that other thing, that is, something “other” which in sensuous, bodily terms is quite unlike it, and it was this relationship that in the Hegelian terminological tradition acquired the title of “ideality”.
...
Here ideal form actually does stand in opposition to individual consciousness and individual will as the form of the external thing (remember Kant’s talers) and is necessarily perceived precisely as the form of the external thing, not its palpable form, but as the form of another equally palpable thing that it represents, expresses, embodies, differing, however, from the palpable corporeality of both things and having nothing in common with their sensuously perceptible physical nature. What is embodied and “represented” here is a definite form of labour, a definite form of human objective activity, that is to say, the transformation of nature by social man.

It is here that we find the answer to the riddle of “ideality”. Ideality, according to Marx, is nothing else but the form of social human activity represented in the thing. Or, conversely, the form of human activity represented as a thing, as an object.

“Ideality” is a kind of stamp impressed on the substance of nature by social human life activity, a form of the functioning of the physical thing in the process of this activity. So all the things involved in the social process acquire a new “form of existence” that is not included in their physical nature and differs from it completely – their ideal form.
...
It is “ideal” because it does not include a single atom of the substance of the body in which it is represented, because it is the form of quite another body. And this other body is present here not bodily, materially (“bodily” it is at quite a different point in space), but only once again “ideally”, and here there is not a single atom of its substance. Chemical analysis of a gold coin will not reveal a single molecule of boot-polish, and vice versa. Nevertheless, a gold coin represents (expresses) the value of a hundred tins of boot-polish precisely by its weight and gleam. And, of course, this act of representation is performed not in the consciousness of the seller of boot-polish, but outside his consciousness in any “sense” of this word, outside his head, in the space of the market, and without his having even the slightest suspicion of the mysterious nature of the money form and the essence of the price of boot-polish.... Everyone can spend money without knowing what money is.

To which it is summarized in the early sections of Ilyenkov's work that Marx, as influenced by Hegel, doesn't stand in the traditional materialist vs idealist paradigm in that he seems to treat that there can be an ideality that exists not in a material form but as an expression of the relations of a thing, it's essence.
Spoiler: show
http://69.195.124.91/~brucieba/2014/04/13/ilyenkovs-dialectic-of-the-abstract-and-the-concrete-i/
It is a mistake to conceive thought as a separate entity from empirically presented facts in this view and it is the specific task of logic to move from the abstract contemplation of notions or concepts of the empirically presented facts to work out an abstraction that would express the essence of the presented facts given in our notions and concepts. The problem is in drawing out the generalised expression of the real nature of the object under investigation from the empirically obvious facts. This is far from straight forward and constitutes the real challenge in dialectical logic.

For Hegel the essence or content of objects of investigation cannot be known by examining them in isolation. The thing cannot be known in itself as its essence exists outside of itself and in relation to, or in its connectedness with, other objects or phenomena. As Ilyenkov explains:

“That is why a concept, according to Hegel, does not exist as a separate word, term, or symbol. It exists only in the process of unfolding in a proposition, in a syllogism expressing connectedness of separate definitions, and ultimately only in a system of propositions and syllogisms, only in an integral, well-developed theory. If a concept is pulled out of this connection, what remains of it is mere verbal integument, a linguistic symbol. The content of the concept, its meaning, remains outside it-in series of other definitions, for a word taken separately is only capable of designating an object, naming it, it is only capable of serving as a sign, symbol, marker, or symptom.”

And I think this is crucial, to abstract a thing away from it's relations is to make it a contentless abstraction, it loses its sense of being a determinant thing. Quite often people have been baffled in their attempt to find the essence of a thing within the thing itself but to no avail, the see things in an object that isn't within the empirical object itself, which are treated as superflous subjective projections. But money doesn't lose its value because one posits that it's a social construct or something, it's value really exists in the real world in some sense, external to your perception of it whilst contingent on you as a perceiving subject.

Hegel's view that hte essenc eof a thing is in it's relation seems pivotal, as part of his critique of the empty (lacking sensuous content) formalism of Kant I believe.
Spoiler: show
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More intriguingly yet, Hegel Hegel’s account of essence rejects all transcendence in favor of appearances. For Hegel there is not one thing, essence, and another thing, appearance such that essences are transcendent to beings like Plato’s forms, or are unchanging and invariant like Aristotle’s essences. Rather, it is appearance all the way down and there is no further fact “beyond” the appearances that is hidden and that must be discovered or uncovered. Hegel will say, “Essence must appear.”4 The real surprise is that the mediation of essence is a reference to another appreance, not a distinct ontological entity to be contrasted with existence. Indeed, in the Science of Logic, Hegel argues that essence is relation. Thus, as Hyppolite recounts, “The great joke, Hegel wrote in a personal note, is that things are what they are. There is no reason to go beyond them.”5

This is a striking claim that immediately brings Lacan’s discussion of objet a in The Four Fundamental Concepts of Psycho-Analysis to mind. There Lacan recounts the story of two artists named Zeuxis and Pharrhosios, locked in competition with each other to see who is the better artist. Lacan remarks that,

"In the classical tale of Zeuxis and Parrhosios, Zeuxis has the advantage of having made grapes that attracted the birds. The stress is placed not in the fact that the grapes were in any way perfect grapes, but on the fact that even the eye of the birds was taken in by them. This is proved by the fact that his friend Parrhosios triumphs over him for having painted on the wall a veil, a veil so lifelike that Zeuxis, turning towards him said, Well, and now show us what you have painted behind it. By this he showed that what was at issue was certainly deceiving the eye (tromper l’oeil). A triumph of the gaze over the eye.6"

The lesson to be drawn from this little parable is that the cause of desire-- not the object desired - -is precisely this enigma of what is behind the veil or curtain. As Lacan will recount elsewhere in The Ethics of Psychoanalysis, we can be naked precisely because we wear clothing. “Doesn’t she know she’s naked under those clothes!” What we have here is the logic of the secret or crypt. Analysis comes to an end when objet a falls away and the analys and no longer attributes a secret knowledge to the analyst. Similarly, it can be said that metaphysics too needs to undergo analysis insofar as all too often it posits a true reality behind appearances in precisely the same way that Zeuxis believes there is something behind the veil painted on the wall.
...
The point here is that the very idea of the thing-in-itself contains an internal contradiction insofar as it calls us to think a thing without determination, yet the very nature of a thing is to contain determinations. In the Phenomenology, Hegel shows that the distinction between the unknowable thing-in-itself as conceived by Kant and appearance is itself a distinction of the understanding, and therefore a product of thought.8 It is nothing but the ego’s reflection of itself into an other.
That is, the thing-in-itself is identical to the ego, as a substrate divested of all concrete properties or qualities, a pure void as Hegel puts it, and therefore a phantasm of thought much like Zeuxis asking what is behind the veil.


A perfect example of this attept to find the essence within something rather than in it's relation can be seen in gender essentialism.
http://www.nyu.edu/classes/jackson/future.of.gender/Readings/DownSoLong--WhyIsItSoHard.pdf
Consider another example showing how beliefs about sex differences cloud people's analytical vision. How often have we heard question like: will women who enter high-status jobs or political positions end up looking like men or will the result of their entry be a change in the way business and politics is conducted? Implicit in this question are a set of strong assumptions: men have essential personality characteristics and cultural orientations that have shaped the terrain of high status jobs and women have different essential personality characteristics and cultural orientations. The conclusion is that and women's entry into these positions unleashes a conflict between their feminine essence and the dominant masculine essence that has shaped the positions. Either the positions must change to adapt to women's distinctive characteristics or the women must become masculine. (It is perhaps telling that those who raise this issue usually seem concerned only with women entering high-status positions; it is unclear if women becoming factory workers are believed immune or unimportant.) The analytical flaw here i assuming that masculinity has shaped the character of jobs rather than that jobs have shaped masculinity. In her well-known book Men and Women of the Corporation, Rosabeth Kanter argued persuasively that the personality characteristics associated with male and female corporate employees really reflected the contours of their positions. The implication is simple and straightforward. Women who enter high-status positions will look about the same as men in those positions not because they are becoming masculine, but because they're adapting to the demands and opportunities of the position, just like men.


I hope some of this makes sense, I don't think it necessarily does with immersing self in it, it's not something that read and light bulb goes off.
It took me some time to get a sense of Ilyenkov's sense of ideality but I found it incredibly satisfactory in situating how there are things that aren't sensuous things in being perceivable but aren't merely abbe rations of the mind but are a kind of real objective ideality.
Which gets into how our knowledge of things necessarily entails our subjectivity. Which is a difficult subject in it's own way of how life experience and our interaction with the world and people impacts our consciousness. Something I hope to explore Lev Vygotsky to really get a sense of activity underpining consciousness. To which it becomes objectified in concepts, tools and objects which are carried on through the years and built upon by future generations. That man's development has a historically contingent character to it based in the social organization we exist within. As such, whilst there is an enduring and permanent humanity, its particularities are historically contingent to the social relations we are in. Which relates to a good point against the way in which human nature is inadequately conceived by many and often universalizes the particularities of people as they exist under capitalism or as an ideal capitalist subject as if it were true of humans across all societies in history.
To which I recommend another Ilyenkov paper to understand how Marx conceives of the universal as a real existing thing that underpins the particularities of individuals across time.
Another approach might be Andy Blunden's How we can grasp a process as a whole.
I like recommending Ilyenkov because dude is frigging amazing in how he synthesizes and explains thing, truly phenomenal thinker considering the conditions under which he worked (he's considered a dissident as most thinkers in the USSR were not really Marxian but more positivists). This may all seem distant to the topic at hand, but I find his works crucial to grounding a philosophical perspective that helps to make sense of Marx a great deal.
#14829950
@Wellsy

Commodities don’t have values, but consumers have preference rankings and these preference rankings result in prices. This approach conveniently eliminates many of the theoretical problems with earlier marginal utility theory (namely the unquantifiable nature of subjective utility), yet it has an inherent circularity: consumer preferences are not formed in a vacuum. They are formed on the basis of preexisting exchange ratios. As the prices of commodities change so do the preference rankings of commodities.


That's why I said you should look into behavioral economics, there's a large literature on reference-dependent preferences for example.

They are formed on the basis of preexisting exchange ratios. As the prices of commodities change so do the preference rankings of commodities.


That is quite a claim to make. It is true of positional goods to the extent its desirability is based on its price.

Wellsy wrote:..modern economics still confines itself to a narrow focus..


Silly. The field of economics today is vast and it's not only a "theory of capitalism". The contribution of classical economists is miniscule.

Wellsy wrote:And I'm not sure if I get the question, but my impression is that you're seeking for some comparable element in Marx's work that's like the the social welfare function in which the relation of utilities to one another.


Let me put it this way: Your supply curve is determined by production technology (regardless of whether a competitive market or a social planner is responsible for production). But what determines your demand curve? If not individuals based on their preferences (which at least suggests Pareto efficiency under certain basic axioms), what else? On the basis of what assumptions about preferences (you need to make assumptions about human behavior here, you cannot just ignore the problem)?


Unrelated to that, let me quickly come back to the labor theory of value, because I haven't answered that properly. I previously said it is "obviously wrong" if you factor in natural resources, that is not exactly correct. The LTV states that the exchange value of a good equals the labor that was required for its production (expressed in time and quality). So we can see the stock of resources as the accumulated labor used in their extraction in the same way capital can be seen as accumulated labor used in its production. Intuitively I see two issues: It only makes sense if you look at a perfectly static economy (no technological change, discovery of new resource deposits, changing consumer preferences). But more importantly, it ignores time preference. To give an example, 10 units of a consumption good at time t will command a higher exchange value than the machine that produces 10 units over the next 10 periods (and depreciates over that time) at time t.
#14830201
@Rugoz

I have a question for you Rugoz. It says on your profile that you are libertarian. However libertarianism is a very broad political category that contains many political ideologies and I would like to know which political ideology you adhere to. In other words, I would like to know what "flavor" of libertarianism you have taken a liking to.
#14830282
Oxymandias wrote:@Rugoz

I have a question for you Rugoz. It says on your profile that you are libertarian. However libertarianism is a very broad political category that contains many political ideologies and I would like to know which political ideology you adhere to. In other words, I would like to know what "flavor" of libertarianism you have taken a liking to.


I'm definitely not a libertarian, I've never been one. No idea why it was in my profile. Probably fooled around.
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