Which Market Process Theorist Said This?

by Gene Callahan

No fair googling!

‘Continual deviations of the prices of commodities from their values are the necessary condition in and through which the value of the commodities as such can come into existence. Only through the fluctuations of competition, and consequently of commodity prices, does the law of value of commodity production assert itself and the determination of the value of the commodity… become a reality. To desire, in a society of producers who exchange their commodities, to establish the determination of value by labour time, by forbidding competition to establish this determination of value through pressure on prices in the only way it can be established, is therefore merely to prove that, at least in this sphere, one has adopted the usual utopian disdain of economic laws… competition, by bringing into operation the law of value of commodity production in a society of producers who exchange their commodities, precisely thereby brings about the only organisation and arrangement of social production which is possible in the circumstances. Only through the undervaluation or overvaluation of products is it forcibly brought home to the individual commodity producers what society requires or does not require and in what amounts. But it is precisely this sole regulator that the utopia[n]… wishes to abolish. And if we then ask what guarantee we have that necessary quantity and not more of each product will be produced, that we shall not go hungry in regard to corn and meat while we are choked in beet sugar and drowned in potato spirit, that we shall not lack trousers to cover our nakedness while trouser buttons flood us by the million [the utopian] triumphantly shows us his splendid calculation, according to which the correct certificate has been handed out for every superfluous pound of sugar, for every unsold barrel of spirit, for every unusable trouser button, a calculation which “works out” exactly, and according to which “all claims will be satisfied and the liquidation correctly brought about”.’

18 thoughts on “Which Market Process Theorist Said This?

  1. Karl Marx?

    So where did he go wrong?

    Maybe he never looked out the window, all his so-called research on the condition of the English workers was second hand and false.

    On a related topic, when and why did modern mathematical economists stop looking out the window?

  2. Okay, after getting the answer above I cheated and searched. Quite amazing stuff (Marx’ discussion of value, commodities, and price). I wonder if his modern day advocates have read any of this (obviously I haven’t). With a grip on the value of commodities and labor Marx finds fault with the accumulation of capital and using it to manipulate labor? I’d be very interested in hearing someone answer Rafe’s first question. [Since I cheated I won’t say where this quote is from].

  3. BTW You can quibble about the outcome of Marx’s research but you can’t blame the government for funding it, he demonstrated the Kealey thesis that we can get all the research we need funded by the private sector.

  4. Sorry, had to look since it peaked my interest and wanted to know NOW-damn it. lol

    A startling quotation from
    Formatting sucks on that page but I think we get the idea…

    For the record I was wrong also, but had no clue. Yes, Marx was the obvious choice but reading some of his works, I did not think it was him-unless lost in translation.

  5. I thought Marx committed himself to a labor theory of value in Capital?Maybe Engels was the better economist of the pair!

  6. Marx’ take on the the fluctuation of prices around the value of a commodity is very similar to Engels’. Engels seems pretty well read. Embedding this in “class theory” (for want of a better term) seems to lead them from agreeing to A. Smith (more or less) about prices and value to non-intuitive (for me) conclusions.

  7. It’s funny I just read this opening sentence:

    Continual deviations of the prices of commodities from their values are the necessary condition in and through which the value of the commodities as such can come into existence.

    …and thought, “It has to be a classical economist, and for irony I’m guessing Gene picked Marx.”

    That’s all I read, and then I couldn’t understand why all of you were raving about such nonsense in the comments. I mean, prices deviating from values, but needing competition in order for the values to exist in the first place? What the heck??

    But then I went back and read the rest of it; I see why everyone liked it. 🙂

  8. How do Marxists reconcile this with the rest of their views? Or at least how did Engels do it?

    Engels himself wrote: “Society can easily determine how many hours of labour there are in a steam engine, how many in a hectolitre of wheat of the last harvest, how many in a hundred square yards of cloth of a given quality.”

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