That looks remarkably like rhetorical obfuscation.
BTW, I think this is the Mattick piece in question.
With the emergence of the subjective theory of value, which ultimately ended in a hypostatization of prices, the bourgeois theory of value cut itself loose from all its former ties with classical monetary theory. Clearly the theory of marginal utility is inapplicable to the exchange value of money, since it cannot be determined by the subjective needs of consumers, as can the exchange value of other commodities, but is in fact juxtaposed to these needs as an already given objective value. There have been attempts, most notably by Ludwig von Mises,[1] to give the objective exchange value of money a subjective foundation by assuming that whatever the objective exchange value of money at the given moment, it always rested on prior subjective evaluations, which may be verified by tracing the development of money historically back to moneyless barter. But the derivation of money from a moneyless economy convinced few, and the attempt to define the value of money subjectively was given up.
It was not long until the entire theory of marginal utility was abandoned, since it obviously rested on circular reasoning. Although it tried to explain prices, prices were necessary to explain marginal utility. It was then decided that economic analysis did not need a special theory of value after all and could restrict itself wholly to the empirical magnitudes of money and prices. It would suffice, so it was claimed, to transform “marginal utility,” with its psychological underpinnings, into a logic of choices or marginal analysis to reduce all market relations to an all-embracing common denominator. Just as every individual presumably ordered his income and expenditures rationally by means of marginal calculations so as to achieve the greatest measure of satisfaction of his needs, so the universal application of this “economic principle” would not only ensure the greatest returns from the least investment, it would also lead to a general economic equilibrium in which social demand matched overall supply. If one abstracts from all other social relations and views human beings solely as buyers and sellers, one may in fact construct a price system in which an equilibrium between supply and demand is achieved by virtue of the relations existing among prices. However, that is all one would have – a construct having nothing to do with reality, and no more than a rehashing, by the device of marginal analysis, of Say’s discredited postulate that every supply produces its own demand. Say’s theory referred to a barter economy and not to a capitalist money economy; following suit, pure price theory also relegated money to a subordinate and incidental role, since, as merely the expression of price relations, it was already taken into account in the analysis of equilibrium.
And if it’s not still being reproduced? Why did the HTC Evo 4G drom $50-$100 in price the day the HTC Evo 3D come out? Why did the iPhone 3G drop $100 in price the day the iPhone 3GS came out and that one drop $150 the day the iPhone 4 came out?
It’s not just limited to phones. Why do brand new cars drop in price substantially when the next year’s models are released?
And if it’s not still being reproduced? Why did the HTC Evo 4G drom $50-$100 in price the day the HTC Evo 3D come out? Why did the iPhone 3G drop $100 in price the day the iPhone 3GS came out and that one drop $150 the day the iPhone 4 came out?
It’s not just limited to phones. Why do brand new cars drop in price substantially when the next year’s models are released?
Well, I think this would be a case where something is sold below its value. Value and price are not the same thing in Marx’s view. But price tends towards value in a free market. If a commodity becomes outdated, then selling it below its value is simply a way for businesses to cut their losses. The important thing here though is that the commodities are sold below the price of the new equivalents. The price of the new commodities, however, is not determined by the price of the old ones. So the theory avoids falling into circularity.
(I have not actually gotten to Capital, Vol. 3 yet, so I may be giving a slightly inaccurate description of Marx’s views.)
I just noticed that Kapitalism101 has an interesting video critique of the STV.
So when it becomes “outdated” (demand falls) prices are adjusted downward? I thought you said supply and demand don’t have an effect on prices.
So when it becomes “outdated” (demand falls) prices are adjusted downward? I thought you said supply and demand don’t have an effect on prices.
If I said that, I probably shouldn’t have. But being outdated means more than demand falling. It also means that it is not being produced anymore.
Anyway, I found something by Marx that shows his views on supply and demand (which I don’t necessarily agree with). His view seems to be that supply and demand can affect price but don’t affect value–that is, the equilibrium price.
…Now, in regard to wages and profits, Citizen Weston has not only failed to deduce such standard points from economical laws, but he has not even felt the necessity to look after them. He satisfied himself with the acceptance of the popular slang terms of low and high as something having a fixed meaning, although it is self-evident that wages can only be said to be high or low as compared with a standard by which to measure their magnitudes.
He will be unable to tell me why a certain amount of money is given for a certain amount of labour. If he should answer me, “This was settled by the law of supply and demand,” I should ask him, in the first instance, by what law supply and demand are themselves regulated. And such an answer would at once put him out of court. The relations between the supply and demand of labour undergo perpetual change, and with them the market prices of labour. If the demand overshoots the supply wages rise; if the supply overshoots the demand wages sink, although it might in such circumstances be necessary to test the real state of demand and supply by a strike, for example, or any other method. But if you accept supply and demand as the law regulating wages, it would be as childish as useless to declaim against a rise of wages, because, according to the supreme law you appeal to, a periodical rise of wages is quite as necessary and legitimate as a periodical fall of wages. If you do not accept supply and demand as the law regulating wages, I again repeat the question, why a certain amount of money is given for a certain amount of labour?
But to consider matters more broadly: You would be altogether mistaken in fancying that the value of labour or any other commodity whatever is ultimately fixed by supply and demand. Supply and demand regulate nothing but the temporary fluctuations of market prices. They will explain to you why the market price of a commodity rises above or sinks below its value, but they can never account for the value itself. Suppose supply and demand to equilibrate, or, as the economists call it, to cover each other. Why, the very moment these opposite forces become equal they paralyze each other, and cease to work in the one or other direction. At the moment when supply and demand equilibrate each other, and therefore cease to act, the market price of a commodity coincides with its real value, with the standard price round which its market prices oscillate. In inquiring into the nature of that VALUE, we have therefore nothing at all to do with the temporary effects on market prices of supply and demand. The same holds true of wages and of the prices of all other commodities.