Concept
Law of value
Overview
The law of the value of commodities (German: Wertgesetz der Waren), known simply as the law of value, is a central concept in Karl Marx's critique of political economy first expounded in his polemic The Poverty of Philosophy (1847) against Pierre-Joseph Proudhon with reference to David Ricardo's economics. Most generally, it refers to a regulative principle of the economic exchange of the products of human work, namely that the relative exchange-values of those products in trade, usually expressed by money-prices, are proportional to the average amounts of human labor-time which are currently socially necessary to produce them (See also Socially necessary labour time) within the capitalist mode of production.
Thus, the fluctuating exchange value of commodities (exchangeable products) is regulated by their value, where the magnitude of their value is determined by the average quantity of human labour which is currently socially necessary to produce them (see labor theory of value and value-form). Theorizing this concept and its implications preoccupied Marx for more than two decades.
When Marx talked about "value relationships" or "value proportions" (German: Wertverhältnisse), he did not mean "the money" or "the price". Instead, he meant the ratio of value (or 'worth') that exist between products of human labour. These relationships can be expressed by the relative replacement costs of products as labour hours worked. The more labour it costs to make a product, the more it is worth and inversely the less labour it costs to make a product, the less it is worth. Money-prices are at best only an expression or reflection of Marx's value relationships—accurately or very inaccurately. Products can be traded above or below their value in market trade and some prices have nothing to do with product-values at all (in Marx's sense) because they refer to tradeable objects which are not regularly produced and reproduced by human labour, or because they refer only to claims on financial assets.
Overview adapted from Wikipedia (CC BY-SA 4.0; see the article history for authors).
Possible passages
Found by search and not yet checked by a person; they may only mention the idea in passing.
The fate of the products becomes still more uncertain. The number of merchants is great and one does not know what the other is doing. The products now pass not only from hand to hand, but also from market to market. The producers have lost the control of the aggregate production in their sphere of life, and the merchants have not yet acquired this control. Products and production become the victims of chance. But…
Friedrich Engels, The origin of the family, private property, and the state
States what Law of value is; the author is tied to Law of value in the knowledge graph.
To make the matter more explicit, a peasant produces say twenty hectolitres of wheat in a year. During this time he consumes a sum of values which may be expressed by fifteen hectolitres. Then the twenty hectolitres have the same value as the fifteen in the same market under identical conditions. In other words 20 equals 15. And this is called political economy!
Friedrich Engels, Landmarks of Scientific Socialism
States what Law of value is; the author is tied to Law of value in the knowledge graph.
The introduction of money is a mere addition of one more commodity, of which the value is regulated by the same laws as that of all other commodities. We shall not be surprised, therefore, if we find that international values also are determined by the same causes under a money and bill system as they would be under a system of barter, and that money has little to do in the matter, except to furnish a convenient…
John Stuart Mill, Principles of Political Economy
States what Law of value is; names Law of value.
Philosophers who discussed Law of value
Related ideas
- Productive forces
- Perry Anderson
- Joseph Stalin
- Karl Marx
- Labor theory of value
- Capital (economics)
- Adam Smith
- Metaphysics
- Mao Zedong
- Ibn Khaldun
- Authoritarianism
- Scientific law
- René Descartes
- Soviet Union
- Efficiency
- Socialism
- State (polity)
- State capitalism
- Value theory
- Venezuela
- Relations of production
- Working class
- Capitalist mode of production
- Surplus value
Opposing perspectives
Place in the tradition
Part of Communism.