Correspondence (1923)

Letter to the Editors from the March 1923 issue of the Socialist Standard

Dear Sirs,

Could you please answer these questions below, in order to clear up a great deal of misunderstanding?

1. When is the value of a commodity determined?
2. Can additional value be added to the commodity in the process of distribution?
3. Has distribution any determining factor in the value of a commodity?

Sid Felperin

Reply:

A commodity is a useful article produced for exchange. It is the result of the application of human energy to the material provided by nature. Its value {a social relation) depends upon the amount of labour required to reproduce such an article in a given society under certain given physical and social conditions.

All the labour necessary to obtain the raw material, work it up into the product required for consumption, and transport it to the point where such products are necessary for consumption, adds value. Coal produced for the needs of London is of greater value in London than in, say, Newcastle, its source of production. But labour used up in transporting coal from its source in Newcastle to London and then back to Newcastle for consumption would add no value to the coal.

Articles so produced are bought and sold upon the market. The market is the sphere of the circulation of commodities. In this circulating process no value is added to the product. The necessary storing, accounting, advertising and such matter are expenses of circulation but do not increase the value of articles as they come upon the market with their values already determined.

The fact that some articles sell above and others below their values, and that here and there one capitalist may gain an advantage over another are matters we cannot enter into here, but they do not affect the general position that the value of an article depends upon its cost of reproduction in human energy.

Expenses of circulation such as those mentioned above are generally included under the heading, “Overhead Expenses” by capitalist concerns. Such expenses are paid out of the surplus value obtained in production.

The above brief explanation will clear the way for the answers to our questioner.

The value of an article is already determined when it comes upon the market for sale. The subsequent expenses of circulation are not productive expenses, and hence not value producing.

If by “distribution" is meant the transport of an article from its source of production to the place where consumption requires it, then value is added in such distribution. But if by “distribution” is meant the transport of articles to a spot where it is more profitable to dispose of them, then no value is added in such distribution. In the latter case the question is one of circulation which has already been dealt with.

The answer to the third question is contained in the answer to the first and second.

ED. COM.