Sunday, June 16, 2024

Letter: Classes and prices (1976)

Letter to the Editors from the June 1976 issue of the Socialist Standard

IS and others accuse the SPGB of standing"aloof” from the class struggle. But surely the class struggle consists in that over which classes struggle, by which they derive their separate existences as classes, i.e. ownership of the means of life?

Money and wages are only manifestations of private ownership. Accordingly, the struggle over wages implies an acquiescence to the continuance of private ownership, unless accompanied by the revolutionary struggle to dispossess the capitalist class. The SPGB, far from standing aloof, appears to be the sole party concerned with the very essence of the class struggle and the solution that will terminate it—abolition of wage-labour and capital, the two sides of the same coin that is capitalism. It must be asked of others why they should demand anything less than Socialism, since the material conditions that make it practicable have long been in existence. Besides, the conspicuous absence of what one should expect from “socialists” — an unrelenting clamour for Socialism out of the horse’s mouth so to speak — serves only to banish authentic Socialism in the minds of the misinformed, and confuse the clear-cut choice between Socialism and capitalism.

A question on economics. How do you translate value into price and why it is that prices, according to supply and demand, fluctuate about value (or do they?)? How does value express itself in price, and what happens to the relationship between prices, profits and wages as value declines? Finally, how will value under Socialism compare with value under capitalism?
Robin Cox

When talking of commodities, there are two distinct uses of the term "value”; use-value and exchange- value. Use-value is the actual physical utility of an object, i.e. a bicycle’s use is to be ridden as a means of transport. Exchange-value is the amount of "worth” a commodity possesses on the market, in the form of abstract human labour. Exchange-value equates different amounts of various commodities to each other. For example 1 oz. of gold may be worth 2 cwt. of copper. According to the labour theory of value, the more labour a commodity contains the more value it contains (the measure being socially-necessary labour time). The amount of socially-necessary labour contained in an object includes all the processes involved in its production, not just the last one.

Price is the amount that a commodity realizes on the market, and generally speaking commodities sell at or around their values. Prices reflect the value of commodities. While we are of course aware that supply and demand will affect price, when supply and demand are equal then commodities will sell at their value. In the case of monopoly the price can be kept artificially high, and in the case of subsidy artificially low. In times of inflation (i.e. the excess issue of paper currency) there is a general rise in the prices of all commodities, even though their relative values remain constant.

Whilst a capitalist who is selling a commodity may not himself know the amount of labour embodied in it, he does know what he has paid for it including those processes carried out before it reached his factory. He will ask as high a price as he dare on the market, but must always try to keep competitive with his rivals. In society, as commodities exchange, the values are transmitted unconsciously through the price of each transaction.

When commodities change their values, this is due to a change in the amount of socially-necessary labour involved in their production, and this change will be reflected in the relative exchange-value of the commodities. For example, if 1 oz. of gold will buy 2 cwt. of copper we may say that 1 oz. of gold=
2 cwt. of copper. If then the amount of labour required to produce 1 oz. gold is halved, but the same amount of labour is still necessary for 2 cwt. of copper, then 1 oz. of gold=4 cwt. of copper. Assuming gold to be the money commodity, a fall in the value of gold while other commodities retain their values would be represented by a rise in the prices of the other commodities. The converse would be true if the value of gold were to double.

It must be remembered that labour-power is a commodity and is special in that it is the only commodity able to create value and to reproduce itself. A wage is the price of labour-power and on average represents its value: that is, the amount necessary to the worker to keep him going in the same task and for him to bring up the next generation of workers. It is of course up to workers and their organizations to get as much as they can in the form of wages from their employers.

We agree with you when you say that the struggle for higher wages without a revolutionary Socialist purpose implies acquiescence to the system and its private-property relations. Most workers are not yet Socialists and again we agree that a lot of the blame for this must be laid at the door of “left-wing” parties, including is, for their confusion and misrepresentation of Socialism. Why indeed ask for anything less than Socialism? Socialism will usher out all the paraphernalia of capitalism including capital, commodities, exchange-value, wages, prices, etc. Instead production will be carried on for the benefit of the whole of society.
Editorial Committee.

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