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Part of a series on Marxism
Theoretical works
The Communist Manifesto Das Kapital Marxism is both the theory and the political practice (that is, the praxis) derived from the work of Karl Marx and Friedrich Engels. ... Image File history File links Karl_Marx. ... This article or section does not cite any references or sources. ... Das Kapital (Capital, in the English translation) is an extensive treatise on political economy written by Karl Marx in German. ... The Eighteenth Brumaire of Louis Napoleon On The Jewish Question Grundrisse The German Ideology 1852 publication in Die Revolution The Eighteenth Brumaire of Louis Napoleon was written by Karl Marx between December 1851 and March 1852, and originally published in 1852 in Die Revolution, a German-language monthly magazine published in New York and established by Joseph Weydemeyer. ... On the Jewish Question (German: Zur Judenfrage) is an essay by Karl Marx written in autumn 1843 and first published in February 1844 in the Deutsch–Französische Jahrbücher. ... The Grundrisse is a lengthy work by the German philosopher Karl Marx, completed in 1858. ... The German Ideology (1845) was a book written by Karl Marx and Friedrich Engels around April or early May 1845. ... Economic and Philosophical Manuscripts of 1844 Theses on Feuerbach Economic & Philosophical Manuscripts of 1844 (also referred to as The Paris Manuscripts) are a series of notes written between April and August 1844 by Karl Marx. ... The Theses on Feuerbach are eleven short philosophical notes written by Karl Marx in 1845. ...
Sociology and anthropology
Alienation · Bourgeoisie Class consciousness Commodity fetishism Communism Cultural hegemony Exploitation · Human nature Ideology · Proletariat Reification · Socialism Relations of production Marxs theory of alienation (Entfremdung in German), as expressed in the writings of young Karl Marx, refers to the separation of things that naturally belong together, or to antagonism between things that are properly in harmony. ... Bourgeois redirects here. ... Class consciousness is a category of Marxist theory, referring to the self-awareness of a social class, its capacity to act in its own rational interests, or measuring the extent to which an individual is conscious of the historical tasks their class (or class allegiance) sets for them. ... In Marxist theory, commodity fetishism is a state of social relations, said to arise in capitalist market based societies, in which social relationships are transformed into apparently objective relationships between commodities or money. ... This article is about the form of society and political movement. ... Cultural hegemony is a concept coined by Marxist philosopher Antonio Gramsci. ... The rate of exploitation is a concept in Marxian political economy. ... Marxs theory of human nature occupies an important place in his critique of capitalism, his conception of communism, and his materialist conception of history. Marx, however, does not refer to human nature as such, but to Gattungswesen, which is generally translated as species-being or species-essence. What Marx... An ideology is an organized collection of ideas. ... The proletariat (from Latin proles, offspring) is a term used to identify a lower social class; a member of such a class is proletarian. ... Reification (German: Verdinglichung, literally: thing-ification) is the consideration of an abstraction or an object as if it had human (pathetic fallacy) or living (reification fallacy) existence and abilities; at the same time it implies the thingification of social relations. ... Socialism refers to the goal of a socio-economic system in which property and the distribution of wealth are subject to control by the community. ... Relations of production (German: Produktionsverhaltnisse) is a concept frequently used by Karl Marx in his theory of historical materialism and in Das Kapital. ...
Economics
Labour power · Law of value Means of production Mode of production Productive forces Surplus labour · Surplus value Transformation problem Wage labour Note: Marxian is not restricted to Marxian economics, as it includes those inspired by Marxs works who do not identify with Marxism as a political ideology. ... According to Karl Marx, there is a clear distinction between labor and labor-power in economics. ... Means of production (abbreviated MoP; German: Produktionsmittel), are the combination of the means of labor and the subject of labor used by workers to make products. ... In the writings of Karl Marx and the Marxist theory of historical materialism, a mode of production (in German: Produktionsweise, meaning the way of producing) is a specific combination of: productive forces: these include human labor-power, tools, equipment, buildings and technologies, materials, and improved land social and technical relations... For the specific theoretical justifications behind the Great Leap Forward and the Five Year Plans, see Theory of Productive Forces. ... Surplus labour is a concept used by Karl Marx in his critique of political economy. ... Surplus value, according to Marxism, is unpaid labour that is extracted from the worker by the capitalist, and serves as the basis for capitalist accumulation. ... In Karl Marxs economics the transformation problem is the problem of finding a general rule to transform the values of commodities (based on labour according to his labour theory of value) into the competitive prices of the marketplace. ... Wage labour is the socioeconomic relationship between a worker and an employer in which the worker sells their labour under a contract (employment), and the employer buys it, often in a labour market. ...
History
Anarchism and Marxism Capitalist production Class struggle Dictatorship of the proletariat Primitive capital accumulation Proletarian revolution Proletarian internationalism World Revolution While anarchism and Marxism are two different political philosophies, there is some similarity between the methodology and ideology of groups of anarchists and Marxists, and the history of the two have often been intertwined. ... The capitalist mode of production is a concept in Karl Marx’s critique of political economy. ... The South African Police Crush Another Demonstration by the Shack dwellers Movement Abahlali baseMjondolo, 28 September, 2007 Class struggle is the active expression of class conflict looked at from any kind of socialist perspective. ... The dictatorship of the proletariat is a term employed by Karl Marx in his 1875 Critique of the Gotha Program that refers to a transition period between capitalist and communist society in which the state can be nothing but the revolutionary dictatorship of the proletariat. The term refers to a... Primitive accumulation of capital is a concept introduced by Karl Marx in part 8 of the first volume of Das Kapital (in German: ursprüngliche Akkumulation, literally original accumulation or primeval accumulation). Its purpose is to help explain how the capitalist mode of production can come into being. ... A communist revolution is a social revolution inspired by the ideas of Marxism that aims to replace capitalism with communism, normally with socialism (public ownership over the means of production) as an intermediate stage. ... International Socialism redirects here. ... World revolution is a Marxist concept of a violent overthrow of capitalism that would take place in all countries, although not necessarily simultaneously. ...
Philosophy
Historical materialism Dialectical materialism Analytical Marxism Marxist autonomism Marxist feminism Marxist humanism Marxist geography Structural Marxism Western Marxism Libertarian Marxism Young Marx Marxist philosophy or Marxist theory are terms which cover work in philosophy which is strongly influenced by Karl Marxs materialist approach to theory or which is written by Marxists. ... Historical materialism is the methodological approach to the study of society, economics, and history which was first articulated by Karl Marx (1818-1883), although Marx himself never used the term (he referred it as philosophical materialism, a term he used to distinguish it from what he called popular materialism). Historical... According to many followers of the theories of Karl Marx (or Marxists), dialectical materialism is the philosophical basis of Marxism. ... Analytical Marxism refers to a style of thinking about Marxism that was prominent amongst English-speaking philosophers and social scientists during the 1980s. ... For other meanings of autonomism, see autonomism (disambiguation) page Raised fist, stenciled protest symbol of Autonome at the Ernst-Kirchweger-Haus in Vienna, Austria Autonomism refers to a set of left-wing political and social movements and theories close to the socialist movement. ... Marxist feminism is a sub-type of feminist theory which focuses on the dismantling of capitalism as a way to liberate women. ... The term Marxist humanism has as its foundation Marxs conception of the alienation of the labourer as he advances it in his Economic and Philosophic Manuscripts of 1844--an alienation that is born of a capitalist system in which the worker no longer functions as (what Marx terms) a... Marxist geography is a critical geography which utilizes the the theories and philosophy of Marxism to examine the spatial relations of human geography. ... Structural Marxism was an approach to Marxist philosophy based on structuralism, primarily associated with the work of the French philosopher Louis Althusser and his students. ... Western Marxism is a term used to describe a wide variety of Marxist theoreticians based in Western and Central Europe (and more recently North America), in contrast with philosophy in the Soviet Union. ... Libertarian Marxism is a school of Marxism that takes a less authoritarian view of Marxist theory than conventional currents such as Stalinism, Trotskyism, and other forms of Marxism-Leninism, as well as a generally less reformist view than do Social Democrats. ... ‘Young Marx’ is one half of the concept in Marxology that Karl Marx’s intellectual development can be broken into two board categories, the other being ‘Mature Marx’. There is disagreement though as to when Marx thought began to mature, Lenin claimed Marxs first mature work as “The Poverty...
Prominent figures
Karl Marx · Friedrich Engels Karl Kautsky · Georgi Plekhanov Rosa Luxemburg Antonie Pannekoek Vladimir Lenin · Leon Trotsky Georg Lukács · Guy Debord Antonio Gramsci · Karl Korsch Che Guevara · Frankfurt School Jean-Paul Sartre Louis Althusser Karl Heinrich Marx (May 5, 1818 – March 14, 1883) was a 19th century philosopher, political economist, and revolutionary. ... Engels redirects here. ... Karl Kautsky (October 16, 1854 - October 17, 1938) was a leading theoretician of social democracy. ... G. V. Plekhanov Georgi Valentinovich Plekhanov (Георгий Валентинович Плеханов) (December 11, 1856 – May 30, 1918; Old Style: November 29, 1856 – May 17, 1918) was a Russian revolutionary and a Marxist theoretician. ... Rosa Luxemburg Rosa Luxemburg (March 5, 1870 or 1871 – January 15, 1919, in Polish Róża Luksemburg) was a Jewish Polish-born Marxist political theorist, socialist philosopher, and revolutionary. ... Anton Pannekoek Antonie (Anton) Pannekoek (January 2, 1873, Vaassen – April 28, 1960, Wageningen) was a Dutch astronomer and Marxist theorist. ... Lenin redirects here. ... Leon Trotsky (Russian:  , Lev Davidovich Trotsky, also transliterated Leo, Lyev, Trotskii, Trotski, Trotskij, Trockij and Trotzky) (November 7 [O.S. October 26] 1879 – August 21, 1940), born Lev Davidovich Bronstein (), was a Ukrainian-born Bolshevik revolutionary and Marxist theorist. ... Georg Lukács (April 13, 1885 – June 4, 1971) was a Hungarian Marxist philosopher and literary critic in the tradition of Western Marxism. ... Guy Ernest Debord (December 28, 1931, in Paris – November 30, 1994, in Champot) was a writer, film maker, hypergraphist and founding member of the groups Lettrist International and Situationist International (SI). ... Antonio Gramsci (IPA: ) (January 22, 1891 – April 27, 1937) was an Italian writer, politician and political theorist. ... Karl Korsch (August 15, 1886 - October 21, 1961) was a German Marxist theorist. ... Ernesto Guevara de la Serna Lynch (May 14, 1928 – October 9, 1967), commonly known as Che Guevara, el Che, or simply Che, was an Argentine Marxist revolutionary, political figure, author, military theorist, and leader of Cuban and internationalist guerrillas. ... For related articles, see Critical theory and Critical theory (Frankfurt School) Max Horkheimer (front left), Theodor Adorno (front right), and Jürgen Habermas in the background, right, in 1965 at Heidelberg The Frankfurt School is a school of neo-Marxist critical theory, social research, and philosophy. ... Jean-Paul Charles Aymard Sartre (June 21, 1905 – April 15, 1980), normally known simply as Jean-Paul Sartre (pronounced: ), was a French existentialist philosopher and pioneer, dramatist and screenwriter, novelist and critic. ... Louis Pierre Althusser (Pronunciation: altuË¡seʁ) (October 16, 1918 – October 22, 1990) was a Marxist philosopher. ...
Criticism
Criticisms of Marxism This article is on criticisms of Marxism, a branch of socialism. ...
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The law of value is a concept in Karl Marx's critique of political economy. Most generally, it refers to a regulative principle of the economic exchange of the products of human work: the relative exchange-values of those products in trade, usually expressed by money-prices, are proportional to the average amounts of human labour-time which are currently socially necessary to produce them. Karl Heinrich Marx (May 5, 1818 – March 14, 1883) was a 19th century philosopher, political economist, and revolutionary. ... The Politics series Politics Portal This box:      Political economy was the original term for the study of production, the acts of buying and selling, and their relationships to laws, customs and government. ... In political economy and especially Marxian economics, exchange value refers to one of four major attributes of a commodity, i. ...

Thus, the exchange value of commodities is regulated by their value, where their value is a quantity of human labour (labor theory of value). In Das Kapital Marx normally thinks of that quantity as the ratio between the amount of labour required to produce a reproducible good, and the corresponding amount of labour required to produce a unit of gold. While Marx used the concept of the law of value in Das Kapital and the Grundrisse, he did not explicitly formalise its full meaning, and therefore how it should be exactly defined remains to some extent a controversial topic in Marxian economics. In Marxian political economy, exchange value refers to one of three major aspects of a commodity, i. ... In classical political economy and especially Karl Marxs critique of political economy, a commodity is any good or service produced by human labour and offered as a product for general sale on the market. ... The labor theories of value (LTV) are theories in economics according to which the true values of commodities are related to the labor needed to produce them. ... Das Kapital (Capital, in the English translation) is an extensive treatise on political economy written by Karl Marx in German. ... GOLD refers to one of the following: GOLD (IEEE) is an IEEE program designed to garner more student members at the university level (Graduates of the Last Decade). ... Das Kapital (Capital, in the English translation) is an extensive treatise on political economy written by Karl Marx in German. ... The Grundrisse is a lengthy work by the German philosopher Karl Marx, completed in 1858. ... Note: Marxian is not restricted to Marxian economics, as it includes those inspired by Marxs works who do not identify with Marxism as a political ideology. ...

Basic definition of the concept

Obviously, excess demand can raise the exchange-values of products, and excess supply can lower them; but if supply and demand are relatively balanced, the question arises of what regulates the settled exchange-ratios (or average price-levels) of products traded in that case, and this is what the law of value intends to explain. According to the law of value, the trading ratios of products reflect a real cost structure of production, and this cost structure ultimately reduces to the socially average amounts of human labor-time currently required to produce different goods and services.

Simply put, if product A takes 100 hours of human work to produce in total, and product B takes 5 hours to produce, the normal trading-ratio of A and B will gravitate to a rate of around 1:20 (one of A is worth 20 of B), because A is worth much more than B. The trading ratio will never be 20:1, 1:5, 1:100, or 500:1 (unless there was an exceptional shortage or oversupply of these products, or unequal exchange took place). For that reason, most market trade is regular and largely predictable, rather than chaotic and arbitrary; norms of what products are worth relative to each other are mostly clearly known and established, even if people lack an exact knowledge of prices. Unequal exchange is a concept used in Marxian economics to denote forms of exploitation which commercial trade of any type can involve, if objects of unequal value are being exchanged or traded. ...

The field of application of the law of value is limited to new output by producers of traded, reproducible labour-products, although it might indirectly influence trade in other goods or assets. Thus the law does not apply to all goods or assets in an economy. Primary products are a special case, which Marx discusses in his theory of Differential and Absolute Ground Rent. World market prices for primary products can at any time be strongly influenced by the yield of harvests and mines in different countries. Differential and Absolute Ground Rent are concepts used by Karl Marx in the third volume of Das Kapital to explain how the capitalist mode of production would operate in agricultural production, under the condition where most agricultural land was owned by a social class of land-owners who obtained rent...

The concept of the law of value was already expressed by David Ricardo at the very beginning of his Principles of Political Economy and Taxation, as follows: David Ricardo (18 April 1772–11 September 1823), a political economist, is often credited with systematizing economics, and was one of the most influential of the classical economists, along with Thomas Malthus and Adam Smith. ...

"The value of a commodity, or the quantity of any other commodity for which it will exchange, depends on the relative quantity of labour which is necessary for its production, and not on the greater or less compensation which is paid for that labour." [1]

At the most basic level, this law of value specified "labor-content" as the substance and measure of economic value, and it suggests that trade will - other things being equal - evolve towards the exchange of equivalents (insofar as all trading partners try to "get their money's worth"). At the basis of the trading process is the economising of human time, and "normal" trading ratios become known to, or accepted, by economic actors.

However, Marx's real concern is to understand and analyze how the law of value determines or regulates exchange, i.e. how the balancing of the production of outputs and the demand for them could be accomplished, in a society based on a universal market such as capitalism. He tries to do this by starting off with simplifying assumptions and then gradually building up a complex theoretical structure. His theory specifically aims to grasp capital in motion, i.e. how, through the circulation and dynamics of capital, changing expenditures of social labor are reconciled with (or fail to be reconciled with) changing social needs. This is obviously an enormously complex undertaking, and Marx did not get much further than to specify the main tendencies and dynamics, and "pure cases". Not to be confused with capitol. ...

Economic value as such

Economic value exists necessarily, according to Marx, because human beings as social and moral beings must co-operatively produce and economize their means of life to survive, and in so doing they are subject to relations of production. They know that their products have a socially accepted value, even if no trade occurs yet. Relations of production (German: Produktionsverhaltnisse) is a concept frequently used by Karl Marx in his theory of historical materialism and in Das Kapital. ...

Three main kinds of relationships are involved which are objectively and empirically verifiable, and often formalised in law: For other uses, see Law (disambiguation). ...

• between people (social relations).
• between people and their economic products (technical relations).
• between products themselves (with or without trading prices; these are technical, economic or commercial relations, or, in general, value relations).

The attribution of value to labor-products, and therefore the economising of their use, occurs within these three types of relationships interacting with each other. In a community of independent private producers, their economic relations are necessarily expressed through the product-values of what they trade. Over time, most products acquire a normal exchange-value, meaning that what a product costs relative to other products remains fairly stable. Although Harvard University has featured a Department of Social Relations (in which Talcott Parsons played a prominent role), and although the term social relations is frequently used in social sciences, there is no commonly agreed meaning for this concept (see also the entry social). ...

However, because these three types of relationships co-exist and interact objectively, as a given social fact, independently of particular individuals, it may appear that economic value is an intrinsic property of products, or alternately, that it is simply a characteristic that results from negotiations between market actors with different subjective preferences. Marx recognised that value has both objective and subjective aspects, but he is primarily concerned with the objectification of value, such that objectified (reified) value relations rule human affairs.

When more and more of human requirements are marketised, and a complex division of labor develops, the link between value and labor-time becomes obscured or opaque, and economic value seems to exist only as an impersonal "market force" (a given structure of priced costs and sale-values) to which all people must adjust their behaviour. Human labor becomes dominated by the economic exchange of the products of that labor, and labor itself becomes a tradeable abstract value (see Abstract labour and concrete labour). Division of labour is the breakdown of labour into specific, circumscribed tasks for maximum efficiency of output in the context of manufacturing. ... Abstract labour and concrete labour refer to a distinction made by Karl Marx in his critique of political economy. ...

The result is that value and its source themselves becomes something of a mystery, and that how the attribution of value really occurs is no longer clear. The three relationships mentioned become mixed up, and are confused with each other, in commercial and economic discourse, and it appears that things and assets acquire an independent power to create value, even although value is a human attribution. Marx refers to this as commodity fetishism or thingification (Verdinglichung or reification) which culminates in what he calls fictitious capital. He regards it as an inevitable effect of commercial practice. In Marxist theory, commodity fetishism is a state of social relations, said to arise in capitalist market based societies, in which social relationships are transformed into apparently objective relationships between commodities or money. ... Reification (German: Verdinglichung, literally: thing-ification) is the consideration of an abstraction or an object as if it had human (pathetic fallacy) or living (reification fallacy) existence and abilities; at the same time it implies the thingification of social relations. ... Fictitious capital is a concept used by Karl Marx in his critique of political economy. ...

The end result is that value theory is banished from economics as a useless metaphysics, surviving only in the form of assumptions made about price behaviour (after all, we cannot talk about price aggregates without assuming some valuation principle or value criterion). Money-prices offer convenient quantifiable units of economic value, and no further inquiry into value is deemed necessary. To meet Wikipedias quality standards, this article or section may require cleanup. ... Plato (Left) and Aristotle (right), by Raphael (Stanza della Segnatura, Rome) Metaphysics is the branch of philosophy concerned with explaining the ultimate nature of reality, being, and the world. ...

To solve the riddle of economic value, Marx argues, we must investigate the real historical origins of the conditions which give rise to the riddle in the first place, i.e. the real economic history of trade and the way that history has been reflected in human thought. Once we do this, value is no longer defined simply an attribute of products and assets, but as a relation between objects and subjects. Economic history is the study of how economic phenomena evolved in the past. ... This article is about economic exchange. ...

Is it an equilibrium theory?

Some authors have interpreted Marx's law of value as a theory of market equilibrium. However, Marx offered no theory of market equilibrium, only a dynamic theory of economic reproduction. In reality, markets were rarely in equilibrium anyway (that was more a hypothesis used by economists), and what explained the market behaviour of individuals and groups was precisely the imbalances between supply and demand. In Marxian economics, economic reproduction refers to recurrent (or cyclical) processes by which the initial conditions necessary for economic activity to occur are constantly re-created. ...

Under capitalist conditions, balancing output and market demand depended on capital accumulation occurring. If profits were not made, production would stop sooner or later. A capitalist economy was therefore in "equilibrium" so long as it could reproduce its social relations of production, permitting profit-making and capital accumulation to occur, but this was compatible with all sorts of market fluctuations and disequilibria. Only when shortages or oversupply began to threaten the existence of the relations of production themselves, and block the accumulation of capital in critical areas (for example, an economic depression, a political revolt against capitalist property or against mass unemployment), a genuine "disequilibrium" occurred; all the rest was just ordinary market fluctuations. Most generally, the accumulation of capital refers simply to the gathering or amassment of objects of value; the increase in wealth; or the creation of wealth. ... Relations of production (German: Produktionsverhaltnisse) is a concept frequently used by Karl Marx in his theory of historical materialism and in Das Kapital. ...

So this kind of Marxian "equilibrium" was more a condition of social stability, not a hypothetical and unverifiable perfect match between supply and demand under idealised, static conditions. In any case, real social needs and their monetary expression through market demand might be two very different things. A demand might exist without any buying power. Economic equilibrium was not created by a perfect match of supply and demand, but by the social framework which permitted the balancing act to occur. The role of the political state was essential in this, to provide a legal framework for fair trade and secure property rights (see Kay & Mott 1982). For other uses, see State (disambiguation). ...

The difference between the equilibrium theories of neoclassical economists and Marx's theory of the regulation of trade can be illustrated with a simple analogy. It is extraordinarily difficult to stay in balance while sitting on an ordinary bicycle, if the bicycle is stationary; but as soon as forward motion is achieved, balance is usually also achieved (give or take a few close shaves, perhaps). That balance therefore exists only as a motion involving the rider, the bike and the ground. All of these are necessary. If we just focused on the rider and the bicycle only, and ignored the ground, we would miss an important factor, to our peril.

A physicist would no doubt explain all this in terms of momentum, mass, velocity, kinetic energy, gyroscopic forces, torque and the law of gravity. The law of value performs a similar function in economic science. It tells us that the trading pattern in a society does not behave chaotically or arbitrarily, but is regulated at the very least by the relative proportions of work effort involved. Exchange-value thus expresses a necessary relationship between the demand for a good, and the quantity of society's labour-time required to produce it. A community of private producers working independently of each other has no other way to adjust their production volume to each other, than via the trading-value of their products. This article is about momentum in physics. ... For other uses, see Mass (disambiguation). ... This article is about velocity in physics. ... The cars of a roller coaster reach their maximum kinetic energy when at the bottom of their path. ... A gyroscope is a device which demonstrates the principle of conservation of angular momentum, in physics. ... For other senses of this word, see torque (disambiguation). ... Gravity is a force of attraction that acts between bodies that have mass. ...

By contrast, what economists often concern themselves with is a question of this type: suppose the purpose of the bicycle is to be perfectly stationary, and the rider to sit on it while perfectly stationary. Under what conditions would the balancing act then be successful? What kind of bike would we need? What skills does the rider need? Which is interesting to speculate about.

Obviously, while riding the bicycle, a potential risk exists that it will crash or collide with something; balance may be lost momentarily, yet also quickly restored. But the point is, we learn little about the possibilities or conditions for such an imbalance or crash from only examining the necessary conditions for a balancing act on a stationary bicycle - except trivia such as that if balance is not achieved, the rider must fall to the ground. We have to study the whole phenomenon interacting in motion.

More sophisticated econometric models in fact do this, by identifying the quantitative effects of the interaction of many different economic trends; this is sometimes referred to as "dynamic equilibrium", but it is often no longer clear what exactly is being equilibrated, or what the equilibrium would consist in. It is more a theory of how to prevent the decline or collapse of the circulation of commodities, money and capital, or promote balanced growth on some definition.

Factors counteracting the law of value

The main factors counteracting the operation of the law of value, as a law of economic exchange, are:

• structural unequal exchange - alternative or competing sources of supply or demand are absent or blocked, distorting trading ratios in favour of those in a stronger market (or bargaining) position. In that case, the true value or cost of products may deviate greatly from actual selling prices for a prolonged time.

• other restrictions on trade and what people may do with resources (legal, technical, protectionism etc.).

• taxation and subsidies to producers by government

• disparities in currency exchange rates.

• monopoly pricing where firms drive up prices because they control the supply of most of the market demand.

• administered prices set by a state authority or a monopolist.

• the large-scale use of credit economy to acquire goods and services produced, without corresponding increases in production occurring.

• non-market allocation of resources, including gifts and grants

• countertrade (forms of barter).

• accumulation of fictitious capital (bubble economies).

• dumping of surplus goods at dumping prices.

• illegal (criminal) or "grey" transactions (including pirated and counterfeited goods).

All of these phenomena occur to some degree or other in any real economy. Hence the effect of the law of value would usually be mediated by them, and would manifest itself only as a tendency. However, there are many indications that Marx believed the future would see an increasingly "purified" capitalism. That is, obstructions to market expansion would be cleared away through privatisation and removal of legal or technical restrictions on the expansion of trade, and that would in turn mean that the law of value would impose itself more, not less. Thus, the socially average real production costs would then influence the trading ratios in economic exchange more, not less; the allocation of goods would be determined more by private costs and private profits. Unequal exchange is a concept used in Marxian economics to denote forms of exploitation which commercial trade of any type can involve, if objects of unequal value are being exchanged or traded. ... Protectionism is the economic policy of restraining trade between nations, through methods such as high tariffs on imported goods, restrictive quotas, a variety of restrictive government regulations designed to discourage imports, and anti-dumping laws in an attempt to protect domestic industries in a particular nation from foreign take-over... A tax is an involuntary fee paid by individuals or businesses to a state, or to functional equivalents of a state, including tribes, secessionist movements or revolutionary movements. ... A subsidy is generally a monetary grant given by government in support of an activity regarded as being in the public interest. ... In finance, the exchange rate between two currencies specifies how much one currency is worth in terms of the other. ... This article is about the economic term. ... Countertrade is exchanging goods or services that are paid for, in whole or part, with other goods or services. ... Fictitious capital is a concept used by Karl Marx in his critique of political economy. ... In economics, dumping can refer to any kind of predatory pricing, and is by most definitions a form of price discrimination. ... Privatization (sometimes privatisation, denationalization, or — especially in India — disinvestment) is the process of transferring property, from public ownership to private ownership. ...

Law of value in capitalism

Marx argues that as economic exchange develops, and markets expand, the law of value is modified in its operation.

Thus, capitalism is a type of economy in which both inputs and outputs of production have become marketed goods and services (or commodities). In such an economy, Marx argues, what directly regulates the economic exchange of new labour-products is their prices of production, i.e. cost-price + average profit. In pre-capitalist societies, where inputs and outputs often weren't priced goods, such an expression would be meaningless. The corollary is the free movement (or at least mobility) of labour and capital among branches of industry. For other uses, see Capitalism (disambiguation). ... Input3 is the term denoting either an entrance or changes which are inserted into a system and which activate/modify a process. ... Output is the term denoting either an exit or changes which exits a system and which activate/modify a process. ... In classical political economy and especially Karl Marxs critique of political economy, a commodity is any good or service produced by human labour and offered as a product for general sale on the market. ... -1... Pre-industrial society refers to specific social attributes and forms of political and cultural organization that were prevalent before the advent of the Industrial Revolution and the rise of Capitalism. ...

Another way of saying the same thing, is that "sale at production prices becomes the normal precondition of supply" for new outputs produced (although in particular cases, fluctuating market prices might be above or below the production price). This means two things: the average price for which a commodity sells will typically diverge to some extent from the labour-value it represents, and that the exchange values realised in trade reflect not only a physical production cost, but also a "mark-up" or surplus-value in excess of that cost. Usually this is in a range of perhaps 8-15% of capital invested (net) or about 10-40% of product market-prices, depending on the case. The production of surplus value, from Karl Marxs Capital in Lithographs, by Hugo Gellert, 1934 Surplus value is a concept created by Karl Marx in his critique of political economy, where its ultimate source is claimed to be unpaid surplus labour performed by the worker for the capitalist, serving...

Capitalist economic exchange, Marx argues, is not a simple exchange of equivalents. It aims not to trade goods and services of equivalent value, but instead to make money from the trade (this is called capital accumulation). The aim is to "buy as cheaply as possible, and sell as dear as possible", under the constraint that everybody has the same objective. The effect is that the whole cost-structure of production permanently includes profit as an additional impost. In an overall sense, Marx argues the substance of this impost is the unpaid surplus labour performed by the working class; part of society can live off the labour of others due to their ownership of property. Most generally, the accumulation of capital refers simply to the gathering or amassment of objects of value; the increase in wealth; or the creation of wealth. ... Surplus labour is a concept used by Karl Marx in his critique of political economy. ... The term working class is used to denote a social class. ...

In this situation, output values produced by enterprises will typically deviate from output prices realised. Market competition for a given demand will impose a ruling price-level for a type of output, but the different competing enterprises producing it will take more or less labour to produce it, depending on productivity levels and technologies they use. Consequently, output values produced by different enterprises (in terms of labour-time) and output prices realised by them will typically diverge (within certain limits). That divergence becomes a critical factor in capitalist competition, under conditions where the average price-levels for products are beyond anyone's control.

If capital accumulation becomes the dominant motive for production, then producers will do everything they can to cut costs, increase sales and increase profits. Since they mostly lack control over the ruling market prices for their inputs and outputs, they try to increase productivity by every means at their disposal and maximise surplus labour. Because the lower the unit-costs of goods produced by an enterprise, the greater the margin will be between its own production costs and the ruling market prices for those goods, and the larger the profits that can be realised as result when goods are sold. Producers thus become very concerned with the value added in what they produce, which depends crucially on productivity. Most generally, the accumulation of capital refers simply to the gathering or amassment of objects of value; the increase in wealth; or the creation of wealth. ... Surplus labour is a concept used by Karl Marx in his critique of political economy. ...

This leads to constant attempts to improve production techniques to cut costs, and hold down labour-costs, but ultimately also to a decline in the labor-content of commodities. Therefore, their values will also decline over time; more and more commodities are produced, for a larger and larger market, at an increasingly cheaper cost. Marx claims that this trend happens "with the necessity of a natural law"; producers had no choice about doing what they could in the battle for productivity, if they wanted to maintain or increase sales and profits. In business, if you don't go forward, you go backward. That was, in Marx's view, the "revolutionary" aspect of capitalism. However, competition inexorably gives rise to market monopolies, which may constrain further significant advances in productivity and innovation. The word commodity has a different meaning in business than in Marxian political economy. ... This article is about economic monopoly. ...

In a developed capitalism, the development or decline of the different branches of production occurs through the continual entry and exit of capital, basically guided by profitability criteria, and within the framework of competition. Thus, supply and demand are reconciled, however imperfectly, by the incessant movements of capital. Yet, Marx argues, this whole process is nevertheless still regulated by the law of value; ultimately, relative price movements are determined by comparative expenditures of labour-time. Thus, market prices for outputs will gravitate towards prices of production which themselves are constrained by product-values expressible in quantities of labour-time.-1...

In economic crises, Marx suggests, the structure of market prices is more or less suddenly readjusted to the evolving underlying structure of production values. Another way of saying this is, that the law of value will ultimately assert itself, by forcing a change in relative prices, in conformity with real production costs. In turn, this implies that although production values and market prices can diverge significantly from each other (in particular, because there exists no "perfect competition" - competition involves also blocking competitors), there are also limits to the possible discrepancies (because ultimately competitors will bring down artificially inflated prices, and goods continually sold below value would eventually put producers out of business).

Smith's hidden hand

Neo-classical economics holds that, left to themselves, markets will balance supply and demand relatively quickly. If equilibrium does not exist, it will exist in the future, provided obstacles to market functioning are cleared away. Neoclassical economics is the grouping of a number of schools of thought in economics. ...

In his Bundesbank speech on January 13, 2004, US Federal Reserve chairman Alan Greenspan, stated: Squalltoonix (born March 6, 1926 in New York City) is an American economist and was Chairman of the Board of Governors of the Federal Reserve of the United States from 1987 to 2006. ...

"Globalization has altered the economic frameworks of both developed and developing nations in ways that are difficult to fully comprehend. Nonetheless, the largely unregulated global markets do clear, and, with rare exceptions, appear to move effortlessly from one state of equilibrium to another. It is as though an international version of Adam Smith's "invisible hand" is at work." For other uses, see Invisible hand (disambiguation). ...

This was a reference to Adam Smith's Wealth of Nations (1776) where Smith wrote: For other persons named Adam Smith, see Adam Smith (disambiguation). ...

"Every individual intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his original intention. By pursuing his own interest he frequently promotes that of society more effectively than when he really intends to promote it."

Marx's theory of how the law of value operates in capitalism aims to reveal what the "hidden hand" of markets theorised by Adam Smith really consists of. It aims to explain how it comes about, that the markets get "a life of their own", by showing what drives the markets, and how the market-balancing process actually occurs. For other persons named Adam Smith, see Adam Smith (disambiguation). ...

But it can do so only by distinguishing between a domain of value-relations and a domain of price-relations, and between potential values and actual prices realised; after all, a process is involved whereby products move into markets, are sold for a price, and then move out of markets; this can be rationally understood only by assuming a temporal continuity (or conservation) of product-values through successive exchanges.

Another "take" on the law of value, from an investor's perspective, is by George Soros: Soros redirects here. ...

"Every market participant is faced with the task to estimate the value in the present of a future development of events, but that development is co-determined by the value which all market participants together attribute to it in the present. That is why market participants are forced to be led partly by their subjective judgement. Characteristic of that bias is that it is not purely passive: it has influence on the course of events which it should represent. This active aspect is lacking in the concept of equilibrium such as is used in economic theory." (George Soros, "The Crisis of Global Capitalism" (1998), Chapter 3, Dutch edition, p. 83).

In the real world, investors are constantly juggling between actual market prices and hypothetical (ideal) prices, based on assumptions about what the objective value of a good (its "real worth") is likely to be, now and in the future. A difficulty here is that the majority of objects of value in a society at any time don't have any actual market price, because they are not being traded. Thus, value relations between those objects objectively exist, but at best these can only be approximated or estimated in price terms. Real prices and ideal prices refers to a distinction between actual prices paid for products, services, assets and labour, and computed prices which are not actually charged or paid in market trade. ...

Marx tries to model the market outcomes macro-economically with regard to new outputs from production, assuming that values and prices will diverge, the argument being that this divergence will create a systematic pattern of economic behaviour by producers and investors. He is not interested in the circus-act of a clown balancing on a stationary bicycle, but in the bicycle ride.

Modification of the law of value in the world market

Marx believed that the operation of the law of value was not only modified by the capitalist mode of production, but also in the world market (world trade, as contrasted with the home market or national economy). The main reason for this was the existence of different levels of the intensity and productivity of labour in different countries, creating for example a very different cost structure in different countries for all kinds of products. The capitalist mode of production is a concept in Karl Marx’s critique of political economy. ...

Products that took 1 hour of labour to make in country A might take 10 hours to make in country B, a difference in production costs which could strongly influence the exchange values realised in the trade between A and B. More labour could, in effect, exchange for less labour (an "unequal exchange" in value terms) for a prolonged time. In addition, the normal rate of surplus value could be different in different countries. Obviously, traders would try to use this differential to their advantage, with the usual motto "buy cheap, sell dear". The result was an international transfer of value, from countries with a weaker bargaining position to those with a stronger one. In Marxian political economy, exchange value refers to one of three major aspects of a commodity, i. ... Unequal exchange is a concept used in Marxian economics to denote forms of exploitation which commercial trade of any type can involve, if objects of unequal value are being exchanged or traded. ... Surplus value, according to Marxism, is unpaid labour that is extracted from the worker by the capitalist, and serves as the basis for capitalist accumulation. ...

Among German Marxists, Marx's fragmentary remarks on the law of value in a world market setting stimulated an important theoretical debate in the 1970s and early 1980s. One aim of this debate was to move beyond crude Ricardian interpretations of comparative advantage or comparative costs in explaining the pattern of world trade. To some extent similar debates took place in the USA (cf. Anwar M. Shaikh's work), France (Samir Amin) and in Japan (cf. e.g. Makoto Itoh's work available in English). Look up Ricardo in Wiktionary, the free dictionary. ... In economics, David Ricardo is credited for the principle of comparative advantage to explain how it can be beneficial for two parties (countries, regions, individuals and so on) to trade if one has a lower relative cost of producing some good. ... Samir Amin (b. ... Please wikify (format) this article or section as suggested in the Guide to layout and the Manual of Style. ...

In particular, when the volume of intra-industry trade (IIT) between countries grows (i.e. the same kinds of products are both imported and exported by a country, e.g. cars, wine, beer, clothes, vegetables), and when different branches of the same multinational import and export between countries with their own internal price regime, comparative advantage theories do not apply. Nowadays, Marxian scholars argue, comparative advantage survives mainly as an ideology justifying the benefits of international trade, not as an accurate description of that trade (some economists however draw subtle distinctions between comparative "advantages" and comparative "costs", while others switch to the concept of competitive advantage). Intra-industry trade refers to the exchange of products belonging to the same industry. ... An ideology is an organized collection of ideas. ... Competitive advantage (CA) is a position that a firm occupies in its competitive landscape. ...

The operation of the law of value in the world market might however seem rather abstract, in view of the phenomena of unequal exchange, differences in accounting norms, protectionism, debt-driven capital accumulation and gigantic differences in currency exchange rates between rich and poor countries. These phenomena can create very a significant distortion in world trade between market prices for goods, and the real production costs for those goods, resulting in superprofit for the beneficiaries of the trade. Unequal exchange is a concept used in Marxian economics to denote forms of exploitation which commercial trade of any type can involve, if objects of unequal value are being exchanged or traded. ... Protectionism is the economic policy of restraining trade between nations, through methods such as high tariffs on imported goods, restrictive quotas, a variety of restrictive government regulations designed to discourage imports, and anti-dumping laws in an attempt to protect domestic industries in a particular nation from foreign take-over... Most generally, the accumulation of capital refers simply to the gathering or amassment of objects of value; the increase in wealth; or the creation of wealth. ... Superprofit (or surplus profit or extra surplus-value; in German: extra-Mehrwert), is a concept in Karl Marxs critique of political economy, subsequently elaborated by Lenin and other Marxist thinkers. ...

Jayati Gosh writes:

"While developing countries as a group more than doubled their share of world manufacturing exports from 10.6 per cent in 1980 to 26.5 per cent in 1998, their share of manufacturing value added increased by less than half, from 16.6 per cent to 23.8 per cent. By contrast, developed countries experienced a substantial decline in share of world manufacturing exports, from 82.3 per cent to 70.9 per cent. But at the same time their share of world manufacturing value added actually increased, from 64.5 per cent to 73.3 per cent." [2]

That is, the value and physical volume of manufactured exports by developing countries increased gigantically more than the actual income obtained by the producers. Third world exporters might have got mighty rich, but the reality is that third world nations relatively speaking received less and less for what they produced for sale in the world market, even as they produced more and more; this is also reflected in the international terms of trade for manufactured products. For the Jamaican reggae band, see Third World (band). ...

The postulate of the law of value does however lead to the Marxian historical prediction that global prices of production will be formed by world competition among producers in the long term. That is, the conditions for producing and selling products in different countries will be equalised in the long run through market integration; this will be reflected also in International Financial Reporting Standards. Thus globalisation means that incipiently the "levelling out of differences in rates of profit" through competition begins to operate internationally. Trading ratios and exchange-values for products sold globally would thus become more and more similar, in the long term. This hypothesis can obviously be empirically tested by means of international price comparisons.-1... International Financial Reporting Standards (IFRS) are standards and interpretations adopted by the International Accounting Standards Board (IASB). ... Globalization is a term used to describe the changes in societies and the world economy that are the result of dramatically increased trade and cultural exchange. ...

A comment by Marx on the law of value

In his letter to Louis Kugelmann of July 11, 1868, Karl Marx commented gruffly: Ludwig Kugelman(n), or Louis Kugelmann (February 19, 1828, Lemförde - January, 9. ... Karl Heinrich Marx (May 5, 1818 – March 14, 1883) was a 19th century philosopher, political economist, and revolutionary. ...

"As for the Centralblatt, the man is making the greatest concession possible by admitting that, if value means anything at all, then my conclusions must be conceded. The unfortunate fellow does not see that, even if there were no chapter on ‘value’ at all in my book, the analysis I give of the real relations would contain the proof and demonstration of the real value relation. The chatter about the need to prove the concept of value arises only from complete ignorance both of the subject under discussion and of the method of science. Every child knows that any nation that stopped working, not for a year, but let us say, just for a few weeks, would perish. And every child knows, too, that the amounts of products corresponding to the differing amounts of needs demand differing and quantitatively determined amounts of society’s aggregate labour. It is self-evident that this necessity of the distribution of social labour in specific proportions is certainly not abolished by the specific form of social production; it can only change its form of manifestation. Natural laws cannot be abolished at all. The only thing that can change, under historically differing conditions, is the form in which those laws assert themselves. And the form in which this proportional distribution of labour asserts itself in a state of society in which the interconnection of social labour expresses itself as the private exchange of the individual products of labour, is precisely the exchange value of these products. Where science comes in is to show how the law of value asserts itself. So, if one wanted to ‘explain’ from the outset all phenomena that apparently contradict the law, one would have to provide the science before the science. It is precisely Ricardo’s mistake that in his first chapter, on value, all sorts of categories that still have to be arrived at are assumed as given, in order to prove their harmony with the law of value. On the other hand, as you correctly believe, the history of the theory of course demonstrates that the understanding of the value relation has always been the same, clearer or less clear, hedged with illusions or scientifically more precise. Since the reasoning process itself arises from the existing conditions and is itself a natural process, really comprehending thinking can always only be the same, and can vary only gradually, in accordance with the maturity of development, hence also the maturity of the organ that does the thinking. (...) The vulgar economist has not the slightest idea that the actual, everyday exchange relations and the value magnitudes cannot be directly identical. The point of bourgeois society is precisely that, a priori, no conscious social regulation of production takes place. What is reasonable and necessary by nature asserts itself only as a blindly operating average. The vulgar economist thinks he has made a great discovery when, faced with the disclosure of the intrinsic interconnection, he insists that things look different in appearance. In fact, he prides himself in his clinging to appearances and believing them to be the ultimate. Why then have science at all? But there is also something else behind it. Once interconnection has been revealed, all theoretical belief in the perpetual necessity of the existing conditions collapses, even before the collapse takes place in practice. Here, therefore, it is completely in the interests of the ruling classes to perpetuate the unthinking confusion. And for what other reason are the sycophantic babblers paid who have no other scientific trump to play except that, in political economy, one may not think at all!" [3] Bourgeois at the end of the thirteenth century. ...

A comment by Frederick Engels on the law of value

"...the Marxian law of value holds generally, as far as economic laws are valid at all, for the whole period of simple commodity production — that is, up to the time when the latter suffers a modification through the appearance of the capitalist form of production. Up to that time, prices gravitate towards the values fixed according to the Marxian law and oscillate around those values, so that the more fully simple commodity production develops, the more the average prices over long periods uninterrupted by external violent disturbances coincide with values within a negligible margin. Thus, the Marxian law of value has general economic validity for a period lasting from the beginning of exchange, which transforms products into commodities, down to the 15th century of the present era. But the exchange of commodities dates from a time before all written history — which in Egypt goes back to at least 2500 B.C., and perhaps 5000 B.C., and in Babylon to 4000 B.C., perhaps to 6000 B.C.; thus, the law of value has prevailed during a period of from five to seven thousand years." (source: Supplementary Afterword to Das Kapital Volume 3). [4] Simple commodity production (also known as petty commodity production; the German original word is einfache Warenproduktion) is a term coined by Frederick Engels to describe productive activities under the conditions of what Marx had called the simple exchange of commodities, where independent producers trade their own products. ... Das Kapital (Capital, in the English translation) is an extensive treatise on political economy written by Karl Marx in German. ...

The law of value in non-capitalist societies

There has been a long and drawn-out debate among Marxists about whether the law of value also operates in non-capitalist societies where production is directed by the state authorities.

In his famous pamphlet Economic Problems of the USSR, Joseph Stalin argued that the law of value did operate in the socialist economy of the USSR. After all, Marx had stated in Das Kapital that: Josef Vissarionovich Dzhugashvili (Georgian: , Ioseb Besarionis Dze Jughashvili; Russian: , Iosif Vissarionovich Dzhugashvili) (December 18 [O.S. December 6] 1878[1] – March 5, 1953), better known by his adopted name, Joseph Stalin (alternatively transliterated Josef Stalin), was General Secretary of the Communist Party of the Soviet Unions Central Committee from... Socialism is a social and economic system (or the political philosophy advocating such a system) in which the economic means of production are owned and controlled collectively by the people. ... State motto (Russian): Пролетарии всех стран, соединяйтесь! (Transliterated: Proletarii vsekh stran, soedinyaytes!) (Translated: Workers of the world, unite!) Capital Moscow Official language None; Russian (de facto) Government Federation of Soviet republics Area  - Total  - % water 1st before collapse 22,402,200 km² Approx. ... Das Kapital (Capital, in the English translation) is an extensive treatise on political economy written by Karl Marx in German. ...

"...after the abolition of the capitalist mode of production, but still retaining social production, the determination of value continues to prevail in the sense that the regulation of labour-time and the distribution of social labour among the various production groups, ultimately the book-keeping encompassing all this, become more essential than ever." [5]

Supporters of the theory of state capitalism in the USSR and scholars such as Andre Gunder Frank likewise believed that the law of value operated in Soviet-type societies. However, it is not always clear what they mean by the law of value, beyond the vague idea that the direct producers remain dominated by their own products, or that labour costs remain important, or that Soviet-type societies remained influenced by the world market. There are multiple definitions of the term state capitalism. ... Andre Gunder Frank (Berlin, February 24, 1929 – Luxembourg, April 23, 2005) was a German economic historian and sociologist who was one of the founders of the Dependency theory and the World Systems Theory in the 1960s. ...

According to Ernest Mandel, the law of value, as a law of exchange, did influence non-capitalist societies to some extent, inasmuch as exchange and trade persisted, but because the state directed the bulk of economic resources, the law of value no longer ruled or dominated resource allocation. The best proof of that was, that there was mostly no clear relationship at all anymore between the exchange-value of goods traded, and what it really cost to produce them; accounting information, insofar as it was valid, might in fact be unable to show anything about the real nature of resource allocation. Insofar as social priorities ensured that people got what they needed, that was a good thing; but insofar as resources were wasted because of a lack of sensible cost-economies, it was a bad thing. Cost-accounting is, of course, no more "neutral" than profit-accounting; a lot depends on what costs are included and excluded in the calculation. Ernest Mandel Ernest Ezra Mandel, also known by various pseudonyms such as Ernest Germain, Pierre Gousset, Henri Vallin, Walter etc. ... It has been suggested that Accounting scholarship be merged into this article or section. ...

Che Guevara adopted a similar view in socialist Cuba; if more resources were directly allocated to satisfy human needs, instead of commercially supplied, a better life for people would result. Guevara organised an interesting conference at which the theoretical issues were debated (see Silverman 1971). Ernesto Guevara de la Serna Lynch (May 14, 1928 – October 9, 1967), commonly known as Che Guevara, el Che, or simply Che, was an Argentine Marxist revolutionary, political figure, author, military theorist, and leader of Cuban and internationalist guerrillas. ...

Some Marxist authors, such as John Weeks, have argued that the law of value is unique to an economy based on the capitalist mode of production. They reject the claim by Engels that the law of value is associated with the entire history of economic exchange (trade), and modified when all inputs and outputs of production have become marketed commodities. Marxism is the political practice and social theory based on the works of Karl Marx, a 19th century philosopher, economist, journalist, and revolutionary, along with Friedrich Engels. ... The capitalist mode of production is a concept in Karl Marx’s critique of political economy. ...

Other Marxists (including Ernest Mandel and the Japanese scholar Kozo Uno) followed Engels in believing that the law of value emerges and develops from simple exchange. Here, it is argued that, if the law of value was unique to capitalism, it becomes impossible to explain the development of precapitalist commodity exchange or the evolution of trading processes in a way consistent with historical materialism and Marx's theory of value. So a better approach, it is argued, is to regard the application of the law of value as being modified in the course of the expansion of trade and markets, including more and more of production in the circuit of capital. In that case, a specific society must be investigated to discover the regulating role that the law of value plays in economic exchange. Ernest Mandel Ernest Ezra Mandel, also known by various pseudonyms such as Ernest Germain, Pierre Gousset, Henri Vallin, Walter etc. ... Historical materialism is the methodological approach to the study of society, economics, and history which was first articulated by Karl Marx (1818-1883), although Marx himself never used the term (he referred it as philosophical materialism, a term he used to distinguish it from what he called popular materialism). Historical...

Criticism

Traditionally, criticism of Marx's law of value has been of three kinds:

• conceptual
• logical
• empirical

The conceptual criticism concerns the concept of value itself. For Marx, value was an objectified social characteristic of labour-products, exchanged in an economic community, given the physical reality that products took a definite amount of society's labour-time to produce. A product had a value, regardless of what any particular person might think about it, priced or unpriced. Critics however argue that economic value is something purely subjective, determined by personal preferences and marginal utility; only prices are objective. One of the first Marx-critics to argue this was the Austrian Eugen von Bohm-Bawerk. Economic subjectivism is the theory that value is a feature of the appraiser and not of the thing being valued. ... “Marginal revolution” redirects here. ... For people whose family name is Price see Price (disambiguation). ... Eugen von Böhm-Bawerk Eugen von Böhm-Bawerk (February 12, 1851 - August 27, 1914) made important contributions to the development of Austrian economics. ...

However, many prices are not objective either - they are only ideal prices used for the purpose of calculation, accounting and estimation, not actually charged or applying directly to anything real. Yet, these notional prices can nevertheless influence economic behaviour. Economists then debate about when a price can be said to be "objective". Objectivity of prices, could be taken to mean e.g. only that the prices are empirically observable, not that they are independent from subjective values. But many prices are not empirically observable either, they exist only as a numerical idea. Real prices and ideal prices refers to a distinction between actual prices paid for products, services, assets and labour, and computed prices which are not actually charged o