In the first entry of the “Debunking Kapitalism 101: LVT” I will examine the main points of his video “Law of Value- 2. The Fetishism of Commodities” and provide a refutation.
Now let’s look outside the workplace at the market. In the market things are different. The organization of work, the division of labor, doesn’t happen through direct social relations between people. In the market the products of labor confront each other as commodities with values. These interactions between things act back upon production. They are what send signals to producers to change their labor, to produce more, produce less, go out of business, expand business, etc.
Coal miners, bakers, carpenters and chefs don’t directly relate to each other as workers. Instead the products of their labor, coal, bread, cabinets and pasta, meet in the market and are exchanged with one another.
In the analogy provided by “Kapitalism” we have a extremely simple economy. Two individuals and a single product. In reality we have billions of individuals acting rationally in their own self interest making so many products and selling so many services that their are too many to count. On top of that we have a massive amount of knowledge in the economy and each individual only has a small portion of that knowledge.
In reality billions of people can not have direct interaction for every product they make. The farmer growing corn would have to have direct interaction with everyone buying his product. The producer of animal food, human food or fuel and possibly multiple agents in each industry that the farmer sells to. Now take a step back from this single farmer and his buyers. Add billions of people, in different countries, representing millions (if not billions) of firms and interests interacting. Direct communication is simply impossible.
Take Milton famous example of the pencil. These signals denounced by “Kapitalism” for being indirect and impersonal are they only way a advanced economy can operate. The only way everyone’s knowledge can be contributed to the economy.
Money is the god of commodities…Yet money is just a scrap of paper, a pile of shiny rocks, a digit in a computer… It only has this power because it is an expression of social relations.
Money is a claim on goods. One dollar claims one dollar worth of goods. Ten dollars claims ten dollars worth of goods. So on and so on (commodity money claims commodities). So no money is not just a scrap of paper. It is a claim on goods. That is why it has power. Because it allows for the person who owns it to receive goods they value more.
But we don’t see these relations.
Yes! And that is because these “relations” works so well. The price system works so well you do not even need to know it is their and most people do not know it is their. To steal a analogy from Milton Freidman. It never occurs to you that your car is complicated business until it breaks at 3 am. That is because it works so well!!
The illusion that value comes from the commodity itself and not from the social relations behind it is a “fetish”.
Actually value is subjective. It is not entrensic nor does it come from “social relations”
We see these fetishistic ideas in modern day mainstream economic theory in the idea that value comes from the subjective experience between a consumer and a commodity…
Yes. I will provide a proof. Some people would pay millions for modern art. Some would have to be paid to take it. That is because they have subjective values.
…and that capital creates value by itself.
No. Mainstream economics think’s it is subjective. You almost had it.
Profit appears to spring out of exchange itself, yet Marx worked hard to explain how profit actually originates in production through the unequal relations between capital and labor in the workplace.
Actually profits are because entrepreneurs forgo current consumption, take risks, and organizing production.
Relations between producers are only indirect, only coordinated through the mystifying world of commodities.
Actually the are coordinated by the price system and yes. The example of the pencil shows why.
Commodities really do have value.
Well that depends on who you ask 😉
Labor takes the form of value embodied in commodities.
Labor does not provide value as value is subjective. I will provide another proof. The diamond-water paradox. Digging a diamond require many labor hours but finding water does not. We value diamonds more so this is in line with the LVT. But if we find the diamond while hiking this is minimal effort yet we still value the water less and value the diamond no less.