Law of value . Objective economic law of a particular nature that acts in all socioeconomic formations based on private ownership of the means of production and constitutes a spontaneous regulator of mercantile production. The action of the law of value transcends the frontiers of capitalism and lasts in the first phase of communist socioeconomic formation.
Summary
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- 1 General
- 2 Definition
- 1 Spontaneous distribution of work
- 2 Differentiation of producers
- 3 Emergence of capitalist relations
- 4 Law of value and the development of the productive forces
- 3 Classical positions of small producers
- 4 Merchandise fetishism
- 5 Anarchy of production
- 6 External links
- 7 Sources
General
Economic law of mercantile production, law of the equivalent exchange of goods so that the production and exchange of goods are carried out at the rate of socially necessary work invested in their production. In the commercial economy based on private property, the law of value spontaneously regulates the distribution of the means of production and work among the different spheres of the economy. In the system of simple capitalist production of goods, said law works under the conditions of competitive struggle and the anarchy of production, through the mechanism of the deviation of prices from value. Spontaneous fluctuations in prices around value oblige producers of goods to increase or decrease the production of such and such goods,
The spontaneous action of the law of value stimulates the development of the productive forces, the improvement of production. The producer of goods whose individual value exceeds the social value, when selling them, does not cover expenses and is ruined. Whoever applies new techniques and in the production of the merchandise invests less work in comparison with the socially necessary expenses, gets rich. This motivates other merchandise producers to increase work performance through new technical procedures, better organizing production and reducing costs. In this way, the law of value accentuates economic inequality and the competitive struggle between commodity producers, leads to their differentiation. Most of them are ruined and are going to swell the ranks of the salaried workers; a minority, they get rich, They increase the volume of production and become capitalists. By the action of the law of value, the simple mercantile economy is transformed into a capitalist mercantile economy.
In developed capitalist mercantile production, the law of value manifests itself in the form of the average (general) share of profit, the price of production. Under imperialism, the action of the law of value becomes more complicated and its destructive force intensifies as a result of the dominance of monopolies, the appearance of the monopoly price and the high monopoly profit. In socialist society mercantile production endures, therefore the law of value. Under socialism, the State uses this law, consciously and planned with a view to building communism. The socialist state, knowing the law of value, consciously fixes the prices of goods based on the socially necessary investments of labor to produce them.
The conscious use of the action of the law of value makes it possible to establish a correct price correlation between the various commodities, develop production more efficiently, raise the standard of living of workers. The socialist state, using the price mechanism, can actively influence the economic activity of companies, their individual labor investments. The prices of the goods can deviate from the value of the same, at the discretion of the State. In this is revealed, in part, the use of the law of value. By setting prices that deviate from value, the Stateinfluences individual investments in order to reduce them, redistributes resources among the different branches of the national economy. The role of the law of value is greatly increased, above all, in the period of the gradual transition to communism.
The planned use of the law of value and the related monetary-mercantile categories (price, cost price, profit, etc.) greatly accelerates the development of society. Thorough knowledge of the law of value and its correct use allow socialist society to achieve maximum economic results with minimal social investment in work. When the society passes to the single communist property and to the distribution according to the needs, the monetary-mercantile relations, and with them the law of value, will lose their economic validity and will be extinguished.
Definition
The law of value is the law that regulates the development of mercantile production through the exchange of goods, in accordance with the amount of socially necessary abstract work materialized in them. The law of value is the fundamental law of simple commodity production.
Spontaneous distribution of work
In any form of social production, there is a need to distribute labor in certain proportions among the different spheres of production. In the socialist society based on social property, labor and the means of production, they are distributed in a planned way among the various sectors of production, attending to the needs of the people.
In the economy where commercial monetary relations based on private property prevail, the distribution of labor among the different spheres of production takes place spontaneously according to the action of the law of value. The mechanism of action of the law of value in the conditions of the spontaneous and anarchic mercantile economy presupposes the fluctuation of prices around value. The deviation of the prices around the value comes to be like the measure that indicates the existing disproportions in the distribution of social work. If in one sphere of production the applied labor is insufficient and the demand for the produced commodity remains unsatisfied, the price of the commodity will be greater than its value. Otherwise, the price will drop below its value. Only the price coincides with its value when the demand and supply of the produced merchandise are equated. Therefore, the price fluctuation mechanism depending on the correlation between the demand and the supply of merchandise, not only signals the change in disproportions, but is the tool for its spontaneous regulation.
We are going to suppose that at a given moment a higher demand for fabrics and a lower demand for footwear are observed in the market. The price of fabrics will rise above its value, and that of footwear will fall below it. This will result in footwear producers not getting full compensation for the investment in their work, and fabric producers, on the contrary, benefit from a certain additional part of social work. In such conditions, a shift of work inevitably begins from the sectors that suffer losses to those that make profits. The number of fabric producers will increase and the number of shoe producers will decrease. The number of fabrics launched on the market will grow and that of footwear will decrease.
In the process of distributing labor among the different sectors, value becomes the nucleus around which the prices of merchandise fluctuate and through these spontaneous fluctuations in prices, the law of value distributes social labor according with the needs and regulates the establishment of certain proportions between the various branches of production.
In each branch of the mercantile economy, either supply exceeds demand or supply falls below demand. This is inescapable. No one consciously determines the passage of work from one branch to another. This step is done spontaneously. Therefore, the coincidence of supply with demand can be only temporary, and its lack of coincidence is a common and current phenomenon in the conditions of commercial production based on private property.
Differentiation of producers
The spontaneous action of the law of value and its mechanism of action in the conditions of commodity production based on private property causes constant changes in the economic situation of commodity producers. A competition fight inevitably takes place between them. If the price of a commodity rises, the producers win and the buyers lose. If the price falls, the opposite occurs: producers lose and buyers win. Once certain limits have been exceeded,
If even the commodity were sold for its value, the contradiction between individual and socially necessary labor leads to the differentiation of the producers of commodities. Those who invest less work than the socially necessary, by selling the goods according to their social value, will win and get rich. On the contrary, the producers of merchandise whose individual labor investments are superior to those socially necessary, when selling their products according to their social value will suffer losses; their situation will inevitably worsen and production will begin to decline. Ultimately they will be ruined, they will be deprived of the means of production and therefore the possibility of living at the cost of their personal work will be extinguished.
The situation of producers whose individual investments coincide with those that are socially necessary is characterized by extreme instability. Socially necessary working time does not remain stable. As soon as the group of producers in better conditions begin to produce the fundamental mass of merchandise, the magnitude of the value will decrease. In this case, the socially necessary work time becomes the time invested by the group that is in better conditions. The group that is in average conditions will find itself in the situation of the producers of goods whose individual work is greater than the socially necessary, which will inevitably be reflected in the situation of their business.
Competition and contradiction between individual work and socially necessary work inexorably lead to the differentiation of commodity producers. Some enrich themselves and increase the scale of production. others go bankrupt and become proletarians.
Emergence of capitalist relations
The process of differentiation of producers, determined by the action of the law of value, leads at a certain stage of its development to the emergence of capitalist relations of production. A new layer begins to form from the group of rich producers: the bourgeoisie; and of the ruined, the proletariat. This process comes gradually but inevitably.
Initially, the production process is carried out by the individual producer and his family. But as the producer expands production and accumulates wealth, the need for additional workforce arises, which is incorporated by hiring it. In its beginnings the worker is hired for a certain time and his work is taken advantage of together with the personal work of the wealthy owner. Gradually, wage labor completely outweighs the work of the owner and his family. In this way the producers of wealthy goods become capitalists, who develop the production process on the exclusive basis of wage labor.
Small producers who go bankrupt continue to be formally independent and have their own business, but their incomes are insufficient and their businesses begin to decline. The need for additional income appears. Due to this situation they begin to be hired temporarily. But when they reach a certain stage in view of the losses, they are forced to sell their entire labor force. In such a case, the main source of the means of existence is no longer their own business, but the salary received for the work they do in someone else’s business. Definitely these producers become proletarians, entirely deprived of the means of production, living off the sale of their labor power.
Lenin brilliantly showed the process of transforming the wealthy of society into capitalists, and the ruined into proletarians. On the basis of the Marxist theory of mercantile production and the law of value, Lenin established the following transcendental theoretical postulate: “small production generates capitalism and bourgeoisie constantly, every day, every hour, spontaneously and en masse.”
Law of value and the development of the productive forces
The contradiction between individual work and socially necessary work is the driving force for the development of the productive forces of the mercantile economy. This contradiction forces commodity producers to constantly raise the productivity of labor through the improvement of technique and the organization of production.
The fierce competition, in the course of which only the strongest emerge and the others are ruined and proletarianized, forces the producers of merchandise to embark on the path of technical improvement. Otherwise, they are inexorably ruined.
The increase in the productivity of labor causes the value of goods to decrease and as a result, prices to fall. This in turn gives a new impetus to increased labor productivity. The development of the productive forces and the increase in the productivity of labor are demanded in mercantile production due to the nature of production relations. In mercantile production, progress in the development of the productive forces is obtained much faster than in the natural economy.
It would be wrong on this basis to idealize the law of value. It is true that the law of value stimulates the development of the productive forces, but deep contradictions are inherent in that development. Progress in their development is made at the cost of proletarianization and the ruin of hundreds of thousands of small commodity producers. The development of social production develops spontaneously, anarchically, and is related to the constant infringement of the necessary proportions. Some products are made in greater quantity and others in less quantity; in some sectors there is overproduction and in others production is insufficient.
The action of the law of value results in the waste of large masses of social work. Each commodity producer is interested in investing the least amount of labor in the production of one or another commodity. In this sense, the law of value requires a labor economy, but in the mercantile economy, the work of commodity producers is not always a necessary integral part of social work. Today it may be necessary, but tomorrow, due to changes in demand, it may be unnecessary. It is periodically warned that not only certain producers, but entire branches turn out to be unnecessary for the satisfaction of social needs. Huge masses of work invested in these branches are useless.
Classical positions of small producers
The investigation of mercantile production and the law of value reveal the class positions of the simple producer of merchandise. As private owners, small producers aspire to get rich, to become part of the bourgeoisie, and in some cases they succeed. On the other hand, they are workers, who work themselves without exploiting anyone. A large part of these simple producers of merchandise, due to competition, face a chaotic economic situation and go bankrupt. In the period of acute class struggle, the share of the producers of enriched goods is put on the side of the bourgeoisie, and the layer that is ruined and proletarian, to the working class. The middle layer maintains a wavering class position. Almost all of the mass of small producers is made up of peasants. For this reason, the question of the alliance with the peasants is one of the most current problems of the labor movement. The peasant can act together with other progressive forces in the struggle for democratic and popular transformations, but in the period of the struggle against capitalism for the establishment of socialism, the more affluent peasantry forms an alliance with the bourgeoisie. Not all the peasants can be allies of the proletariat in the fight for the socialist revolution, but the part that constitutes the majority, the one that is in a process of impoverishment and ruin and is close to the proletariat due to its situation. The peasant can act together with other progressive forces in the struggle for democratic and popular transformations, but in the period of the struggle against capitalism for the establishment of socialism, the more affluent peasantry forms an alliance with the bourgeoisie. Not all the peasants can be allies of the proletariat in the fight for the socialist revolution, but the part that constitutes the majority, the one that is in a process of impoverishment and ruin and is close to the proletariat due to its situation. The peasant can act together with other progressive forces in the struggle for democratic and popular transformations, but in the period of the struggle against capitalism for the establishment of socialism, the more affluent peasantry forms an alliance with the bourgeoisie. Not all the peasants can be allies of the proletariat in the fight for the socialist revolution, but the part that constitutes the majority, the one that is in a process of impoverishment and ruin and is close to the proletariat due to its situation.
Merchandise fetishism
Main Article : Merchandise fetishism
By dominating private ownership of the means of production, the relations between the producers of merchandise in the production process, conditioned by the social division of labor, are manifested in the change of the products of their labor. , through the movement of goods.
The social nature of private work, its social recognition are only expressed in the spontaneous process of change. Hence, social relations between commodity producers take the form of relations between things, that is, they materialize. The spontaneous character of the relations that dominate over men, externally assumes the form of domination of certain things over them. The dependence of commodity producers on the market is expressed as domination over them of a certain supernatural force of things (commodity and money). This reification of the relations of production, that is to say, the manifestation of relations between men in the form of relations between things, was called by Marx fetishism of the commodity.
The cult of money , dominant in the capitalist world, is the maximum manifestation of commodity fetishism. The latter is a historical category, existing only under the conditions of commodity production based on private property.
Production anarchy
Spontaneous and chaotic character of the development of mercantile production based on private property, lack of plan and organization of the national economy as a whole.
When the ownership of the means of production is private, the goods are produced without a prior calculation of social needs, under the determining action of spontaneous market demand, of the oscillation of prices in the market, in bitter competitive struggle. The anarchy of production and competition in simple commodity production inevitably lead to the differentiation of producers and, under certain historical conditions, to the birth of capitalist relations of production.
In bourgeois society, the anarchy of production reaches enormous proportions. As a result of the irreconcilable contradiction between the social character of production and the private capitalist form of the appropriation of the products of labor, the anarchy of production gives rise to enormous unproductive expenses in all spheres of the economy, which manifests itself in which the productive forces are not fully used , in which there is a large army of unemployed, and also in which part of the created production is directly destroyed.
The anarchy of production is revealed with singular clarity in the overproduction economic crises, when the capitalists do not find a solvent demand – given that the situation of the working masses worsens more and more – and reduce production. In the imperialist era, this anarchy is still accentuated, because with the formation of the monopolies the inequality of capitalist development deepens, and the desire to obtain a high monopoly profit intensifies and sharpens the competitive struggle between the monopolies. The anarchy of production and competition constitute a characteristic feature of the capitalist economy, an economic law of capitalism impossible to eliminate within the framework of the latter.
Only after the liquidation of capitalism, after establishing the power of the workers and the means of production becoming social property, is it possible to develop the national economy in a planned way and end the anarchy of production and competition.
