The Importance of Marxism—(continued)

[PJShannon]

Following is a discussion on the page titled: The Importance of Marxism—(continued) .
Below is the discussion so far. Feel free to add your own comments!

[Sympo]

"For example: There are six customers in a shop, each of whom, shall we say, demands a tin of biscuits, and the shopkeeper has precisely six tins of biscuits to sell. What happens in these circumstances ?"I'm discussing the LTV with a non-marxist and I basically took this quote as a part of my reply. The reply I got was this:"The biscuit example is a stylized scenario. In the real world, a shop owner won't change his pricing policy based on the specific circumstances of one moment and try to clear the market at any point. He is perfectly willing to keep the biscuits as inventory in order to sell them later for a higher price, or to even throw them away rather than to lower the price until it clears immediately, so as to not destroy his total income down the way (or give customers the incentive to wait for the late-night sales).In reality, the shop owner bases his pricing on overall supply and demand dynamics. How much money is he willing to trade his biscuits for? In other words: what are the lowest costs plus profits he's willing to sell X amounts of biscuits (the supply curve)and at what price point are customers willing to buy the biscuit amount of X (the demand curve)?But even in a "Robinson Crusoe" economics example: there are 6 biscuits (and no way to make more) and 6 customers, each willing to buy one of the biscuits at up to price X. In that case supply and demand still determine most of the transaction: Supply is determined by the biscuit owners own opportunity costs (what is the biscuit worth to him if he doesn't sell it?) and demand is determined by the customers' willingness to buy a single biscuit. Of course we restricted the possibility to increase quantity artificially and ruled out competition. But supply and demand still matter. This market will clear. Either they are willing to pay what he asks for or not. It doesn't need to follow a Walrasian concept of equilibrium to be true. Equilibrium is simply a state in which nothing and all forces are at balance. Whether or not those biscuits will get sold at the end of the day, if nobody feels the need to act, that's an equilibrium." Anyone with more knowledge on the LTV who could argue against this?

[ALB]

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there are 6 biscuits (and no way to make more)

Why this assumption? It rules out examining the conditions under which biscuits are produced and, typical of bourgeois marginalist economics, concentrates on the market. As comrade Goldstein went on to point out:

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Actually, of course, the average price of an article is fixed prior to supply and demand.

[DJP]

Marx's theory was an attempt to explain the dynamics of capitalism, how labour is regulated and distributed in a market economy. It's not a theory of equilibrium price.

[Young Master Smeet]

Quote:

 costs plus profits he's willing to sell X amounts of biscuits

And that is your interlocutor accepting the key point, the price is the cost of production plus a prevailing rate of profit.  he value is a long way removed from that.  The point is that when we take two different products, say biscuits and jet airplanes, when the supply curve hjits the demand curve, i.e. where supply hits demand, their prices aren't the same, so there must be some otehr factor influencing the percieved worth of the goods.So if there are 6 biscuits and 6 biscuits are wanted, then why is the price different from when 6 jet aiplanes are wanted and 6 are available?Answer, cost of production. That being so, the value cannot be entirely subjective.

[Author]

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