- Capitalism and Alternatives -

Fantasy Theories of Value

Posted by: Samuel Day Fassbinder ( Citizens for Mustard Greens, USA ) on November 16, 1999 at 10:49:08:

In Reply to: LTV and STV posted by bill on November 15, 1999 at 12:12:51:

: Gee:

: As it looks above I would say simply that knowing how many people want something (I assume you mean demand in the economic sense) enables you to calculate revenue, costs and all that based on those jolly principles of accounting.

SDF: "How many people want something" -- huh? Effective demand is the TOTAL AMOUNT OF MONEY CHASING A PRODUCT. This can have absolutely nothing to do with an accounting of desire, no matter its pretenses to seriousness -- the "want something" of 800 million of the world's people for food means nothing to capitalism when compared to Bill Gates' one-person effective demand for lawyers.

Also, an excess of products chasing after money creates crises of overproduction, another capitalist mismatch between production and "desire". Check out this article, which seems to explain why you have countries in Africa which are net food exporters and which are at the same time recipients of famine relief. Local production-for-use, under capitalism, is forced out of business in favor of the resolution of US crises of overproduction through "famine aid," and famine persists as a result.


: The LTV serves as a measure on the production side of commodity exchange.

SDF: If something is exchanged, it must first be produced. The LTV is an attempt to "make something" of the equivalence of the aggregates of production and production-for-exchange. The dispute here is not whether it is correct, but how much it explains.

: The STV (Subjective Theory of Value) along with variants such as "Laws of Diminishing Returns" attempt to measure desire, primarily from the consumer end.

SDF: Ludwig von Mises, in his (1956) defense of capitalism titled The Anti-Capitalistic Mentality, tells us that "capitalism is essentially a system of mass production for the satisfaction of the needs of the masses" (p. 49). Which is of course wrong, for the reason specified above -- mass production under capitalism serves effective demand, not the needs of the masses. The idea of a "subjective theory of value" thus poses as an intellectual handmaiden to a sales pitch for capitalism. If a "subjective theory of value" exists within the world of commerce, it can be summed up in that typical advertising lie: "we're here to serve you". At their very best, attempts to "measure desire" are attempts to measure one's love for a good bottle of wine, having nothing to do with social science. Ditch the Fantasy Theory of Value.

: The distinction may also be relflected along a continuum from "Doing" to "Having" in terms of self-identity.

: If one watches the "Lifestyles of the Rich and Famous" - identification of the protagonists is almost invariably in terms of possessions, ownership, ie. Having. If it is ever Doing, it is in the context of vacationing or consumption - Never Production.

: On the other hand, amongst the working poor, self-identification is more likely to be in terms of Doing. "I'm a plumber" "secretary", "gardener", "teacher", etc. It is generallly from the Production side.

SDF: This idea of "self-identification in terms of doing" is really an attempt to reclaim "doing" from the ALIENATION OF LABOR, i.e. when you sell your work-hours to someone else. Under capitalism, of course, doing feeds the process of capital accumulation.

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