this post was submitted on 04 Jul 2025
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Supply and demand are of secondary concern to production in Marx's analysis. They can explain why something could be bought or sold for a different amount than it's actual value, but if you reach equilibrium between them they vanish and you are left with the actual value of the commodity in question. Although I may be being too flippant with commodity as a term here, one of the smarter bears might be able to correct me if so.
My understanding is that, in the LTV, labor input determines the equilibrium about which prices fluctuate, while supply and demand dynamics drive the fluctuation.
But those fluctuations aren’t net-zero; companies profit on average. Why? I assume it’s some combination of 1) imperfect competition and 2) supply and demand, but I don’t know the details because I’m a huge ignoramus about economics. So I’m curious how Marxist theorists talk about this.
You're getting very good answers on supply and demand from the other bears so I'll leave that to them. But I do want to catch this part.
Marx observed that the movement of productive economies can be simplified to Money→Commodities→More Money in a cycle. Why is there more money each cycle? Where is the new value being generated?
A big part of Capital is just him breaking down the process of commodity production to illustrate that there's no new value being introduced in any way except through labor. Labor is unique in that a laborer can produce more value than it costs to reproduce (feed, clothe, shelter) them.
A company is getting a bunch of workers to produce more value than they have to pay them, a surplus value is produced that can be divided up rather than pocketed by the laborer. That's where profit comes from and that's why they always profit. Supply and demand are subordinate conditions on this basic reality.
ahhhhh, okay.
Does "the cost of reproducing labor" strictly refer to the cost to keep workers alive, or is it more the cost to sustain their expected standard of living?
Although employers pay more than the bare minimum to keep us alive, because we have a little more leverage than that, it's true that they pay the bare minimum they can get away with, as determined by their leverage as employers and our leverage as workers who may or may not be organized. And that minimum is not related to the value produced by our labor — for example, if one low-skill worker operating a machine can spit out $1 million worth of goods in a day, that value does not give the worker any leverage to ask for more pay, because the worker is still replaceable and does not have very much leverage.
I really recommend reading Capital, the theory comm has a book club on it and it's super helpful.
I don't have my copy on me but he does go into this topic at some length, the quick and dirty summary off the top of my head is that the cost of reproduction entails educating a worker enough to do a technical job, enough free time to literally reproduce, recuperate from the wear and tear of work etc. So yes the short answer is that reproducing labor means maintaining a certain standard of living.
However in your example, he would point out several things: the value being added by labor isn't the entire value of the end product. If you make a million dollars in clothing, in the process you use hundreds of thousands of dollars of cloth, the machinery that produces it also requires thousands of dollars in maintenance, the product requires expenditures to physically move it from the factory to the user, etc. So that million dollars of product is not all the work of the laborer in question.
Capital, as a cycle of reinvestment of surplus, also grows in magnitude with each cycle. Labor is contributing proportionally less and less value as time goes on because it's a smaller fraction of the process; this is one of the reasons the rate of profit tends to fall over time. You can compensate for this by reducing the prices of the things it takes to reproduce labor (which conveniently happens with economies of scale) and by increasing the degree of exploitation of labor- longer days, more intense work, etc. as well as lowering wages, but that can only go so far before you're using up workers in a way that is unsustainable.
That's where things like wrangling about hours and compensation, and the leverage of the respective parties, become more relevant. Ideally, from the pov of the capitalist, you break the job down into less and less complex functions that are easier to train people to do, and keep them in conditions where they will agree to increasing intensity and hours worked.
it's looking like I really should, not only to understand the world but also to understand the Marxist perspective on it more deeply, since I call myself one
makes me wonder what will happen when the repression of the global south begins to crack