Karl Marx’s Analytical System

Here, in 1865, we find Karl Marx anxious to not quite say that commodity prices are equal on average to their values but only that they are regulated by their labor values. What are commodity prices equal to on average? What, that is, determines what earlier economists would have called the value of a commodity—its average or natural price? Marx does not say. But he does, I think, realize that it would be rhetorically bad for him to flat-out say that he is not using the word "value" to mean "average or natural price". But if average prices are not labor values then what happens to Marx's entire surplus-value analysis? Average profits are then equal to value minus labor value plus surplus-value, and is there anything in the system to make the deviations of value from labor value cancel out so that you can say that at least in aggregate profits are surplus value? No. It is not clear to me how much Marx knew of how deep the trouble went:

Karl Marx (1865): Value, Price, and Profit https://delong.typepad.com/files/marx-vpp.pdf: 'At the moment when supply and demand equilibrate each other, and therefore cease to act, the market price of a commodity coincides with its real value, with the standard price round which its market prices oscillate. In inquiring into the nature of that VALUE, we have therefore nothing at all to do with the temporary effects on market prices of supply and demand. The same holds true of wages and of the prices of all other commodities.... Normal and average profits are made by selling commodities not above, but at their real values.... Deduct from the value of a commodity the value replacing the value of the raw materials and other means of production used upon it, that is to say, deduct the value representing the past labour contained in it, and the remainder of its value will resolve into the quantity of labour added by the working man last employed.... The values of commodities, which must ultimately regulate their market prices, are exclusively determined by the total quantities of labour fixed in them.... Capitalistic production moves through certain periodical cycles... [with] the market prices of commodities, and the market rates of profit, follow these phases, now sinking below their averages, now rising above them. Considering the whole cycle, you will find that one deviation of the market price is being compensated by the other, and that, taking the average of the cycle, the market prices of commodities are regulated by their values...

#noted #2019-12-01