Irregularities of Capitalist Market: Reconsidering Marx’s “Theory of Market Value“

Kei Ehara
  kei.ehara@gmail.com
  

Abstract

Karl Marx once emphasised continuous fluctuation and dispersion observed in market as the characteristic of the capitalist mode of production, stating “[t]he possibility, therefore, of a quantitative incongruity between price and magnitude of value, i.e. the possibility that the price may diverge from the magnitude of value, is inherent in the price-form itself. This is not a defect, but, on the contrary, it makes this form the adequate one for a mode of production whose laws can only assert themselves as blindly operating averages between constant irregularities.” Whilst this recognition was to reassert itself in the description of the social division of labour and be put as “the anarchy of commodity producing society” by Rudolf Hilferding, the causes and effects of the “irregularities” within the market per se were investigated further by some Japanese Marxians such as Kozo Uno and his followers, making a unique achievement in the “theory of market value” in Capital Vol.3. According to Uno, “[t]he market value of a commodity must reflect an equilibrium of demand and supply, the market value being the centre of the fluctuation of the market price of the commodity. …Hence the determination of the market value of a commodity depends upon the conditions of production under which the supply of the commodity is capable of being adjusted to the demand for it.” This idea correctly recognizes flexible relation between market and production, which allows the coexistence of plural conditions of production in theory. But here Uno skipped one important question: how do capitalists distinguish those plural conditions of production? Both Marx and Uno seem to have taken it for granted that the difference among the conditions of production was obvious. Is it true?

This paper critically expands Uno’s insight on the theory of market value through the formulation on the profitability of conditions of production, thereby contributing to the more fundamental understanding of capitalist market. In order to analyse the profitability of conditions of production, we avail ourselves of price equations, shown as simultaneous equations representing production of two kinds of commodities. One of the solutions can be regarded as formulated profitability in terms of the rate of profit. Our example shows that the superiority of a condition of production may depend on which price of production is taken as a standard for the evaluation on the profitability when there are two conditions of production in both industries. This indetermination overlooked by Marx and Uno could be another crucial source of irregularities of capitalist market.

Political economy - Technology - Uno School - Japanese Marxism - profit rate