For us value is created only as a result of human labour. Price is a different thing which by and large fluctuates around value. The fruit of financial magic is money. It is something that has price but no value. Commodities (shares, bonds, prepackaged debt, etc.) are being bought and sold. The money is disconnected from labour. How do we account for this? (In terms of labour theory of value)

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There is a long tradition of Marxian analysis of values, prices and the larger capitalist economy. It can and does treat products of labor that have no value or price; that have price but no value; and so on. Marx himself- as well as his followers - attended to the matter of paper money (rather than gold money which can be treated as a produced commodity with value [as Marx does in Capital, vol 1] through concepts like "fictitious capital" and so on. Perhaps the best way to think about this is to see that the world of labor, commodities, and values can spawn a set of derivatives - symbols that stand in for a particular relation to commodities, labor and values - that can exchange in markets at prices, etc. The question then becomes how such exchanges and their prices relate to values. This is analogous to the overblown debates over how Marx related the prices of commodities produce in capitalisj to their values. On that you might take a look at S. Resnick and R. Wolff, New Departures in Marxian Theory, New York: Rooutledge, 2006.

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  • Robert Mitchell
    commented 2017-07-30 17:41:49 -0400
    Professor Wolff said: “The question then becomes how such exchanges and their prices relate to values.” Arbitrarily. Prices are set arbitrarily by traders, often colluding with each other. The prices in exchanges are easily converted to money whenever investors require, and they also serve a social purpose, because the money prices of derivatives count as points in the Neoliberal profit-maximization game. Money is arbitrarily connected to value. The rules are set and changed at will by private sector money managers.
  • Robert Mitchell
    tagged this with Important 2017-07-30 17:41:46 -0400
  • Richard Wolff
    responded with submitted 2017-07-23 17:09:21 -0400
  • Janos Horanszky
    published this page in Ask Prof. Wolff 2017-07-23 15:23:48 -0400