Hi Steve, 1) My argument does not 'explain' SV from supply and demand. Though it does recognise the obvious fact that supply and demand *proximately* (not truly or ultimately) explain prices. We would have nothing to explain at all if there wasn't a 'law of one price'; if the same goods at the same place at the same time had completely different prices. S and D explain this law of one price; that's all. Marx is interested in explaining 'averages' prices, ie. the hidden regulative price that lies behind the fluctuations due to S and D. S and D certainly do not explain these! BUT obviously, any such explantion must be *compatible* with the obvious features of free exchange - S and D and the law of one price. My argument shows how *through* these 'surface' features the true underlying law expresses itself. This is the difference between 'proximate' and 'ultimate' explanation. The former is not really explanation at all. 2) What *does* explain SV then, on my account? Now, all commodities have use value and exchange value, so the key explanatory point does not rest upon this (though must be compatible with it). Rather, the key explanatory point is the distinction between machines and labour power. Machines have an already fixed contribution to production 'contained' in them prior to production. Thus in paying for the machine you are paying for the contribution. There are not two things paid for (the machine and its contribution) but one (the contribution of the machine). In contrast labour power has no fixed contribution 'contained' in it. It is both unlimited in what it can do and creative in that it can generate something which is new. All that is 'contained' in it is the prior process of reproduction of the labourer *in no way linked* with the future perfomance of labour. In the case of labour power, unlike that of machines, the capitalist pays for something that is entirely distinct from its contribution to production. There are two things, not one, so SV is possible without contradicting the law of one price. So the key is not an assumption but an ontological fact about machines and labour: Labour is universally and creatively transformative. Machines aren't. In the context of generalised commodity exchange this means that Labour is the only possible source of SV. That's the argument anyway. Many thanks, Andy
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