How does the labor theory of value sort out issues of oligopoly pricing power? Jerry wrote: > Suppose that an oligopoly, as a result of advertising and marketing, is able to charge working-class consumers a market price three times greater than the value of those commodities. < Yes, this can happen, and there should be no controversy about recognizing that it happens. Jerry then asks: < ...who pays the higher prices? It is, in this instance, working- class consumers, of course. > Yes. Price, however, is exchange value, not value. The working- class consumers have no more value (received as money wages) to give back to the capitalist class than they did prior to the success of the marketing campaign. Has the exchange value of money changed? Has the money wage changed? Have the hours of labor performed by the working class changed? If not, then the rate of exploitation and the mass of surplus value have not changed. Jerry goes on to speak of: > ...redistribution of ... wealth from the working-class to one segment of the capitalist class through exchange. < This is true, taking wealth to be use values, not value. In the first instance, the result of the successful marketing campaign is that the use values obtained by the working class shrink, in this sense: they buy as much of the now triple-priced commodity as before and buy fewer of some other commodities (from other capitalists). Roughly speaking, this result is the obverse of the fact that surplus value has been redistributed within the capitalist class. There is a class asymmetry here. On the capitalist side, capital is value that expands, surplus value is a matter of value, and "exploitation is the difference between the total value created by abstract labor and the value laid out as variable capital. ... On their side, the workers are well aware of how much stuff they create, how much effort it takes them to do it, and how much they consume. These facts hold regardless of whether the prices of commodities are equal to their value..." (From Capitalism to Equality, p. 101-2, Web URL below.) This is only the first instance. Moving from the first instance to a final result proceeds through workers' consciousness and class struggle. Many similar phenomena of price -- the tripled price of the oligopoly commodity at issue here, general inflation, and the current price gouging for electricity and natural gas in California -- affect the standard of living. Workers know whether their wages have held up or not. As individuals they may try to find a second job, or as a family the spouse may re-enter the labor force, or sections of the working class may put more energy into the class struggle. There is no formula by which to calculate what happens in going from the first instance to the final result. Charles Andrews Web site for my book is at http://www.LaborRepublic.org
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