I recently read through Value, Price and Profit by Marx.

Marx starts off the pamphlet with a question of the impact of a rise in wages on the material conditions of wage workers, all else being equal. This question was motivated by Marx's contemporary Weston, who falsely asserted that a rise in wages would harm the working class. Such a question is still relevant today, given the absurdity of so-called "wage-price spirals" on the costs of commodities.

Later on in the pamphlet, Marx dispenses with a few false notions around the source for the prices/values of commodities. Namely, the notion that such prices/values are determined by supply and demand, and the notion that such prices/values are determined by wages.

Chapter six is the turning point of Value, Price and Profit. It is where the foundations of Marxist political economy are laid, albeit in compressed form, by first investigating the true nature of value.

"A commodity has *a value*, because it is a *crystallisation of social labour*.... The *relative values of commodities* are, therefore, determined by the *respective quantities or amounts of labour, worked up, realised, fixed in them*."

After having established the nature of value, Marx addresses some common misconceptions that can flow from this definition.

1) Equivocating "wages" with "the value of quantities of social labour" (wages are an indeterminate subset of such values)

2) Assuming the lazier a worker, the more he is worth (ignoring Marx's qualifications of "social" labour)

3) Assuming efficiency is ignored (in fact, Marx highlights that value is inversely related to productive power)

Marx finally concludes chapter six of Value, Price and Profit with an investigation into market and natural prices of commodities, and establishes that, on average, as the stochastic processes of supply and demand oscillate, commodities are sold *at their values*. From this it follows that capitalist *profits* absolutely *cannot derive* from a *surcharging* of a commodity's value, but instead derive from the commodity's value *itself*.

Having established the nature of value of commodities in chapter six, Marx turns, in chapter seven (titled "Labouring-Power"), to analyzing a specific commodity: that of labour-power. In particular, he notes the peculiar context in which labour-power exists. Namely, that it is a product of "Original Expropriation" that leaves capitalists with the means of production, and workers with nothing but their labour power.

At the conclusion of chapter seven, Marx derives the Value of Labouring Power:

The value of labour-power, like all commodities, is determined by the quantity of labour necessary to (re)produce it. And that quantity is determined by the value of the necessaries required to "produce, develop, maintain, and perpetuate [it]." It is important to note that this value is *not* a function of "what you bring to the table," but a question of the cost to *replace* you.

From this understanding, that the value of labouring power derives from the quantity of labour necessary to maintain or reproduce it (and nothing more), comes the understanding of *surplus value*:

"The quantity of labour by which the *value* of the workman's labouring-power is limited forms by no means a limit to the quantity of labour which his labouring power is apt to perform."

The worker may reproduce his labouring power in 4 hours, but he must keep working.

Given this understanding of surplus value, Marx makes a short aside in chapter nine, "Value of Labour", and highlights a political feature of capitalism that distinguishes it from previous modes of production. Namely, that the "intervention of a contract" and a paycheck *masks* the nature of this abusive relationship. It makes this relationship *appear* "voluntarily given," rather than compulsory, as under slavery or feudalism.

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In chapter eleven ("The different parts into which surplus value is decomposed"), Marx investigates how surplus value, which he labels "profit," may be split between capitalist, banker, and landlord, taking care to note that these three parties are *not* adding value themselves, but taking pieces of value created by labour. He also introduces his concept of "rate of profit," as a ratio between the surplus/profit created, divided by the initial wages advanced.

In chapter twelve, "General Relation of Profits, Wages and Prices," Marx makes three important points:

1) Wages and Profits are inversely related. The boss's gain is the workers' loss and vice versa.

2) The average price of a commodity is *not* impacted by this inverse relation; the price is determined by the social labour fixed in it.

3) The average price *is* impacted by the *productive power* employed. More productive means will impart *less social labor*.

In chapter thirteen, "main cases of attempts at raising wages or resisting their fall," Marx elaborates on the impacts of an increased productive power of labour, with particular emphasis on *relative wages* and *relative social position*. Several scenarios may occur where nominal wages rise, yet the standard of living has deteriorated.

He also addresses inflation's impact on wages and how capitalists seize upon it to defraud the working class.

In the final chapter 14, "the struggle between capital and labour and its results," Marx notes that labouring power's value is determined both by a physical limit, and a social limit, and that *struggle* informs this social limit.

Finally, Marx concludes that struggles around wages are fundamentally inadequate and reformist, "applying palliatives, not curing the malady," and that the full struggle should be the *revolutionary* one: abolition of the wages system.

@aspensmonster Thanks for this comprehensive summary. This text is one of my favourites, because it explains the key arguments so well

@sankeiy I'm almost done with the summary (still gotta upload chapters 13/14). And I agree. Of all the theory I've read so far, "Value, Price and Profit" is by far the most concise and lucid, with a very logical flow from first principles, to arguments, to conclusions. I can see why they call it a precursor and guide to Capital.

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