Golden Dysprosium
I went and compared it with Microsoft's financial reports.
Perhaps you can show us these financial reports?
Golden Dysprosium
And that's exactly where the problem begins: it's not "proof" that Marxism is
anything close to science, and the social sciences remain science wannabes.
I fail to see your logic here. You went and saw Microsoft's financial reports, and that proves all social science is pseudoscience.
In any case, I think we can begin elsewhere, say with Marx's labor theory of value.
It begins with Adam Smith who distinguished between two types of price: market and natural. The natural price, which all prices gravitate towards, whereas market prices are determined artificially by the seller. Smith noted the former is determined by the cost of production. David Ricardo refined this theory by showing that the cost of production is what determines prices, not supply and demand in the long term (Smith believed that supply and demand regulated natural prices). Further Ricardo showed that the cost of production, with respect to trade, is usually determined by two things: living labor (which is wages, etc.) and dead labor (the cost of wages that went into capital previous). Marx's contribution was to show how this labor is exploited by the capitalist who sells the commodity at its full value/natural price, but does not pay his workers the full value for their labor i.e. the capitalist will sell the commodity at full price, but will not pay his or her workers the full price of their contribution.
Hence Adam Smith and Ricardo proved the labor theory of value, and Marx proved how labor is exploited.
First with respect to supply and demand there are, what Adam Smith distinguished as "market prices" and "natural prices".
Quote:
[04] When the price of any commodity is neither more nor less than what is sufficient to pay the rent of the land, the wages of the labour, and the profits of the stock employed in raising, preparing, and bringing it to market, according to their natural rates, the commodity is then sold for what may be called its natural price.
[05] The commodity is then sold precisely for what it is worth, or for what it really costs the person who brings it to market; for though in common language what is called the prime cost of any commodity does not comprehend the profit of the person who is to sell it again, yet if he sell it at a price which does not allow him the ordinary rate of profit in his neighbourhood, he is evidently a loser by the trade; since by employing his stock in some other way he might have made that profit. His profit, besides, is his revenue, the proper fund of his subsistence. As, while he is preparing and bringing the goods to market, he advances to his workmen their wages, or their subsistence; so he advances to himself, in the same manner, his own subsistence, which is generally suitable to the profit which he may reasonably expect from the sale of his goods. Unless they yield him this profit, therefore, they do not repay him what they may very properly be said to have really cost him.
[06] Though the price, therefore, which leaves him this profit is not always the lowest at which a dealer may sometimes sell his goods, it is the lowest at which he is likely to sell them for any considerable time; at least where there is perfect liberty, or where he may change his trade as often as he pleases.
[07] The actual price at which any commodity is commonly sold is called its market price. It may either be above, or below, or exactly the same with its natural price.
And all prices generally gravitate towards natural prices:
Quote:
[15] The natural price, therefore, is, as it were, the central price, to which the prices of all commodities are continually gravitating. Different accidents may sometimes keep them suspended a good deal above it, and sometimes force them down even somewhat below it. But whatever may be the obstacles which hinder them from settling in this centre of repose and continuance, they are constantly tending towards it.
In other words,the market price is the price the commodity is sold at by means of supply and demand by itself, but the artificial price is the price of a commodity via factors like production, rent, wages, etc. In other words, as Smith notes, the natural price is the true price of commodities.
David Ricardo (arguably the most influential economist after Adam Smith) latter elaborated on this:
Quote:
It is the cost of production which must ultimately regulate the price of commodities, and not, as has been often said, the proportion between the supply and demand: the proportion between supply and demand may, indeed,for a time, affect the market value of a commodity, until it is supplied in greater or less abundance, according as the demand may have increased or diminished; but this effect will be only of temporary duration.
Diminish the cost of production of hats, and their price will ultimately fall to their new natural price, although the demand should be doubled, trebled, or quadrupled. Diminish the cost of subsistence of men, by diminishing the natural price of the food and clothing, by which life is sustained, and wages will ultimately fall, notwithstanding that the demand for labourers may very greatly increase.
The opinion that the price of commodities depends solely on the proportion of supply to demand, or demand to supply, has become almost an axiom in political economy, and has been the source of much error in that science. It is this opinion which has made Mr Buchanan maintain that wages are not influenced by a rise or fall in the price of provisions, but solely by the demand and supply of labour; and that a tax on the wages of labour would not raise wages, because it would not alter the proportion of the demand of labourers to the supply.
The demand for a commodity cannot be said to increase, if no additional quantity of it be purchased or consumed; and yet, under such circumstances, its money value may rise. Thus, if the value of money were to fall, the price of every commodity would rise, for each of the competitors would be willing to spend more money than before on its purchase; but though its price rose 10 or 20 per cent if no more were bought than before, it would not, I apprehend, be admissible to say, that the variation in the price of the commodity was caused by the increased demand for it. Its natural price, its money cost of production, would be really altered by the altered value of money; and without any increase of demand, the price of the commodity would be naturally adjusted to that new value.
'We have seen,' says M. Say, 'that the cost of production determines the lowest price to which things can fall: the price below which they cannot remain for any length of time, because production would then be either entirely stopped or diminished.' Vol. ii. p. 26
Marx latter develops this principle so as to explain the difference between use-value and exchange value, and the relationship this has to trade and currency.
For example let's examine a simple barter:
Quote:
5 beds = 1 house – (clinai pente anti oiciaς)
is not to be distinguished from
5 beds = so much money. – (clinai pente anti ... oson ai pente clinai)
Marx explains why this is so by simply expanding/evolving the system of barter/trade:
And expand this so we get:
Quote:
(20 yards of linen = 1 coat or = 10 lbs tea or = 40 lbs. coffee or
= 1 quarter corn or = 2 ounces gold or = ½ ton iron or = &c.)
So the first is a basic measurement- x = y. The latter expanded x = a, b, c, d, etc.
From this we can go to a general standard of trade:
Quote:
1 coat
10 lbs of tea
40 lbs of coffee
1 quarter of corn
2 ounces of gold
½ a ton of iron
x Commodity A, etc.
= 20 yards of linen
And from that to money:
Quote:
D. The Money-Form
20 yards of linen =
1 coat =
10 lbs of tea =
40 lbs of coffee =
1 quarter of corn =
2 ounces of gold =
½ a ton of iron =
x Commodity A =
= 2 ounces of gold
Marx's distinction is crucial here, because without realizing how the economy evolves, and how exchange is its own value based on labor, as opposed to utility, it is difficult to see why money indeed has any value at all.
