Supply and Demand in Marxism
Supply and Demand in Marxism
I don't see this often so how does Marxist materialism see supply and demand?
Mainstream (bourgeois) economics sees price of a commodity as the product of the intersection of its supply and demand and nothing else. There are certain problems with this theory. Mainly, it is tautological because it essentially says that the price of a commodity is what the consumer is willing to pay for it.
Marx posited that the exchange value of a commodity is determined by the sum of natural resources and the socially necessary labour that went into its production. The price that comes out of this is sort of a baseline price and fluctuations in supply and/or demand cause the price of the commodity to fluctuate around this baseline.
Changes in supply and demand explain why changes in prices happen (in a perfectly competitive market), not where those prices come from in the first place (see lemmygrabers comment). The issue in liberal economics is applying this model to things that have many more factors (labour, housing). For example saying that minimum wage distorts the market and causes unemployment:
Clearly policymakers are attempting to depoliticise a very political issue by appealing to economics as if it is a natural science. So as marxists we should be aware of how economics is used in class struggle to justify certain actions. The minimum wage thing was disproven quite some time ago now, but the issue still persists because the model is seen as some common sense.If I remember correctly, this supply-and-demand-curves-that-meet-at-equilibrium model of supply and demand isn't scientific because the curves are unobservable in practice.
essentially yes. you will can only observe the equilibrium price, and the curves are an abstraction of all the possible interactions of producers and consumers in a competitive market. there are ways of deducing these curves, but they are kinda tautological. also like, the curves were made curves only because it looked like newton's graphs, which makes them more scientific by association (pic from Doughnut Economics by Kate Raworth).
Das Kapital deals with this; it examines the why of supply and demand, but I have a hard time understanding the book, and am currently going through it (so I'm not done yet).