COVID-19 and basic facts of Marxist economics
By The stock market crashed in March but partly recovered
after the Federal Reserve Bank lowered the interest rate for borrowing. Then it
crashed again. Companies are going bankrupt. The price of oil has dropped to
its lowest level in decades.
when they’re forced to stay home in this pandemic. Much more importantly, it
means that far fewer workers are producing new value.
capitalist economy now. When workers aren’t working, no new value is being
created. The way the capitalist markets work, however, is that they anticipate
more and more growth as workers go to work every day and create new value while
being exploited by the bosses. When that’s not happening, there’s a big crisis.
behind the economic catastrophe accompanying the COVID-19 crisis. So here’s a
very brief summary of some of the basics of Marxism.
which we can’t just get for free, like plucking a dandelion, has to have two
kinds of value. One is use value. The other is exchange value.
valuable things we consume every day. Without it we would die. So the use value
of water is enormous.
exchange value. As vital as water is for life, it will never cost as much as
champagne, for example — which is nice, but we can survive without it!
other things we buy (called commodities) because little labor is involved in
making it available. That’s why it has a low exchange value.
first built, along with the aqueducts leading from them, quite a bit of labor
went into providing water. But now oceans of water are flowing to cities and
towns in many sections of the country with little human labor expended in the
process. So water, in most areas, is a minor expense.
specialty waters from Fiji or some other distant source that are sold in stores
all over. This water costs money, not because it might be better, but because
of the labor it takes to locate sources, transport the water, bottle and market
that have a high use value but a low exchange value. Flour, for example, the
main ingredient in bread–called the staff of life. Pencils. Writing paper.
binoculars you keep in your closet and barely use, but a much higher exchange
value. They’re very costly compared to water.
relation to other commodities. And that is the key to measuring it: The
exchange value of a commodity comes from how much human labor is incorporated
into it. Let’s say it again: It is human labor — workers working — that creates
all exchange value.
downplayed by most bourgeois economists.
exchange value it will have. Exchange value isn’t the only factor determining
price, of course. Prices can fluctuate according to supply and demand. But they
fluctuate around a basic ingredient: how much labor it took to produce the
commodity. No matter how much the market may be glutted with cars, for example,
even an old, battered car will never sell for the same price as a loaf of
crisis, Fortune magazine wrote on April 16: “Another 5.2 million Americans
filed initial unemployment claims in the week ending April 11. That brings the
total unemployment claims over the past four weeks to 22 million.”
or are housebound because of the virus — and therefore are not creating new
the economy — but not one you’re likely to read about in the newspapers or hear
about on radio and television. The corporate media will report on unemployment
as the result of the economic crisis, not the cause. But that is putting the cart
before the horse.
creator of all exchange value.
quarantined or staying home under shelter-in-place orders. They are “essential
workers” needed for the creation of new values, but are unable to do their