Selling below value.

Carson Brooks
Carson Brooks

Wouldn't capitalists be driven to sell below value by competition? If I make a commodity worth 150 dollars 50 being C 60 being V and 40 being S I could sell it at 120 dollars and still make a 10 dollars of profit while outselling my competition right?

All urls found in this thread:
https://www.marxists.org/archive/marx/works/1865/value-price-profit/
https://www.youtube.com/watch?v=yWmhPR60ftQ
https://www.youtube.com/watch?v=sIlNIVXpIns
http://www.dcs.gla.ac.uk/~wpc/reports/merged.htm
Jace Robinson
Jace Robinson

Sure. Remember that value only determines equilibrium price.

Michael Jenkins
Michael Jenkins

Value would be 110 in this case.

William Russell
William Russell

Yeah, I don't get it either. Why not call C+V, the cost of production, the value?

Hudson Campbell
Hudson Campbell

because the actual value includes surplus value.

Christopher Roberts
Christopher Roberts

Or is C+V the price of production.

Dominic Hernandez
Dominic Hernandez

No its not. Vlaue is C+V+S you would be selling below value.

Carson Myers
Carson Myers

Wouldn't capitalists be driven to sell below value by competition?
not if they fix prices with the competition, which is easier to do overall

Alexander Sanchez
Alexander Sanchez

…And why does it do that?

The way I see it is the "objectivity" of value stems from the fact that if the producer sells below the cost of production in the long run they will cease to exist, so why is the supposed objective value is actually above the cost of production?

James Moore
James Moore

In competition though they would be driven to sell below value though. Does Marx adress this?

Jackson Peterson
Jackson Peterson

You forget that profit isn't the only thing surplus value is used for, it's also used to pay rent, interest, ect. In regards to profit itself, yes, this is exactly why we see a tendency for the rate of profit to fall, however we should also remembered this is tempered by capitalists wanting to maximize profit. A capitalist isn't going to accept a lower profit unless he is forced to by competition, which means that profit negatively correlates with productivity and capital concentration as it's this act of reinvestment in production that forces the price and thus the profit to go down.

Jordan Gray
Jordan Gray

Yes, https://www.marxists.org/archive/marx/works/1865/value-price-profit/

Lucas Campbell
Lucas Campbell

A fall in the rate of profit would not necessarily mean an immediate fall in actual profit.

Easton Ortiz
Easton Ortiz

Where in the book does he talk about this? because he doesn't talk about it in capital volume 1,

John Scott
John Scott

want to see something terrible? https://www.youtube.com/watch?v=yWmhPR60ftQ

John Brooks
John Brooks

well they would have to compensate by increasing exploitation, but generally a lower rate of profit means lower profits than previously.

Lincoln Barnes
Lincoln Barnes

Isn't there a tendency though to lower prices constantly closer to cost-price and lower cost price? Does Marx talk about this specifically?

Hudson Bennett
Hudson Bennett

collab with esoteric entity
lmao. https://www.youtube.com/watch?v=sIlNIVXpIns

Chase Powell
Chase Powell

Yes, that's exactly what the tendency for the rate of profit to fall is, this is one of the principle predictions of marxian economics.

Benjamin Morgan
Benjamin Morgan

meant for

Nathaniel Mitchell
Nathaniel Mitchell

That's not Capital, it's a smaller 30 page pamphlet where he discusses this issues throughout

Anthony Peterson
Anthony Peterson

No its not. Just lowering prices isn't the falling rate of profit the falling rate of profit occurs when an investment consists of a greater amount of constant capital over workers.
he also sites cockshott.

Andrew Moore
Andrew Moore

Just lowering prices isn't the falling rate of profit the falling rate of profit occurs when an investment consists of a greater amount of constant capital over workers.
Ceteris Parabus a lower price will mean a lower profit. On the micro scale, this is exactly what causes the tendency for the rate of profit to fall. Why the hell do you think capitalists will invest in more productive tools, so that they can lower the price to undercut competitors. But guess what, eventually that forces everyone to make the same investment and suddenly the extra profits are gone.

he also sites cockshott.
Well then why don't you cite cockshott?

Tyler Roberts
Tyler Roberts

The reason why profits start to decline is because machines don't create value but capitalists can't see this due to the average rate of profit.
http://www.dcs.gla.ac.uk/~wpc/reports/merged.htm

Josiah King
Josiah King

The aim isn't to outsell the competition (usually) though, it's just to turn a profit.
Lots of companies set prices arbitrarily. Decide a profit margin over cost, slap it on the market. If it doesn't sell because the demand is met elsewhere for a lower price, cut your margin.

Also note that companies will sell for an outright loss simply to take over the market and drive out competitors.

On a very micro level it's quite funny when this blows up in their faces.
Mr. Crandall [CEO, American Airlines]: I think it's dumb as hell for Christ's sake, all right, to sit here and pound the (expletive) out of each other and neither one of us making a (expletive) dime.
Mr. Putnam [CEO, Braniff Airlines]: Well . . .
Mr. Crandall: I mean, you know, goddamn, what the (expletive) is the point of it?
Mr. Putnam: Nobody asked American to serve Harlingen, nobody asked American to serve Kansas City, and there were low fares in there, you know, before. So. . .
Mr. Crandall: You better believe it, Howard. But, you . . . you . . . you know, the complex is here -ain't gonna change a goddamn thing, all right. We can . . . we can both live here and there ain't no room for Delta. But there's, ah, no reason that I can see, all right, to put both companies out of business.
Mr. Putnam: But if you're going to overlay every route of American's on top of, over, on top of every route that Braniff has - I can't just sit here and allow you to bury us without giving our best effort.
Mr. Crandall: Oh sure, but Eastern and Delta do the same thing in Atlanta and have for years.
Mr. Putnam: Do you have a suggestion for me?
Mr. Crandall: Yes, I have a suggestion for you. Raise your goddamn fares 20 percent. I'll raise mine the next morning.
Mr. Putnam: Robert, we . . .
Mr. Crandall: You'll make more money and I will, too.
Mr. Putnam: We can't talk about pricing.
Mr. Crandall: Oh (expletive), Howard. We can talk about any goddamn thing we want to talk about.
Despite Putnam's airline being in the midst of dying (iirc it died the same year), he didn't raise fares 20%. He took a tape recording of the conversation to antitrust regulators.

Justin Ross
Justin Ross

never mind I just realized their source is using a sraffian interpretation of marx not a temporal one

William Murphy
William Murphy

I could sell it at 120 dollars and still make a 10 dollars of profit while outselling my competition right?
Yes if you sell at volume you can keep prices low. A wholesaler will give you a discount if material suppliers got into a bidding war (because of imitators) and/or you're able to guarantee a large volume of sales.

This is basically proof that equilibrium value never becomes price.

Angel Brown
Angel Brown

I could sell it at 120 dollars and still make a 10 dollars of profit while outselling my competition right?
Yes if you sell at volume you can keep prices low. A wholesaler will give you a discount if material suppliers got into a bidding war (because of imitators) and/or you're able to guarantee a large volume of sales.

This is basically proof that equilibrium value never becomes price.

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