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?
Selling below value
Carson Brooks
Jace Robinson
Sure. Remember that value only determines equilibrium price.
Michael Jenkins
Value would be 110 in this case.
William Russell
Yeah, I don't get it either. Why not call C+V, the cost of production, the value?
Hudson Campbell
because the actual value includes surplus value.
Christopher Roberts
Or is C+V the price of production.
Dominic Hernandez
No its not. Vlaue is C+V+S you would be selling below value.
Carson Myers
not if they fix prices with the competition, which is easier to do overall
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
In competition though they would be driven to sell below value though. Does Marx adress this?
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
Lucas Campbell
A fall in the rate of profit would not necessarily mean an immediate fall in actual profit.
Easton Ortiz
Where in the book does he talk about this? because he doesn't talk about it in capital volume 1,
John Scott
want to see something terrible? youtube.com
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
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
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
meant for
Nathaniel Mitchell
That's not Capital, it's a smaller 30 page pamphlet where he discusses this issues throughout
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
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.
Well then why don't you cite cockshott?
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.
dcs.gla.ac.uk
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.
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
never mind I just realized their source is using a sraffian interpretation of marx not a temporal one
William Murphy
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
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.