Market Value and Market Price

Abstract

Marx defines the labour value of a commodity as the total (direct and indirect) abstract labour time required for its production. It is his contention that under capitalism the movements of commodity prices are dominated by changes in labour value magnitudes. This thesis, which he calls the law of value, requires him to connect labour values to the different regulating prices which act as centres of gravity of market prices under various assumed conditions of production and sale. He therefore undertakes to systematically develop the category of regulating price by introducing successively more complex factors into the analysis, linking it at each step to its foundation in labour value. It is only near the end of this developmental chain, when he begins to analyse the manner in which differences among conditions of production within an industry influence the process of regulating market prices, that we encounter the concept of market value (Marx 1894, ch. X). To grasp its significance, we must first consider the steps which precede it.