DYFI CUC organised a few study circles in this interim, but we unfortunately do not have updates – hence we are counting today’s study circle as the fourteenth of this year. After having completed Wage Labour and Capital, today we read the first six chapters of Value, Price and Profit.

The book consists of speeches delivered by Marx at the First International, in response to John Weston’s arguments against a general increase in wages. Weston posited that if workers fought for a general increase in wages, the increase would simply be transferred by the capitalist to commodity prices. An increase in commodity prices would mean that the real wages of the workers would remain the same, given that their purchasing power would decrease.

Marx shows that this reasoning is based on several flawed assumptions. That wages determine prices is not a given, and that a certain general level of profit is required for production to continue is also not. Weston is unclear about whether there is a universal economic law about the level at which general wages should remain, or whether this depends on the will of the capitalist – if the former, the law is not presented and defended; if the latter, wages can be made to change against the will of the capitalist as well. In any event, there is a constant downward pressure on wages, that does not affect commodity prices in the opposite direction – meaning that the rates of profit and rent change, are not cosmically determined. Marx shows that, in fact, a general increase in wages would mean that either that commodity prices remain unchanged as the rate of profit declines, or that an increased demand for necessities and decreased demand for luxuries causes a temporary rise in the prices of necessities, which is fixed as capital moves to increase the supply of necessities to match demand. Marx uses historical examples to validate this.

At the heart of Weston’s argument is an erroneous theory of value, and the idea that profit arises at the point of exchange. Marx shows how this is impossible, and develops the labour theory of value. 

Next week we will continue reading the remaining chapters. 

Revolutionary Greetings,

Central Unit Committee,

Democratic Youth Federation of India – Delhi