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Why do economic systems produce crises?

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Economic science is surrounded by neo-classical theory. It is clear that neoclassical understanding is the biggest cause of the modern world economy and the recent crisis that has been going on since 2008.  Naturally, criticizing today's economic understanding is also criticizing neo-classics. This old thought that fills its time does not contain the slightest side worth criticizing and is responsible for our current situation but still, through the criticism of neoclassical economics, putting forward the theory of Labor-value will prevent us from making it a correct science. Because neo-classical understanding has turned the science of economics into mathematical tricks and emptied its content.

The fact that we are still chasing supply and demand when we have a treasure like labor-Value Theory will be a lesson that will be taught throughout human history Labor value theory offers us a complete equation that puts economics on the most accurate plane. Despite this, the importance of Labor value theory is still not understood. The counter-thesis presents a fundamental point of contention; why do price and value differ? To say that what determines the value of a good is the amount of labor in it, to say that the basic element of value is labor; it also requires the ability to explain why the price of the goods and the amount of labor it contains are different by taking Labor into the center. Ricardo's and Marx ' contributions on this issue are enormous. Marx made such a deep look that he first saw the essence, and then examined the reasons for this essence. But he still couldn't explain why the price differed from the value. Even if Sraffa created a difficult ground on this issue with the thesis of “fixed goods”, he was not able to make a full explanation. Although Labor Value Theory has a much stronger tradition than other economic theories, its value is not fully understood even by schools that claim to be the successor to this tradition. It is impossible to understand the labor-value theory without understanding what development is, so we need to go to the source of the work. What makes a commodity value is the amount of labor it contains. labor theory is one of the topics that Adam Smith and David Ricardo agree on.  

The real price of everything, what everything really costs to the man who wants to acquire it, is the toil and trouble of acquiring it. What everything is really worth to the man who has acquired it, and who wants to dispose of it or exchange it for something else, is the toil and trouble which it can save to himself, and which it can impose upon other people. What is bought with money or with goods is purchased by labour as much as what we acquire by the toil of our own body. That money or those goods indeed save us this toil. They contain the value of a certain quantity of labour which we exchange for what is supposed at the time to contain the value of an equal quantity. Labour was the first price, the original purchase-money that was paid for all things. It was not by gold or by silver, but by labour, that all the wealth of the world was originally purchased; and its value, to those who possess it, and who want to exchange it for some new productions, is precisely equal to the quantity of labour which it can enable them to purchase or command. (Smith, 2010: 32).

 

As Smith said, the only element that makes something valuable is labor. What we buy and sell is transformed labor. But Smith can't quite grasp what measure labor is. Ricardo understands what Smith can't understand, and takes it one step further, saying that goods are exchanged with goods, and price fluctuations are also related to the yield of Labor;

If a piece of cloth be now of the value of two pieces of linen, and if, in ten years hence, the ordinary value of a piece of cloth should be four pieces of linen, we may safely conclude, that either more labour is required to make the cloth, or less to make the linen, or that both causes have oprated. (Ricardo, 2007: 35).

The value of a good, regardless of price, determines only and only the amount of labor in it. Of course, this Labor is not ordinary. This means Labor with average productivity. Ricardo's attempt to explain price fluctuations with the efficiency of Labor opens up a fairly useful way for Marx.

The value of a commodity would therefore remain constant, if the labour time required for its production also remained constant. But the latter changes with every variation in the productiveness of labour. This productiveness is determined by various circumstances, amongst others, by the average amount of skill of the workmen, the state of science, and the degree of its practical application, the social organisation of production, the extent and capabilities of the means of production, and by physical conditions.  (Marx, 1986: 52).

The thesis that Labor is the only measure of value is the thesis that comes closest to explaining every rule of Economics. An item is valuable because it is a product that occurs only and only as a result of Labor. So labor turns something into a market-ready object.

The more difficult the labor process the items have, the more valuable they become. Labor-value theory looks exactly where it needs to be looked at, Labor, which is the only fact of economic life. We can't trade anything but the products that labor produces. Because everything that is traded is the product of labor, it has value. Naturally, what is taken is labor in what is given. But the price can often equate to a much higher value, regardless of this labor process. Here is the only point where the theory of Labor value is difficult to explain; why does the price differ from the value of Labor? In this regard, those who think that Labor is the only measure of value have created quite productive discussions. They are aware that sending supply and demand is unrealistic, but they have avoided literally stating that multiplicity or scarcity cannot affect the price. Even Marx got his share of that look.

Classical political economy borrowed from every-day life the category "price of labour" without further criticism, and then simply asked the question, how is this price determined? It soon recognized that the change in the relations of demand and supply explained in regard to the price of labour, as of all other commodities. nothing except its changes, i.e., the oscillations of the market price above or below a certain mean. If demand and supply balance, the oscillation of prices ceases, all other conditions remaining the same. But then demand and supply also cease to explain anything. The price of labour, at the moment when demand and supply are in equilibrium, is its natural price, determined independently of the relation of demand and supply. And how this price is determined, is just the question. Or a larger period of oscillations in the market-price is taken, e.g., a year, and they are found to cancel one the other, leaving a mean average quantity,relatively constant magnitude. This had naturally to be determined otherwise than by its own compensating variations. (Marx,1986, s. 515-516). 

The law of supply and demand is very valuable in terms of showing how far science is at the beginning of the road, while it does not work more than any law of Biology in explaining how price is formed.

Labor-value theory requires a holistic understanding. Supply and demand theory should go out of the equation since the fact that a good is more or less cannot affect the amount of Labor contained in that good. An economic scientist accustomed to thinking with supply and demand cannot easily abandon this approach.

Suppose then, that by some inexplicable privilege, the seller is enabled to sell his commodities above their value, what is worth 100 for 110, in which case the price is nominally raised 10%. The seller therefore pockets a surplus-value of 10. But after he has sold he becomes a buyer. A third owner of commodities comes to him now as seller, who in this capacity also enjoys the privilege of selling his commodities 10% too dear. Our friend gained 10 as a seller only to lose it again as a buyer.  The net result is, that all owners of commodities sell their goods to one another at 10% above their value, which comes precisely to the same as if they sold them at their true value. Such a general and nominal rise of prices has the same effect as if the values had been expressed in weight of silver instead of in weight of gold. The nominal prices of commodities would rise, but the real relation between their values would remain unchanged.

Let us make the opposite assumption, that the buyer has the privilege of purchasing commodities under their value. In this case it is no longer necessary to bear in mind that he in his turn will become a seller. He was so before he became buyer; he had already lost 10% in selling before he gained 10% as buyer. Everything is just as it was. (Marx 1986: 164)

But, as Marx is sure, if goods are exchanged only among themselves when two goods that are the product of various labor are exchanged with each other, profit is impossible to form. As soon as we accept that Labor is the only unit of measure, we must see that the whole science of economics is invalid.

If the amount of Labor contained in a good determines the value of that good, and the value of Labor is also determined by the social average yield, that is, if there is a race between Labor, we do not need another variable. Only with these two principles can we explain how price is formed and why economic systems produce crises.

 Labor has a social average. In other words, each business unit must produce a specific product over time. The types of labor that remain below this average efficiency are either withdrawn from the production life over time and replaced by machines or completely lost. Of course,” profitability " is more obvious in the branches of production, which are above the average labor yield, but recently entrepreneurs are occupying these areas, and profitability is also retreating towards the social average in these areas. Ricardo concluded this in his review. In other words, the social average of capital gains in integrated markets is also a matter (Ricardo: 99).

It is assumed that the production process of what is obtained from nature to be converted into a commodity in some form completes the cycle by selling the commodity. The capitalists involved in this cycle are rewarded with profits, while the laborer is rewarded with wages. Owners of manufacturing sites who lend a portion of their wealth to the capitalist also receive annuities. Naturally, income is divided into three: wages, profits, and annuities. These three do not have the slightest effect on the number of goods, no matter how high or low the monetary volume is. Wages are in a different position than profits and annuities since they occur before the sale of goods. Profit and annuity occur after the sale of the goods, while wages appear in the production process of the goods. Production, that is, the process of organized labor, is the process of creating wealth. This fortune consists of goods, it is material, but its biggest feature is that it was formed as a result of a labor process. Naturally, each exchange actually consists of the exchange of equal masses of labor with each other. In other words, even in exchange, it is still nothing more than Labor that has been changed. It is not possible to add any excess on Labor.

When we see everything, that is, every saleable object or service, as the transformed States of Labor, we reduce all entries to a single item, labor. This includes silver, gold, money, or other assets, as Smith calls them. Everything is a transfiguration of Labor. In this aspect, Labor has a social aspect; every consumer who obtained the product of this Labor left the product of his labor on another production machine in return. In exchange for its production in one line of business, it receives products produced in other lines of business. Each unit of labor input blocks the output of labor elsewhere. We spend all our income buying the products of other people's labor. Just as we can do this for household consumption, it does not change the situation if we spend it as gold, money, securities such as stocks or real estate, transferring it to production in the form of capital or as a means of an annuity. But things are the subject of sharing. Naturally, every person who will participate in the exchange will receive a share of these items. No matter how much we raise fees, the number of goods that income will receive will not change as long as the goods remain constant. Moreover, if the social average of Labor is concerned, there can be no income other than wages. Because the price in the market of what is the product of a unit of average labor is determined by other things that are the product of a unit of average labor.

The idea that saving is a consumption arises from the idea that the cycle is complete with the sale of a good. As soon as a product finds a buyer in the market, the cycle is not complete. Because goods only become part of wealth as soon as they are consumed. It is included in the wealth as much as the part it is consumed, it is not included in the wealth unless it is consumed.

 A commodity is an object outside of us that does not form an emotional bond with the producer in this aspect. But for its consumer, the commodity is not an object other than it. For its consumer, a commodity is something that increases or reduces the efficiency of its labor. Just as it refers to some labor time for the commodity producer, it also refers to another mass of Labor time for its consumer. Exactly as Smith said, “trade is the exchange of one Labor and another Labor.” For the producer, commodities are as valuable as the Labor time spent in their production. The effort of obtaining it from nature in its lean form and turning it into a social benefit determines the value of the commodity. This is the production value of the commodity. In this aspect, commodities have metamorphosed the States of Labor.

What makes a commodity valuable or drives the productive forces to organize a labor process for that commodity is what the commodity brings to its consumer. The consumer reveals free time by getting rid of the trouble he has to endure thanks to this commodity, or by gaining vital time. On the one hand, it steals time from the commodity producer, and on the other hand, it saves time to the commodity consumer. A commodity that coincides with Labor-time when it is produced on one side prevents Labor time when it is consumed on the other side, that is, negative labor causes time.

Let's think of a can of canning, the productive forces to produce the commodity as canning make an organization and start a labor process for canning. They organize a social benefit using a certain mass of Labor time. In other words, Canning is revealed as a result of a labor process. Mowing the field, planting the crop, caring, collecting, processing, putting it in boxes, and coming to market refers to a production process. Each step coincides with a labor process. By finding a buyer in the market, the process is completed for the productive forces that produce the commodity. But the consumer wastes the time that he has to endure to eat the product in this can and must take actions such as plowing the field, sowing the crop, growing, collecting, and canning. Here, instead of canned food, he buys this product from the market for a certain price. This product is an image of subjective need. What is offered for consumption inside the Can is the subject of culture, but it leans on the need for nutrition as an image.

Satisfying its needs with Canning is labor that the consumer has to endure. As soon as Canning is consumed, it meets the nutritional needs of the subject and gives the Consumer both biological time and labor time. This is the value of using goods when the consumer wins. At one end, the value of use refers to the content of the good, its social utility, and at the other end, the time of labor in which the good saves its consumer. In all its forms, the common denominator is time.

In this aspect, every consumer creates a “negative labor time process” thanks to the product they consume. Negative labor-time is the time of recorded labor. Naturally, negative Labor sits on a value in terms of one's income, which saves time. Just as the Labor period of a good finds its value with the income of the person who produces that good, the negative Labor period of a good finds its value with the income of the consumer who consumes that good. Naturally, the labor process prevents another labor process that needs to be maintained elsewhere, creating a negative Labor period. Negative labor time is the time of saved labor that corresponds to a unit of used labor, in this aspect it is the wealth itself. Wealth is a measure of how much labor-saving fortune is created.

In this aspect, commodities cause a negative labor time under any circumstances. A single commodity can create time as the subject of two separate things. By freeing us from a labor process in a direct sense, on the one hand, action quite clearly provides social time by saving time, on the other hand, it provides us with individual time by helping us get the object of our needs. But every commodity creates a “negative labor time” at the moment when it is consumed by the consumer without exception. Let's explain this with a very familiar example, Ricardo's “theory of comparative advantages”. Ricardo's theory of comparative advantages ((Ricardo, 2007: 115-132) tells us how the change of labor, that is, the division of work in one place, creates a surplus. Although Ricardo used it for international trade, it was later revealed that the nature of domestic trade was not very different from this. Let's assume that the UK and Portugal are two productive and consumer elements and only have a two-product consumption agenda

 

Country

product 1

product 2

Necessary labor.

England

90 L.wine

60 roll of fabric.

90+90 daily labor

Portugal

120 L.wine

30 roll of fabric

90+90 daily labor

Total

210 L.wine

90 roll of fabric

360 daily labor

TABLE1

England

120 roll of fabric.

180 daily labor

Portugal

240 L.wine

180 daily labor

According to Table 1,  1.5 liters of wine in the UK has the same value as 1 roll of fabric. In Portugal, 1 roll of fabric is equivalent to 4 liters of wine. In England, one unit of labor produces ½ liter of wine and 1/3 roll of fabric, while in Portugal, the same unit of labor produces 2/3 liter of wine and 1/6 roll of fabric. As soon as a Sunday is established between these two structures over the products they excel in, the productivity of Labor will change. Everything that is the product of 90 days of Labor is the same thing as Ricardo, Smith, and Marx said. So labor value theorists say that 2 liters of wine will be 1 ball of fabric because this duo contains an equal amount of Labor.

 TABLE2

 

According to Ricardo, Britain and Portugal will produce 210 liters of wine and 90 balls of fabric if they continue the same production habits. But instead, they trade with each other and only produce 240 liters of wine and 120 balls of fabric if they produce products they are superior to. Other options will be unlikely, as there will be no such situation as them choosing to produce products that they are not superior to. Since Labor is the only measure of value, the efficiency of Labor is equalized in this single market, and since 1 ball of fabric contains as much labor time as 2 liters of wine, its prices should also be at this rate. Income and expenses meet each other only under this condition. But in this case, the consumer should know the cost of production for the manufacturer of 1 ball of fabric and 1 liter of wine. The consumer only knows how much labor is produced by their production habits. This, in turn, is due to the mass of Labor time that consumer saves.

But British intelligence is aware that a ball of fabric should make more wine!

If we assume that the old product provides a sufficient yield for livelihood and decide that there is no need for more production, that is, if we do not turn to full employment, unlike Marshall, we will find out how much labor and time we save as a result of this trade. The Labor time when 30 roll of fabric will save the Portuguese is 90 days of negative labor, while the Labor time when the British will save 90 liters of wine is 90 days of negative labor. In fact, the exchange between two equal labour again, but the British demand in English and Portuguese from Portugal wine from fabric of a negative labor labor time like to request, because otherwise the situation on the weak side frees the audience will be a situation to the detriment of both parties. That is why Labor is powerless and negative Labor takes place in areas where time is born. Negative labor time becomes visible at this point, and 30 roll of fabric, the product of 90 days of Labor time, are replaced by 90 liters of wine, the product of 90 days of Labor time. In other words, only the products of labor that are subject to exchange are equated with each other. It's not the product he sells, it's how much labor he spends on the product he buys. It is clear that the Portuguese will be as happy with this situation as the British. When exchange is in this form, the yield of labor increases. Even in the same “supply and demand” situation, the price changes without any change in the quantity of goods. In the past, the British can buy 1.5 liters of wine with 1 ball of fabric, and the Portuguese can buy 1 ball of fabric with 4 liters of wine, in the new plane, the Portuguese can buy 1 ball of fabric with 3 liters of wine, and the British can buy 3 liters of wine with 1 ball of fabric. But 1 roll of fabric will not be equal to 2 liters of wine. So far, labor value theorists have thought that Labor will be equalized in this way, but there is only an equalization between the purchased parts of Labor. Therefore, the price is shaped according to the consumption value, not the production value of Labor. There is a profitable situation within both sides of the trade. But profitability here is an abundance thanks to the increase in the yield of Labor. Otherwise, capital profit is still not clearly visible.

Marx says that Labor is exploited by the bourgeoisie on the counter of production, and that the worker has a shift that he produces within the bourgeoisie after he produces for his own livelihood . In fact, he says,” by multiplying the amount of input in unit time, the bourgeoisie exploits " (Marx 1986; 303). Plus value occurs under these conditions, according to Marx.

According to the labor Value Theory, Marx knows that every price placed on the product produced by the worker will inevitably raise the price of everything, so exploitation must be Mal'en, and therefore he points to the production machine as the only source of exploitation. According to Marx, surplus value is unpaid production. But if the surplus value is just a form of exploitation provided on the production counter, we are faced with a strange situation, such as the opposite of exploitation on the plane where production is damaged. The production machine is a place where open exploitation still continues, but exploitation occurs to compete with other manufacturers, so it does not occur in production areas.

When we take labor as one yardstick, we say that the only input is labor. It is impossible for us to increase the yield of labor or to achieve an improvement in revenue unless we multiply what is naturally the product of Labor. If everything is a product of Labor, and every product spent a unit of Labor time is of the same value, the types of labor that fall below the average labor productivity are gradually eliminated and new labor levers are opened, the same applies in “profit rates”. In other words, there will be competition in the market, just as there is competition in the case of labor, there will be competition in the case of exploitation. Naturally, if there is a social average of labor output, capital profit must also be a social average. If all kinds of economic activities take place on the counter of production, it is not possible for a unit of Labor to write a part of its product on its own account according to the pleasure of the bourgeoisie. Labor that produces 10 units of goods per day will reduce the price of goods by half when it begins to produce 20 units of the same goods per day. Because the average output of Labor will now be formed according to 20 units. Naturally, it is impossible for capital to exploit labor by making more production. Because the same average value will also apply in profit. Every labor that produces the same product produces 10 units of commodities, while labor that can produce 20 units of commodities may be the subject of exploitation, but even it will be very short-term, and the new production style that gives a higher output will spread quickly, and the new average output will be 20 units. Capital remaining below the average profit rate will also suffer. In order for profit to be realized, a unit of Labor must produce more products than the social average. If we claim that surplus value should only occur during production, we say that in a plane where the producer is hurting, that is, in a plane where the capital is shrinking, the labor of the working class receives a wage that is not entitled to, which is theoretically impossible. This exploitation, that is, the profit of capital, occurs not only at the production counter, as Marx thinks, but also at the moment when the revenues are spent.

The only thing that has been overlooked so far is not that 30 roll of fabric equals 90 litres of wine. As soon as the 30 roll of fabric, which is the subject of the change that creates negative labor time, begins to be replaced by 90 liters of wine, a new social Labor average will be formed, and part of the labor force will be discarded in this new plane. Because it would be enough for the Portuguese to allocate 67.5 days of Labor time to produce ninety liters of wine for the British, while it would be enough for the British to allocate 45 days of Labor time to produce 30 roll of fabric for the Portuguese.

 

ENGLAND

90 roll of fabric

135 daily labor time

45 daily wasted labor time

PORTUGAL

210 liter of wine

157,5 daily labor time

22.5 daily wasted labor time

TABLE3

When we look at it like this, we see that the total income of the two countries is equal to the income before the exchange, but only when Labor saves time, even if everyone gets as much share of their previous production, some labor process is wasted. When we calculate new revenue according to a distribution equal to Old revenue, we see how many days production is reduced.

ENGLAND

90 liter of wine

60 roll of fabric

135 daily labor time

PORTUGAL

120 liter of wine

30 roll of fabric

157,5 daily labor time

TABLE 4

 

Table 4 also shows that if both countries produce the same amount of product in the manufacturing branch they know best, we will see that Britain's 45-day Labor time is wasted, and Portugal's 22.5-day Labor time is wasted. Each exchange wastes some labor time. It is possible to see this not only between the two countries, but also in every exchange. This excess capital is more than it deserves as a profit. British capital creates a surplus value equivalent to 45 days of Labor time from this trade, while Portuguese capital creates a surplus value equivalent to 22.5 days of Labor time. However, at the beginning of the trade, the Portuguese capital could also swear that it was doing a very profitable business.

The value of a good is as much as the Labor time it contains, and the price is as much as the negative labor time it earns to its consumer. In the case of full employment, that is, if both countries continue production, the UK will produce 30 roll of fabric excess, while Portugal will produce 30 liters of wine extra. Britain has a surplus of 30 roll of fabric to sell, while Portugal has 30 litres of wine to sell. But every product is valuable because it saves its consumer time. for 30 roll of fabric, there is only a negative labor time process of 22.5 days that Portugal can sacrifice, and its total income in this process is only 30 liters of wine.

Even if it sounds logically unacceptable when we say that the production value of something is up to Labor time, we also claim that the value of 90 liters of wine and 60 balls of fabric produced in separate planes is up to 120 liters of wine and 30 roll of fabric. The negative labor time approach shows us how this equalization occurs.

For the Portuguese, it is possible to produce 120 liters of wine instead of 30 roll of fabric, which coincides with a 90-day Labor period. For the British, it is possible to produce 60 balls of fabric instead of 90 liters of wine, which coincides with 90 days of Labor. Naturally, replacing 120 liters of wine with 60 roll of fabric on both sides is an exchange that will reveal the greatest efficiency. But because the value of the commodity in the two producers will be as much as the negative labor time it gives them, when the exchange of 30 roll of fabric and 90 liters of wine occurs, there is a misconception that it makes a profit on both sides. with the exchange, both sides managed to maintain the same revenue by wasting a certain amount of Labor time.

According to new income, the Portuguese experienced a 12.5% increase in income, while the British experienced a 25% increase in income. This causes the distance between two types of labor that are exactly the same, and the perception that one type of Labor has a much higher efficiency than the other type of Labor. However, it was possible with a 90-day labor on an equal plane, in which 60 rolls of cloth for the British made 120 liters of wine for the Portuguese. But in such a plane, capital cannot profit, it would replace what is the product of equal labor with something else that is again the product of equal labor.

In general terms, trade leads to an increase in average labor productivity in both cases, whether it has produced until it has received the old income or continued production to provide full employment. In the past, the UK also produced 1 unit of Labor 0.5 liters of wine and 0.33 roll of fabric, while in the plane where 45 days of Labor is wasted, where the product remains the same, the per capita output will be equivalent to 0.62 liters of wine and 0.33 roll of fabric, in the new fully-employed equally shared plane; the UK will start producing 0.66 liters of wine and 0.5 roll of fabric with the same unit of Labor. Again, Portugal produces 0.66 liters of wine and 0.16 roll of fabric , while the product remains the same in the plane where 22.5 days of Labor is wasted, the product per person will again be 0.72 liters of wine and 0.19 balls of fabric, and they will produce 0.66 liters of wine and 0.5 balls of fabric in the new plane with equal employment. This will happen when we accept that every unit of Labor is equal.

However, now that we know that the value of a commodity in economies is as much as the negative-labor time it earns to its consumer, we know that the market will balance on a plane where 90 liters of wine will be 30 roll of fabric. But the capital profit will accumulate as a portion of the product surplus in the hands of both sides.

But thanks to the benefit they provide from this business section, the Portuguese have only a negative labor time of 22.5 days in the hands of the Portuguese to buy the 30 roll of fabric that they will produce if they continue production on both sides. and during that time, what they can produce is only 30 litres of wine. Naturally, the value of the fabric they receive from the British is as much as the product they can produce in a maximum of 22.5 days of negative labor. Although the Portuguese buy more than 30 rolls of fabric, it will only be worth as much as a product equivalent to 22.5 days of Labor.

As all goods are replaced with goods, Brits will have 30 rolls of fabric working time or 45 days of negative working time after buying 90 litres of wine. For the equivalent of 30 rolls of fabric equivalent to 45 days of negative labor, only 30 liters of wine will remain. The value of the last unit of 1 roll of fabric will be equivalent to 1 liter of wine. In the first trade, they will give back to the Portuguese the advantages of production over social labor in their last trade.

In our example, a daily labor input creates 1.25 days of negative labor time in the UK thanks to this trade, while in Portugal 1 day of labor creates 1.12 days of negative labor time. This means that Britain will become a richer country than Portugal thanks to this trade. Because wealth is the amount of negative labor we receive with a unit of labor input. If negative labor time is not created as a result of the exchange, the consumer will not want to consume this product. But when the wealth that corresponds to a unit of Labor has a social average, every consumption below it will still not lead to enrichment, even if naturally negative labor creates time. Moreover, as in the case of the UK, continuing production has a negative labor time reduction effect. And finally, if the UK continues to ask for 90 liters of wine for 30 balls of fabric in full employment, as in the first state of trade, without compromising its prices, each cycle will consist of a surplus of 20 roll of fabric and 30 liters of wine for 10 roll of fabric. When the fourth cycle is complete, the British capital will have accumulated as much goods as it will produce in a full cycle, and neither the UK nor Portugal will have a provision to buy this product So production will stop until the surplus at hand runs out.

Negative labor not only shows us how variable everything is, but also shows how Price and even capital profit are formed. In capitalist economies, both sides find the price by calculating the negative labor time they will earn from this trade in terms of their income. Even if this plane, where 30 roll of fabric make 90 liters of wine, looks like a plane that is profitable in both countries, it will be a long-term loss for both sides. And it is clear that in capitalist economies where there is such an exchange, the price finds itself in the 30 roll of fabric of 90 liters of wine. Because capital can only profit in this case. Every Labor has a social average.

The types of labor that remain below this average are erased with time or replaced by other types of Labor. Just as the average level of Labor constantly equates each other, the same situation will apply in consumption processes. The product received by a unit of labor creates the largest negative labor time. In other words, a unit of Labor takes over a larger mass of negative labor time than it does in each exchange.

Labor is a process that consistently yields different outputs. Just as each division of labor changes the output of Labor, the decipherment of a law of nature (such as the discovery of agriculture or electricity), the discovery of an instrument-machine-computer, or each newly established market constantly improves the output of Labor. The types of labor that capture this level of output continue to find buyers in the market, while Labor processes that do not capture this average are deleted from the market.

As the example shows, the scarcity or abundance of goods in both countries does not affect the price. In the first new plane, 1 roll of fabric can be as valuable as 3 liters of wine, while in the last plane, 30 rolls of fabric can only be as valuable as 30 liters of wine. The situation here is not a shortage of wine. The only thing that affects price is how much labor time a good is produced with and how much negative labor time it saves its consumer. Therefore, things produced by a unit of Labor have separate prices. Because Labor is the product of the same social labor in every plane. Even if their output is different, their social averages equalize to each other very recently.

In this aspect, The market provides a transition that almost equalizes each unit of Labor to each other. The amount of Labor contained in a good determines the value of that good. But the price is based on itself the negative mass of Labor time that it creates for the consumer of the good. Negative labor is a temporary state of time. It will disappear after the adaptation of Labor to the new plane. Therefore, if we do not take the price as the amount of labor in the commodity, there is a constant surplus of goods. This excess also causes income and social wealth to be collected in one hand and production to stop.

 

 


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