Supply and Demand- script for a video that may never be made

[I have been considering revising some of my proposed plans for the Law of Value series. Below is a script I wrote a while ago for Law of Value 11: Supply and Demand. I am considering skipping this video and moving directly to the video on price. The reason: this script is mostly a take-down of neoclassical supply and demand curves and doesn't say that much about the law of value. But I feel that there are still some good points in this script, worth sharing with readers.]

People sometimes think the labor theory of value is an alternative theory of price to the notion of supply and demand. This is not so. All of the classical economists who subscribed to a labor theory of value discussed supply and demand. Yet they did not think that supply and demand, by themselves, were enough to account for value and price. Most of us today have a vague notion of supply and demand (from some high school economics course we slept through) that relates to the neoclassical picture of supply and demand curves intersecting to select an equilibrium price. It certainly is a nice, simple image that elegantly conveys its ideas of balance, rationality and equilibrium, but when we look at a little closer we will see that this image doesn’t actually represent reality or help explain much of anything about reality. This video will both explain the relation of supply and demand to the Law of Value and deconstruct the neoclassical notion of supply and demand curves and equilibrium price.

What is the relation of the law of value to supply and demand?

It’s actually quite simple: There is a finite amount of labor in society. Yet the possibilities that we could apply this labor to are endless. Do we spend our labor curing cancer or building bombs? Writing string quartets or digging for oil? Social demand, the total demand of society, decides how much of each commodity is needed. The productivity of labor in each industry limits the total amount of supply we have to meet these demands. But there isn’t a committee that makes this decision. This decision is made through the price mechanism. Prices of commodities reflect a definite amount of labor that went into their creation. Commodities acquire their value in production prior to exchange. The more labor that goes into something the more value it has. When the supply of a toothbrushes exceeds demand for toothbrushes this means that too much labor has gone into making toothbrushes. Toothbrush prices are depressed below their value and this triggers a change in toothbrush production: labor must be withdrawn from toothbrush factories and applied elsewhere. If demand for toothbrushes is higher than the supply this will raise toothbrush prices above their values. This triggers an inflow of labor. Behind this fluctuation of supply and demand lies the actual value of a commodity. That value is the amount of labor time that went into making the commodity.

Even though the fluctuation of price moves above or below the value this doesn’t mean that value is erased. What happens is that the maker of toothbrushes receives more or less value in exchange then they produce. There is a value transfer in exchange. If there is an excess demand for toothbrushes this causes the social value of toothbrushes to rise above their individual value. The labor that went into making toothbrushes counts as more social labor than it actually represents. This causes a reapportioning of labor in society.

This fluctuation is essential to the law of value. Value only exists through the blind fluctuations of the market.

The traditional demand and supply curves have problems. Let’s examine them.

Neoclassical demand curves make the market seem rational, just, and equal. Consumers appear to be choosing to buy at a price that maximizes their personal utilities and producers selling at a price that maximizes their profits. This equilibrium price appears as a state of balance and harmony. All deviations away from equilibrium are just temporary, unimportant fluctuations. Attempts to interfere with this equilibrium, to disturb the status quo, will always make society worse off. This is the ideological backdrop to the neoclassical picture of supply, demand and price. (Simon Clarke argues that the development of marginal utility theory happened at a time of growing social movements that called on states to regulate labor conditions, markets, etc. Economists were looking for ways of measuring the effect of government actions on market processes. Hence the evolution of a theory of self-equilibrating markets. See Clarke “Marx, Marginalism and Sociology”)

The thing is, equilibrium prices are the most rational form of allocation for capitalists seeking to maximize profits. But they are not so for workers. We notice that workers and labor are left entirely out of the curves. For the neoclassicist these curves just represent utility, subjective desire. There is no role for the productive process or class. As we’ll see later, this lack of a theory of production makes the neoclassical concept of price circular and meaningless.

Equilibrium prices also don’t exist. The economy is never in equilibrium and never will be. It is constantly moving, changing, growing and contracting. Disequilibrium, often violent, is the norm. The regularity of economic crisis should be enough to prove that disequilibrium isn’t a freak accident of external interference in the market, but something internal to the the market itself.  (Booms are also an instance of disequilibrium. The economy doesn’t stay still in a boom. It expands.)
The Demand Curve- a joke


This is a neoclassical demand curve. It tells us that as prices rise people will buy less and less of something. As prices fall they will buy more. That seems logical enough. The curve is derived from a table of preference rankings based on the idea of marginal utility: The more you buy of something the less value you put on the next unit. So if you’ve already bought 10 bananas the 11th one has less value to you. The 12th even less, and the 13th even less than that.  Let’s say I’m willing to buy 10 bananas but not 11. The value I put on the 10th banana, the banana at the margin of my preference scale, is the price I will pay for bananas. This is what the demand curve shows, that the more bananas I buy the less value they have to me. This too seems to make sense at first… if we set aside the fact that people don’t ever buy bananas one at a time.

But what about capitalists? Workers are not the only people that buy things. Capitalists’ demand is a huge part of the economy. During the boom phase of an economy capitalists’ demand increases the more they buy. The more inputs they buy, the more profit they make, the more production expands, the more their demand for inputs grows. They do the opposite of what is predicted by marginal utility.

Let’s say the equilibrium price for a banana is 10 cents. What does 10 cents mean? Neoclassical economics has no answer to this question. It just says that 10 cents is the equilibrium price in which everyone’s utility is maximized. The price of health care is so high that millions of Americans can’t afford it. For neoclassical economics this is an equilibrium price. They say those of us without health care have maximized our utility because we value the money we didn’t spend over the value of health care. But most of us don’t have that money in the first place. Clearly this is a meaningless concept of equilibrium and price. When prices rise rich people continue to buy the same amount of stuff. Some even buy more because of the status associated with expensive things (fur coats, fancy cars). When prices rise poor people buy less.

So we see that the diminishing demand for bananas isn’t just a function of having a diminishing utility for bananas. It’s a function of how much money we have to spend. And this is a function of income- a concept that relates directly to production. The income of workers corresponds to a definite amount of work at a definite wage. The income of capitalists corresponds to a definite amount of value appropriated from the working class. And both of these relate back to labor. Without a theory of labor and the value it creates in a capitalist economy the idea of demand is meaningless.

Without this reference to labor the neoclassical theory of price becomes circular. Again, what does it mean to say that bananas are 10 cents? It means nothing at all unless we realize that the price of bananas reflects the relation of bananas to all other commodities. If bananas are 10 cents, apples are 12 cents, and oranges are 25 cents, then we can see the meaning of price. Price reflects quantitative relations between commodities. If the price of bananas rises to 10 dollars a banana people will buy apples and oranges instead. This will change the price of apples and oranges. But if the price of all fruit is rising this will effect the demand for bananas differently. We can only understand price and value in this relational way, as a relation of the value of one thing to another. Yet the demand curve can only be drawn by holding the prices of all other commodities as constant. If we are drawing a demand curve for bananas we must assume that prices are held constant for other replacement goods like apples and oranges. But this means that we must take for granted that which we are trying to explain. We must assume price in order to explain it. There is no way to escape from this circularity without referring to something outside of price. This something is labor.

….. when picking on neoclassical economics it can be hard to find a stopping point. But there’s one more thing about the demand curve that has to be mentioned.

Neoclassical economics draws the demand and supply curves as mirror images of one another in this way conflating the motives of consumers and capitalists.  This allows economists to claim that just as capitalists seek to sell at a price which maximizes their profits consumers buy at a price that maximizes their utility, giving them a “consumer surplus”. Yet unlike capitalist profit, which is a real objective magnitude measured in money, this consumer surplus can’t be found anywhere in the real world. It exists only in the minds of economists. A surplus of money is a clearly objective phenomenon. Psychological satisfaction is not an objective thing. It can’t be measured in any numerical amounts, and there clearly can be no such thing as a surplus of subjective satisfaction over an objective amount of money spent. That’s like having a surplus of love over bananas. Such logical mistakes abound in marginal utility, reducing its theories to circularity and meaninglessness.

Supply

Since the supply of a commodity is determined by the amount of labor that goes into making it and the productivity of that labor we’d think that labor would be at the center of the neoclassical conception of supply. Yet, somehow it is able to completely remove this from the analysis.
supply-curve
Here’s a neoclassical supply curve. It’s the opposite of the demand curve. It predicts that as prices per unit rise capitalists will produce more of a commodity thus making more profit. Yet as production increases the cost of production can also increase. Therefore at a certain point the returns on additional production start to shrink.

This all seems to make sense. But because the supply curve focuses on individual unit prices and not total price it misses out on something very important. The most important strategy for capitalists to increase profits is to increase the efficiency of production. This allows them to sell more commodities at a lower price, increasing profits by out-competing rivals. If we were to draw a curve based on this fact, supply would actually rise with shrinking prices, just like the demand curve! But of course neoclassical economics wants to abstract away from the way that changes in labor productivity alter the value of commodities.

Because of its obsession with equilibrium the supply curve also assumes equal productivity throughout an industry. But as we’ve seen capitalists are constantly competing to lower the socially necessary labor time. This means that they are constantly investing in new equipment to increase efficiency. Investments in long-term fixed capital like factories create all sorts of inequality between different firms in terms of the level of productivity. So rather than one level of productivity throughout an industry we have several.

We could think of this as a series of smaller supply curves. At the left of each curve is a price below which a firm can’t make a profit at all and will go of business. To the right is a supply which is beyond the firms capacity to produce, at which additional production will be too costly. Demand determines which one of these firms will set the market price. If demand equals supply then the average productivity, the socially necessary labor time will be the price. But if demand is above supply then the least efficient firm will set the price and the other firms will receive a super-profit. If demand is below supply then only the most efficient firm can make a profit. The others will be forced out of business.

Rather then demand creating price, demand is selecting from amongst pre-existing prices based on the productivity of labor. This is the actual way in which demand and supply interact.

Equilibrium: If it ever happened it would be meaningless

Neoclassical economics assumes that the intersection of demand and supply creates an equilibrium price. This equilibrium is so powerful that any deviation from it is unimportant. Yet, in reality, demand and supply never meet. There is always a constant shifting between the two. For the neoclassicist these fluctuations are fluctuations around a center of gravity called equilibrium. Equilibrium is the average and this is why the fluctuations are unimportant.  But what is ignored is that this “center of gravity” is constantly moving. As demand and supply fluctuate they change where the center is and this is why they never settle on equilibrium. Rather than tending toward equilibrium, the economy is in a constant state of disequilibrium as the interaction of supply and demand constantly change the productivity of labor.

If supply and demand ever did meet they would cancel each other out and be meaningless. If the economy was in a perfect state of equilibrium with supply and demand for all commodities in perfect balance this would tell us nothing about why some commodities are worth more than others. Fluctuations in supply and demand can tell us why the same commodity has a different price at different times, but supply and demand can not explain the relation of one equilibrium price to another.

What creates supply and demand?

By now that should be obvious. Supply is created by labor. Now, labor is not the only “factor of production”, yet it is the only one that we have control over as a society, and thus the one that can be the basis of social value. (This is why animals don’t create value. They may do work and create products but they don’t produce value because value is a social relation between people, not a measure of physical products. Animals don’t enter the market looking to buy commodities. Nor do robots- yet.) The sun, water and land are crucial for agricultural production. Yet these factors are pre-existing gifts of nature. If we are to try to exert control over them so that we can ration them differently through irrigation, improvements in fertility, or greenhouses, these improvements will require labor.

Demand is also created by labor. Demand is a certain amount of value in the market in the form of wages and profits looking to buy things. And those things we buy are also conditioned by the structure of production. Capitalists’ demand is given by what sort of inputs are needed for production. Workers’ demand are based on the level of productivity in society: what sort of commodities are available and at what cost. We can do better than the neoclassical idea of demand as some sort of magically independent force that shapes the direction of society. Demand itself is shaped by the structure of society.

Conclusion

If we were to take all of these problems with the neoclassical conception of demand and supply we could boil them all down to one thing: they try to explain demand and supply with utility instead of value. By relying on the subjective dimension neoclassical economics deprives itself of the ability to describe actually existing social relations and mires itself in endless circularity, always needing to assume prices in order to explain them. Because production is left out of the picture the motives of capitalists and workers are conflated, subsumed under the vague heading of ‘consumer choice’. Temporal motion and change are excluded from the picture giving capitalist social relations a timeless, universal character.

But neoclassical economics must do this in order to avoid discussing the organization of production in a capitalist society. It must paint the existing order of things as the natural result of people’s free choices and desires rather than of an unequal social order based on private ownership of the means of production and the exploitation of wage labor. In short, it must abandon the concept of value. This is what classifies it as ideology and renders it meaningless.

When we add labor back into the picture we get a very different picture of things. We see that behind both demand and supply there exists a labor process and that this labor process is a dynamic one, constantly in disequilibrium. We can still use the idea of demand and supply curves but they come out looking very different than the neoclassical curves.

Suggested Reading:

Anti-Samuelson by Marc Linder - a thorough critique, in two volumes, of Paul Samuelson’s classic neoclassical econ textbook.

‘Demand, Supply and Market Prices’ by Paulo Giussani from the book “Marx and Non-Equilibrium Economics”

‘Non-Equilibrium Market Prices’ by Guglielmo Carchedi, also from “Marx and Non-Equilibrium Economics”

(Marx and Non-Equilibrium Economics is one of those prohibitively expensive academic books, the fault of the publisher’s not the writers. Let me know if you are interested in the above essays and I can look into making them available…)

Simon Clarke “Marx, Marginalism and Sociology”)

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35 Responses to Supply and Demand- script for a video that may never be made

  1. Very good. Perhaps you can add the interesting bits you mentioned in your price video? I like it very much.

  2. redpraxis says:

    Great! Thank you Comrade.

  3. Will says:

    This post makes what I think is an underappreciated point, that classical political economy incorporates supply-and-demand analysis, but simply treats it as peripheral and not central.

    However, there is a flaw in your treatment of the neoclassical story. You do not distinguish between movements along the supply and demand curves, and shifts of those curves. An increase in the amount of money that workers or capitalists have to spend would be treated as a rightward shift in the demand curve by a neoclassical economist, for example. You imply that neoclassical economists treat the curves as fixed and timeless, which is not correct.

    I’ll also note that in practice, good neoclassical economists virtually never appeal to the supply and demand chart from Econ 101. Instead, you will find them relying on charts with Marginal Cost and Marginal Revenue curves, which have their own issues, but which avoid the circularity of the utility story.

    • Will,
      Thanks for the comment. I get the point about distinguishing between moving along the curves and a shift in the curves. But where do I imply that the curves are fixed and timeless? My point about income was that the curves don’t explain much… that the determinates of demand are profit and wages and that these are what need to be explained.

      Brendan

      • Andrew says:

        Brendan,

        Does this mean that it is incorrect to say that demand creates (or at least influences) profit and wages? Maybe I’m thinking of this too simplistically, but if we go back in the process far enough…

        demand influences the allocation of labor which influences the investment of capital by the capitalist on labor power and inputs which influences productivity which increases socially necessary labor time

        Or is that all just a mish mash of nonsense? Does demand influence in any way the creation of new value?

      • The demand for various commodities influences how labor is allocated between different productive activities. Influencing the allocation of labor is not the same as creating value or profit or wages.

      • Andrew says:

        Thank-you.

        As an aside, have you written a book?

  4. ultraviolet says:

    I really think you should make this video! Until I read your script, this was The Thing which kept me from believing that Marx’s analysis was accurate… because it’s pretty obvious that supply/demand impacts price, so not realizing that Marx acknowledged this (and hearing many followers of Marx insist that it didn’t impact price) made me lose respect for Marxist analysis in general. So this script has been the most educational for me. I hope you make it into a video, as I think it’s one of the most, if not the most, common misconceptions and most marring misconceptions about Marxism.

    By the way, have you changed this script from the old one you had up? I read the old one just a few days before you posted this new one… but if you’ve updated it and made it even better, I’d like to know so I can re-read it.

    • Ulatraviolet,

      thanks for the input. To answer your question: this draft is significantly different than the draft I posted a few years ago. I’m thinking that I will collapse the discussion of the relation of supply and demand into the video on ‘value and price’ since I’ll have to repeat much of that info anyway. The rest of this script is just a take-down of neoclassical concepts of supply and demand curves… interesting but not necessarily directly relevant to discussing the Law of Value. I will probably put these critiques in the footnotes of the ‘value-price’ video.

      BC

      • Sertii says:

        I don’t know if my opinion matters that much, but it would definitely be helpful if you could at some point make a separate video out of this, or at least put the document up on your home page. For me this document along with the Value & Price FAQ were extremely important for understanding the Law of Value, and i suspect the same holds for others

  5. Daniel says:

    Hi, in general a very good script, as is also a very good blog. Only just two comments on two phrases that i’m not competely agree.

    “If we are drawing a demand curve for bananas we must assume that prices are held constant for other replacement goods like apples and oranges. But this means that we must take for granted that which we are trying to explain. We must assume price in order to explain it.”
    I think this it’s not really accurate because the notion of utility allows to compare between two goods, and only after having this relationships, (that ones may want to call exchanged-value) a theory of price arise.

    “A surplus of money is a clearly objective phenomenon. Psychological satisfaction is not an objective thing.”
    Yes, having a a surplus of money is an objective phenomeno, but it’s not an objective thing, it’s just a social relationship. I don’t think that an ontological critique of the notion of utility (versus for expample the ontological status of value) it’s the way to go. Neither utility nor value can be measure in the “real world”. I know that this last statement should be fully argued, but my porr english doesn’t allow me to do it.

    • Daniel,

      Thanks for the comments.

      In regards to the question of utility, the aspect of utility theory I am referring to here is the ceteris paribus condition that must be held to judge our utility for an object. In order to measure our marginal utility for bananas we must hold the price of apples constant and vice versa. We can’t actually conceptualize utility without this ceteris paribus condition. I think this points to an inherent circularity in the theory.

      In regards to the second point.. I don’t know if I actually understand your point. I think sometimes people use the word “objective” to mean different things so I’d like to agree that you can’t measure value in the same way you measure Mass or Volume. But social relations take on an objective form in a capitalist society and value is very clearly measured in quantities of money. This happens every day and doesn’t require any ontology in order to occur. The same cannot be said of utility. Utility has no objective measure. The claims made by bourgeois theory as to the correspondence between amounts of utility and amounts of value can only be taken on faith. In contrast quantities of labor time and quantities of commodities are objectively measurable and are measured every day in a capitalist society.

  6. Hedlund says:

    For another statement of price circularities in neoclassical theory, look no further than the Cambridge Capital Controversy. From Wikipedia:

    “Piero Sraffa and Joan Robinson before him, whose work set off the Cambridge controversy, pointed out that there was an inherent measurement problem in applying this model of income distribution to capital. Capitalist income (total profit or property income) is defined as the rate of profit multiplied by the amount of capital, but the measurement of the “amount of capital” involves adding up quite incomparable physical objects – adding the number of trucks to the number of lasers, for example. That is, just as one cannot add heterogeneous “apples and oranges,” we cannot simply add up simple units of “capital.” …

    “Neoclassical economists assumed that there was no real problem here. They said: just add up the money value of all these different capital items to get an aggregate amount of capital (while correcting for inflation’s effects). But Sraffa pointed out that this financial measure of the amount of capital is determined partly by the rate of profit. This is a problem because neoclassical theory tells us that this rate of profit is itself supposed to be determined by the amount of capital being used. There is circularity in the argument. A falling profit rate has a direct effect on the amount of capital; it does not simply cause greater employment of it.”

    Summarized: Calculating equilibrium prices requires the rate of profit, which requires a measurement of capital in terms of equilibrium prices.

    This and other issues raised during the CCC (such as reswitching and reverse capital deepening) represented a whole slew of nails in the coffin of neoclassical theory.

    For an excellent overview of the above issues, I recommend this introductory post by Matias Vernengo.

  7. Bruce Wallace says:

    Just to say that N. Bukharin does just such a critique in his ‘Economic Theory of the Leisure Class’. This was published in 1927 but the research for it was done in 1914. It’s a demolition of marginal utility theory and is available free
    on-line.

  8. Bruce Wallace says:

    No you’re not mistaken. I’ll have a lok at your write up on it.

    Cheers

  9. Julia says:

    Brendan, this is very good, and I would highly recommend using this script for a video. The amount of confusion regarding the LTV is disturbing.

    Also, I recall you writing in a comment on one of your videos that you’re familiar with Kevin Carson’s works. In his “Studies in Mutualist Political Economy” he starts off with the LTV and debunks the austrian school “debunkers” quite well. Have you read that text in particular?

  10. exval says:

    You may also find Steve Keen’s “Debunking Economics” useful in regards to neoclassicalism. His analysis of Marxism is deeply flawed but has been largely countered by the arguments made in Kliman’s “Reclaiming Marx”.

    • Nathan Tankus says:

      I have “reclaiming Marx” so I’m interested in what pages you think overturn Keen’s analysis

      • exval says:

        Sorry I don’t have specific page numbers, but the refutations are essentially theoretical. Kliman makes a convincing argument that Marx’s theory of value is dynamic, temporal and non-equilibrium. It is also internally consistent. Keen argues that the LTV should be dropped entirely from Marx’s analysis because it is allegedly inconsistent and there are flaws in Marx’s calculation of prices into values (ie, the Transformation Problem). Kliman shows that this reading, based on a Sraffian interpretation of Marx and on the mathematical ‘proof’ by Okishio, is faulty because it fails to take into account that value can change during the production cycle (dynamism)- specifically the values of inputs and outputs. Therefore, the so-called “Transformation Problem” disappears. Really the whole book is worth reading, so is his “The Failure of Capitalist Production” which looks at the US rate of profit.

  11. comradehill says:

    Good post.

    Just wondering, where do you stand on Maximum wage caps? The Marginalist school says that since the wage is set “below the market level” it creates labor shortages. What is the marxian analysis of this?

  12. Davor Mujezinovic says:

    Making those essays avaliable would be cool.

  13. DeadweightLoss says:

    There are so many conceptual confusions here that the essay is almost impossible to read, let alone refute.

    Throughout this essay, scarcity is confused with exchange value, which is confused with productivity, which is confused with currency fluctuation, which is confused with price signals and monetary factors, which is conflated with discussion of motives and intellectual evolution. It is difficult to respond to such an incoherent mish-mash.

    Here is just one example.

    “Let’s say the equilibrium price for a banana is 10 cents. What does 10 cents mean? Neoclassical economics has no answer to this question. It just says that 10 cents is the equilibrium price in which everyone’s utility is maximized. The price of health care is so high that millions of Americans can’t afford it. For neoclassical economics this is an equilibrium price. They say those of us without health care have maximized our utility because we value the money we didn’t spend over the value of health care. But most of us don’t have that money in the first place. Clearly this is a meaningless concept of equilibrium and price. When prices rise rich people continue to buy the same amount of stuff. Some even buy more because of the status associated with expensive things (fur coats, fancy cars). When prices rise poor people buy less.”

    The fact that millions of Americans can’t afford health care is a matter of scarcity in the market under a given set of conditions. It has nothing to do with what 10 cents means, anymore than the fact that millions of Americans can’t afford Riviera Home-fronts has anything to do with it, nor for that matter, the fact that millions of Americans have ready access to bananas, which was hardly the case in Communist countries.

    They say those of us without health care have maximized our utility because we value the money we didn’t spend over the value of health care. But most of us don’t have that money in the first place. Clearly this is a meaningless concept of equilibrium and price.

    This is a massive non-sequiteur. The fact that I can’t afford X means that price is meaningless???

    Millions of Americans can’t afford health care for an enormous multitude of reasons. The AMA artificially keeps the supply of medical school graduates low. Insurance subsidizes the industry so that health-care providers have less incentive to minimize costs. Patents keep the price of pharmacuticals artificially high, etc etc etc.

    All the science of economics does is describe the operations of the market. It has nothing to do with justice or injustice. Neoclassicals did have a vested interest in making supply and demand seem to produce justice in their results. They were wrong in doing so, but this does not mean that supply and demand are meaningless.

    People can influence the markets through various forms of political and individual action to create better results. But saying that poverty gives the lie to economics is like saying that people falling off a cliff gives the lie to gravity.

  14. MrEverpresent says:

    “The fact that millions of Americans can’t afford health care is a matter of scarcity in the market under a given set of conditions. It has nothing to do with what 10 cents means, anymore than the fact that millions of Americans can’t afford Riviera Home-fronts has anything to do with it, nor for that matter, the fact that millions of Americans have ready access to bananas, which was hardly the case in Communist countries.”

    Scarcity? No, the problem is liberalization of a market that doesnt need to be “liberated”. We in Europe don’t have a problem of health care service “scarcity”. it seems that you’re saying that we need more free market in health care industry. But this was actually the cause of the problem… The context of the problem so to speak.
    In Europe almost every health care service is free and high quality.

    • DeadweightLoss says:

      Sir, I said scarcity in the market under a given set of conditions. I was not pretending to know what conditions in the market would produce optimal results in terms of human welfare. I was stating the fact that under current conditions, healthcare is too scarce for much of the public to afford.

  15. zkscelso says:

    Would love copies of the above mentioned articles. Thank you.

  16. Liam says:

    There have been some interesting critiques of this post on the Debate a Communist reddit, unfortunately it also seems the Marxists on there don’t have any replies.

    I don’t expect you to sign-up to Reddit or anything, but it strikes me that these critiques and explanations of economics are worth taking into account for future videos.

    • Liam,

      Thanks for posting the link. I actually already saw that thread. I thought that the critiques posted there demonstrated the total arrogance of neoclassical tradition and the inability of that school of thought to even entertain the notion that there are serious flaws in its core ideas. I didn’t find any of the responses surprising, new or novel, or damaging to any of my arguments. They seem to completely misunderstand the critiques I was making. But since I have been thinking of making this Supply and Demand video afterall I think the arguments there might be useful in helping me focus my argument in a way that anticipates such misunderstandings. If you think there are particular arguments there, or elsewhere, that I should address feel free to bring them up.

      Brendan

      • Liam says:

        But since I have been thinking of making this Supply and Demand video afterall I think the arguments there might be useful in helping me focus my argument in a way that anticipates such misunderstandings.

        It’s worth reading these arguments for this reason alone, in my opinion.

        As for particular arguments I think you should address: I found the time argument interesting:

        “Profit is made some time after the initial purchase of inputs. Once you’re comparing demand at time T_1 to demand at time T_2, all bets are off”

        Also, I’ve heard: “The Equilibrium price is simply a point” before a couple of times, so you might want to address why we should think the equilibrium point is a commodity’s value.

  17. xx says:

    http://www.mediafire.com/?v222h9b7aqyzkoq

    Marx and Non-Equilibrium Economics
    scanned by yours truly
    you’re welcome <3

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