Now, if the second day, where he offers it for $5.50, he still finds that noone will purchase it, he will get more desperate to sell it. he may lower the price to cost, $5.00, but he discovers the third day that customers will only purchase the commodity at $3, especially as they are halfway to their expiry date. The fourth day, he sells the commodity at $2.50, to ensure that he sells his stock before he has to sell it at $0.10 . In this example, the exchange value is set by a series of factors, but the desicive one is the use value of the purchaser.
All valid. Sellers try to find a price, but demand and competition prevents them from picking an arbitrarily high price. Let me only note here, you reference cost again. What is a cost? Its a price for the seller in relation to the vendor (the vendor's supplier). The situation of a commodity being solved below its cost is not the general course of things in capitalism, for obvious reasons. This is exactly a situation where demand and supply are not in balance.
I thought a specific commodity and two specific countries would be specific enough. If it is due to difference in costs in the countries, then how does that square up with the concept of socially necessary labor time? Surely the bread should be as cheap as the cheapest in both countries?
What I meant by cost in this case was the cost of transportation and other things not related to the production of the bread itself. There are so many factors that can influence market prices at a current point of time as well.
The point is that if the labor cost is $20-$21 per apple, you most likely won't find a reliable market for it, and so it won't have an exchange value of $21.
Sorry you'll have to further explain what you mean, why won't a reliable market be found? Please state the whole argument in full again.
The evenly rotating economy, while a useful theoretical construct, has generally been discared by post-classical economics. How could the labor theory of value possibly hope to explain price formation in this case? How can you complain that my theory of "prices rely on prices", when your own theory of value relies on the evaluations already having existed for long enough for an equilibria to have been established?
Although it may appeared in my original post that 'my labor theory' was a theory of price, its not. Its a theory of long term prices in the neoclassical model of perfect equilibrium. Labor Theory of value does not rely on equilibrium prices - it admits they exist and attempts to explain why they are set where they are. Why do apples always cost far less than a TV. The LTV claims nderlying all long term exchange values in the model of equilibrium is labor input. In the end. the reverse argument makes more sense. We must explain fairly stable long term prices without reference to demand and supply - one explanation is labor input.
That is quite a different claim from labor value determining the exchange value of commodities. So far, that theory fails on the following grounds: 1. It cannot explain price formation, by your admission of it relying on an equilibria economy. (A theoretical construct that is not an observable phenomenon in the real world.) 2. Bankruptcy, as in the price of commodities sold of at below cost because they could not be sold at or above cost.
Perfect equilibrium is not observable, but we do see prices for particular commodities trending at certain values (adjust for inflation and all that). This is not a pure theoretical idea, and is observable. Bankruptcy as I explained is a state of non-equilibrium, its where a particular sector of the economy has expanded too much at must contract.
That vendors hope to recoup their costs does not indicate that it is labor value that determines exchange value. In fact, that they have to sell at below cost to recoup some of their costs indicates that labor value does not determine exchange value.
As above.
They are formed the same way that the exchange value or prices of the commodities they sell are formed. Could you give something more specific here of what you're referring to?
Whereever you follow your logic, like in the case of the vendor example you gave above - you always reference costs. So again, you are left with a problem of where do you get the original costs. Perhaps we need to shift our focus from a reseller (supermarket) and your vendor example. To a business which directly produced its products and sells them. So you pick such a business and explain how the costs to that business are formed. In effect, I believe you need to explain labor wages using your STV.